UPDATE 1-NuStar mulls storage, pipeline growth, acquisitions-CEO

Fri Feb 1, 2013 4:50pm EST

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By Kristen Hays

HOUSTON Feb 1 (Reuters) - NuStar Energy LP will keep exploring acquisitions for its storage and pipeline businesses in 2013, Chief Executive Curt Anastasio told analysts on Friday.

"As we move into 2013, we're looking forward to continuing to pursue promising internal growth opportunities and exploring acquisitions for our fee-based storage and pipeline segments," he said on the company's fourth-quarter earnings conference call.

NuStar in 2012 focused on shedding margin-based businesses, like its $115 million sale of a 14,021 barrels-per-day (bpd) Texas refinery, to focus on fee-based operations centered on the Eagle Ford shale play in the state.

That focus includes projects that have given the company capacity to move about 300,000 barrels per day of Eagle Ford crude and condensate to the Corpus Christi, Texas, market. Once there, refiners can process it or ship it via barge or tanker to other refineries, Anastasio said.

NuStar currently is moving about 150,000 bpd to that market. That flow will increase to 200,000 bpd by mid-2013 and fill up in a year, executives said.

However, the company is "getting a little cool" on a proposal to reverse a pipeline to move crude from the Niobrara shale play in Colorado to the Texas Panhandle, said Danny Oliver, senior vice president of marketing and business development.

"The production just really hasn't caught up to what we would need to justify reversing that pipe," Oliver said.

The company first announced an open season on the proposal in mid-October and twice extended it, most recently to Feb. 15.

Oliver said there is shipper interest on a second part of that plan to reverse a pipeline to move crude from the Texas Panhandle east to Wichita Falls, where it could move to the U.S. crude futures hub in Cushing, Oklahoma, or the refinery-rich U.S. Gulf Coast.

Anastasio said the Colorado to Texas leg "will come into our system later, most likely."

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