PRESS DIGEST- Financial Times - May 26
May 26 The following are the top stories in the Financial Times. Reuters has not verified these stories and does not vouch for their accuracy.
(Corrects deficiency to proficiency in fifth paragraph)
* NuStar signs deals with Valero, EOG
* Agreements include both terminalling and pipeline
By Janet McGurty
NEW YORK, July 29 NuStar Energy LP (NS.N) signed deals with Valero Energy Corp (VLO.N) and EOG Resources (EOG.N) regarding the Eagle Ford shale oil play in south Texas, NuStar Chief Executive Curt Anastasio said on Friday during an earnings conference call with analysts.
Anastasio said the deal with EOG subsidiaries included the construction of a 70,000 barrel-per-day loading facility at NuStar's St. James, Louisiana, terminal and the construction of 360,000 barrels per day in extra tank storage.
"The project will give our customer access to production from the docking Eagle Ford and other developing shale plays the opportunity to blend additional crudes in order to supply the LLS market," said Anastasio, referring to the popular benchmark crude, Light Louisiana Sweet, which is delivered into St. James.
Anastasio expects the project to come into operation during the second quarter of 2012.
In addition, NuStar and Valero Energy have inked two throughput and proficiency agreements related to Eagle Ford which includes several of NuStar's existing pipeline assets and the construction of a new pipeline.
"We expect a portion of that project should come online as early as the fourth quarter of this year," said Anastasio.
Anastasio said details of both deals would be released jointly with the respective companies most likely next week.
NuStar was spun off from Valero several years ago and retains some of the infrastructure that feeds Valero's network of refineries.
Production of crude oil from the vast Eagle Ford prospect has jumped to about 160,000 barrels per day today from 71,000 bpd just two months ago, according to consultants Bentek. [ID:nN1E76Q250]
Pipeline construction has lagged the quick ramp up of the light crude oil production. Valero has said it currently runs about 40,000 barrels per day of Eagle Ford at its Three Rivers, Texas refinery and plans to increase it to 60,000 by the end of the year.
Valero has also said it will run some Eagle Ford at its Corpus Christi, Texas, refinery.
In conjunction with privately held Koch Pipelines, NuStar has already upped pipeline capacity from the Eagle Ford play by 30,000 barrels per day by reactivating a pipeline that carries the oil to terminals in Corpus Christi.
Master-limited partnership NuStar reported record earnings of $86.4 million or $1.34 a unit in the second quarter of 2011, excluding special items. Last year, excluding special items, the company earned $70.7 million or $1.13 per unit.
(Reporting by Janet McGurty; Editing by Dale Hudson and Lisa Shumaker)
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