Profile: NuStar Energy LP (NS)

NS on New York Consolidated

62.78USD
31 Jul 2014
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NuStar Energy L.P. (NuStar Energy) is engaged in the terminalling and storage of petroleum products, the transportation of petroleum products and anhydrous ammonia, and petroleum refining and marketing. NuStar Energy operates in three business segments: storage, transportation, and asphalt and fuels marketing. As of December 31, 2011, the Company’s assets included 66 terminal and storage facilities providing 84.6 million barrels of storage capacity; 5,480 miles of refined product pipelines with 21 associated terminals providing storage capacity of 4.5 million barrels and two tank farms providing storage capacity of 1.2 million barrels; 2,000 miles of anhydrous ammonia pipelines; 940 miles of crude oil pipelines with 1.9 million barrels of associated storage capacity; two asphalt refineries with a combined throughput capacity of 104,000 barrels per day and two associated terminal facilities with a combined storage capacity of 5.0 million barrels, and a fuels refinery with a throughput capacity of 14,500 barrels per day and 0.4 million barrels. In February 2014, the Company announced that it has completed the transaction with an affiliate of Lindsay Goldberg LLC, a private investment firm, to divest all of its 50% voting interest in an asphalt joint venture that owns a refinery located in Paulsboro, New Jersey.

NuStar Energy conducts its operations through wholly owned subsidiaries, NuStar Logistics, L.P. (NuStar Logistics) and NuStar Pipeline Operating Partnership L.P. (NuPOP). The Company’s revenues include tariffs for transporting crude oil, refined products and anhydrous ammonia through its pipelines; fees for the use of its terminal and storage facilities and related ancillary services, and sales of asphalt and other refined petroleum products. Its operations are managed by NuStar GP, LLC. NuStar GP, LLC is a subsidiary of NuStar GP Holdings, LLC (NuStar GP Holdings).

Storage

NuStar Energy’s storage segment includes terminal and storage facilities that provide storage, handling and other services for petroleum products, specialty chemicals, crude oil and other liquids and storage tanks used to store and deliver crude oil. As of December 31, 2011, the Company owned and operated 54 terminal and storage facilities in the United States, with total storage capacity of 53.4 million barrels; a terminal on the island of St. Eustatius with tank capacity of 13.0 million barrels and a transshipment facility; a terminal located in Point Tupper with tank capacity of 7.4 million barrels and a transshipment facility; Six terminals located in the United Kingdom and one terminal located in Amsterdam, the Netherlands, with total storage capacity of approximately 5.6 million barrels; two terminals in Mersin, Turkey with total storage capacity of 1.3 million barrels, and a terminal located in Nuevo Laredo, Mexico.

The Company owns and operates a 13.0 million barrel petroleum storage and terminalling facility located on the island of St. Eustatius in the Caribbean, which is located at a point of minimal deviation from shipping routes. This facility is capable of handling a range of petroleum products, including crude oil and refined products. A two-berth jetty, a two-berth monopile with platform and buoy systems, a floating hose station and an offshore single point mooring buoy with loading and unloading capabilities serve the terminal’s customers’ vessels. The fuel oil and petroleum product facilities have in-tank and in-line blending capabilities, while the crude tanks have tank-to-tank blending capability and in-tank mixers. In addition to the storage and blending services at St. Eustatius, this facility has utilized certain storage capacity for both feedstock and refined products to support our atmospheric distillation unit. This unit is capable of processing up to 25,000 barrels per day of feedstock, ranging from condensates to heavy crude oil. It owns and operates all of the berthing facilities at the St. Eustatius terminal. Separate fees apply for the use of the berthing facilities, as well as associated services, including pilotage, tug assistance, line handling, launch service, emergency response services and other ship services.

The Company’s St. James terminal has a total storage capacity of 8.2 million barrels. In addition, the facility has a rail-loading facility and three docks with barge and ship access. The facility is located on almost 900 acres of land, some of which is undeveloped. The Company owns and operates a 7.4 million barrel terminalling and storage facility located at Point Tupper on the Strait of Canso, near Port Hawkesbury, Nova Scotia, which is located approximately 700 miles from New York City and 850 miles from Philadelphia. This facility is a marine terminal on the North American Atlantic coast, with access to the East Coast, Canada and the Midwestern United States through the St. Lawrence Seaway and the Great Lakes system. The Point Tupper facility can accommodate large crude carriers and ultra large crude carriers for loading and discharging crude oil, petroleum products and petrochemicals. Crude oil and petroleum product movements at the terminal are fully automated. Separate fees apply for the use of the jetty facility, as well as associated services, including pilotage, tug assistance, line handling, launch service, spill response services and other ship services.

The Company’s terminal and storage facility in Piney Point is located on approximately 400 acres on the Potomac River. The Piney Point terminal has 5.4 million barrels of storage capacity and is the closest deep-water facility to Washington, D.C. As of December 31, 2011, the terminal stores petroleum products consisting primarily of fuel oils and asphalt. The terminal has a dock with a 36-foot draft for tankers and four berths for barges. It also has truck-loading facilities, product-blending capabilities and is connected to a pipeline that supplies residual fuel oil to two power generating stations. The Company’s Amsterdam terminal has a total storage capacity of 3.8 million barrels. This facility is located at the Port of Amsterdam and primarily stores petroleum products, including gasoline, diesel and fuel oil. This facility has two docks for vessels and five docks for inland barges. It owns 50% of ST Linden Terminal LLC, which owns a terminal and storage facility in Linden, New Jersey. The terminal is located on a 44-acre facility that provides it with deep-water terminalling capabilities at New York Harbor. This terminal primarily stores petroleum products, including gasoline, jet fuel and fuel oils. The facility has a total storage capacity of 4.0 million barrels and can receive and deliver products through ship, barge and pipeline. The terminal includes two docks and leases a third with draft limits of 36, 26 and 20 feet, respectively.

Revenues for the storage segment include fees for tank storage agreements, in which a customer agrees to pay for a certain amount of storage in a tank over a period of time (storage lease revenues), and throughput agreements, in which a customer pays a fee per barrel for volumes moving through its terminals and tanks (throughput revenues). The Company’s terminals provide blending, additive injections, handling and filtering services. It charges a fee for each barrel of crude oil and other feedstocks, which it delivers to Valero Energy Corporation's (Valero Energy) Benicia, Corpus Christi West and Texas City refineries from its crude oil storage tanks. Its facilities at Point Tupper and St. Eustatius charge fees to provide services, such as pilotage, tug assistance, line handling, launch service, spill response services and other ship services. The majority of products stored in its terminals are refined petroleum products.

Transportation

NuStar Energy’s pipeline operations consist of the transportation of refined petroleum products, crude oil and anhydrous ammonia. Refined product pipelines in Texas, Oklahoma, Colorado, New Mexico, Kansas, Nebraska, Iowa, South Dakota, North Dakota and Minnesota cover approximately 5,480 miles. The Company’s crude oil pipelines in Texas, Oklahoma, Kansas, Colorado and Illinois cover 940 miles. Its anhydrous ammonia pipeline in Louisiana, Arkansas, Missouri, Illinois, Indiana, Iowa and Nebraska covers 2,000 miles. As of December 31, 2011, it owned and operated refined product pipelines with an aggregate length of 3,130 miles originating at Valero Energy’s McKee, Three Rivers and Corpus Christi refineries and terminating at certain of NuStar Energy’s terminals, or connecting to third-party pipelines or terminals for further distribution, including a 25-mile hydrogen pipeline (collectively, the Central West System); a 1,910-mile refined product pipeline originating in southern Kansas and terminating at Jamestown, North Dakota, with a western extension to North Platte, Nebraska and an eastern extension into Iowa (the East Pipeline); a 440-mile refined product pipeline originating at Tesoro Corporation’s Mandan, North Dakota refinery and terminating in Minneapolis, Minnesota (the North Pipeline); crude oil pipelines in Texas, Oklahoma, Kansas, Colorado and Illinois with an aggregate length of 940 miles and crude oil storage facilities providing 1.9 million barrels of storage capacity in Texas, Oklahoma and Colorado that are located along the crude oil pipelines, and a 2,000-mile anhydrous ammonia pipeline originating at the Louisiana delta area that travels north through the midwestern United States forking east and west to terminate in Nebraska and Indiana (the Ammonia Pipeline).

The refined products transported in these pipelines include gasoline, distillates (including diesel and jet fuel), natural gas liquids and other products produced by Valero Energy’s McKee, Three Rivers and Corpus Christi refineries. These pipelines deliver refined products to key markets in Texas, New Mexico and Colorado. As of December 31, 2011, the Central West System transported approximately 104.8 million barrels. The East Pipeline covers 1,910 miles, including 242 miles that are temporarily idled, and moves refined products and natural gas liquids north in pipelines ranging in diameter from 6 inches to 16 inches. The East Pipeline system also includes storage capacity of approximately 1.2 million barrels at its two tanks farms at McPherson and El Dorado, Kansas. The East Pipeline transports refined petroleum products and natural gas liquids to NuStar Energy and third party terminals along the system and to receiving pipeline connections in Kansas. Shippers on the East Pipeline obtain refined petroleum products from refineries in Kansas, Oklahoma and Texas. During 2011, the East Pipeline transported approximately 51.9 million barrels. The North Pipeline originates at Tesoro’s Mandan, North Dakota refinery and runs from west to east approximately 440 miles from its origin to the Minneapolis, Minnesota area. During 2011, the North Pipeline transported approximately 15.3 million barrels.

The East and North Pipelines also include 21 truck-loading terminals, through which refined petroleum products are delivered to storage tanks and then loaded into petroleum product transport trucks. The Ammonia Pipeline is connected to multiple third-party-owned terminals, which include industrial facility delivery locations. Product is supplied to the pipeline from anhydrous ammonia plants in Louisiana and imported product delivered through the marine terminals. Anhydrous ammonia is used as agricultural fertilizer. It is also used as a feedstock to produce other nitrogen derivative fertilizers and explosives. During 2011, the Ammonia Pipeline transported approximately 1.5 million tons (or approximately 13.8 million barrels). The Company’s crude oil pipelines transport crude oil and other feedstocks from various points in Texas, Oklahoma, Kansas and Colorado to Valero Energy’s McKee, Three Rivers and Ardmore refineries. It uses crude oil storage facilities in Texas, Oklahoma and Colorado, located along the crude oil pipelines, to store and batch crude oil prior to shipment in the crude oil pipelines. Its crude oil pipelines also transport crude oil and other feedstocks to the ConocoPhillips Wood River refinery in Illinois. During 2011, the crude oil pipelines transported approximately 111.6 million barrels. It also owns three single-use pipelines, located near Umatilla, Oregon, Rawlins, Wyoming and Pasco, Washington, each of which supplies diesel fuel to a railroad fueling facility.

Revenues for the pipelines are based upon origin-to-destination throughput volumes traveling through its pipelines and their related tariff rates. Its refined petroleum product pipelines delivers products to the pipeline from refineries or third-party pipelines. Shipments are tested or receive certifications to ensure compliance with its product specifications. It charges its shippers tariff rates based on transportation from the origination point on the pipeline to the point of delivery. It invoices its refined product shippers upon delivery for its Central West System and its North and Ammonia Pipelines, and it invoices its shippers on its East Pipeline when their product enters the line. Shippers on the Company’s crude oil pipelines deliver crude oil to the pipelines for transport to refineries that connect to the pipelines. It uses Supervisory Control and Data Acquisition remote supervisory control software programs to monitor and control its pipelines.

Asphalt and Fuels Marketing

NuStar Energy’s asphalt and fuels marketing segment includes asphalt operations, its fuels marketing operations. The Company’s asphalt operations include two asphalt refineries, at which it refines crude oil to produce asphalt and certain other refined products. Within its fuels marketing operations, it purchases crude oil and refined petroleum products for resale. The Paulsboro refinery is located in Paulsboro, New Jersey on the Delaware River. Its location on the Delaware River allows for direct access to receipts and shipments. The refinery consists of two petroleum refining units, a liquid storage terminal for petroleum and chemical products, three marine docks, a polymer-modified asphalt production facility and a testing laboratory. The Paulsboro refinery supplies various asphalt grades and intermediate products by ship, barge, railcar and tanker trucks to a network of twelve asphalt terminals in the northeastern United States.

These asphalt terminals, combined with asphalt storage at the refinery, provide the Company with an aggregate storage capacity of 4.0 million barrels that it owns or leases from third parties. The Savannah refinery is located in Savannah, Georgia adjacent to the Savannah River and is the only asphalt producer on the United States southeastern seaboard. The refinery includes two atmospheric towers, a tank farm, a marine dock, a polymer modified asphalt production facility, a testing laboratory and processing areas. The Savannah refinery supplies various asphalt grades by truck, rail and marine vessel to a network of nine asphalt terminals in the southeastern United States. These asphalt terminals provide it with an aggregate storage capacity of 1.9 million barrels that it owns or leases from third parties.

The Company produces several grades of asphalt products for various applications. The applications include hot mix paving, which is used in road construction, roofing shingles for housing construction, asphalt emulsions and asphalt cutbacks used for street maintenance, as well as polymer-modified asphalt, which is a premium asphalt cement used for roads. The majority of its asphalt customers are road and bridge construction companies operate asphalt hot mix plants that combine rock aggregate with asphalt to make road pavements. Its customers serve the private commercial sector by building residential roads, parking lots, asphalt paths and courts, as well as the public sector by building highways and transportation infrastructure for the various state Departments of Transportation. It obtains the crude oil processed in its asphalt refineries from Petroleos de Venezuela S. A. (PDVSA), the national oil company of Venezuela, under a long-term supply agreement.

The Company competes with Magellan Midstream Partners, L.P.

Company Address

NuStar Energy LP

19003 IH-10 West
SAN ANTONIO   TX   78257
P: +1210.9182000
F: +1302.6555049

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