November 4, 2015 [OPIS] - Independent liquids terminal and pipeline operator NuStar Energy LP said on Tuesday its storage lease revenues increased by 17% in the third quarter, helped by improved storage utilization and positive renewals at its terminals.
Storage lease revenues in the three months ended Sept 30 was $130.1 million, up from $111.4 million in the year-ago quarter.
“Higher storage utilization and positive renewals at several of our terminals, as well as the added benefit from our Linden terminal acquisition,” NuStar’s CEO Brad Barron said in a statement.
The company said that it expects its 2015 storage segment earnings to be much higher than 2014, boosted by better-than-expected throughput and renewals, and an expected insurance proceeds related to its Linden, N.J., terminal acquisition in Q4.
In January, NuStar took over full control of the Linden oil products terminal after purchasing a 50% equity share that it did not already owned from NIC Holding Corp.
The Linden terminal, which is located in the New York Harbor, has 4.3 million bbl of refined products storage capacity, primarily storing gasoline, jet fuel and fuel oils. It has a deep-water ship dock and a barge dock that are used for inbound and outbound shipments.
In July, the San Antonio-based company, organized as a publicly traded master limited partnership, said it planned to expand oil products storage capacity at its Linden Terminal to maximize utilization of marine docks.
In Q3, despite the recent pullback in domestic shale production, overall pipeline segment experience improved crude and refined products throughput volumes. The company’s pipeline throughput revenues increased about 5% year-over-year in Q3.
For 2016, the company said it expects increased throughputs on its refined product pipelines to be largely offset by lower projected Eagle Ford crude oil system volumes.
NuStar now expects its 2016 pipeline segment EBITDA should be “comparable to slightly higher” than 2015.
It expects 2016 storage segment EBITDA to decrease year-on-year due to lower projected storage throughputs at its North Beach terminal, which serves its South Texas Pipeline System, and the absence of expected current-year insurance proceeds in 2016.