[ID] => 11287
[post_author] => 34
[post_date] => 2019-07-23 11:15:47
[post_date_gmt] => 2019-07-23 10:15:47
[post_content] => NuStar Energy announced this past May that it had signed a definitive agreement to sell its St Eustatius terminal, located in the Caribbean Sea south-east of the Virgin Islands, to Prostar Capital for some $250m.
Speaking at the time of the announcement, Brad Barron, president and CEO of NuStar Energy, said: “It has become increasingly clear in recent months that the facility requires a new business model to ensure its long-term success and that NuStar’s best path forward is to sell the terminal to a buyer that is well-positioned to take advantage of the changing global crude oil trade flow patterns.”
Australia-based Prostar Capital has invested more than $400m of equity capital in infrastructure projects since its formation in 2012, and has experience in the bulk liquids storage sector through its ownership of Fujairah Oil Terminal (FOT) and GTI Fujairah in the UAE, which together operate more than 1.5m m³ of storage capacity.
The sale of the St Eustatius terminal follows on from NuStar Energy’s divestment of its European bulk liquids terminal operations to Canada-based Inter Pipeline in November 2018 for some $270m. Both sales were driven by a need to reduce debt and a desire to have funds available for growth projects in what Barron describes as “our core business in North America”.
SWEAT THOSE ASSETS
“Last year, we simplified our structure and eliminated the incentive distribution rights, minimised our need to access the equity capital markets, strengthened our coverage and improved our debt metrics. We also divested our non-core European assets at an attractive multiple, which allowed us to meet our three-year debt metric goal in a single year,” Barron said.
“In 2019, we are focused on continuing to improve our debt metrics, maintaining our strong coverage and executing on the great projects we have for our Permian Crude System and our Permian-driven opportunities like our Corpus Christi export facility projects, as well as our many other projects across our diverse asset base, including our bio-fuel infrastructure projects all along the West Coast,” he added.
The Corpus Christi export terminal, due into service in the third quarter, will rely on pipelines being built by NuStar and other interests to bring Permian Basin crude oil to the Gulf Coast. “By early 2020, approximately 2.1m additional barrels of long-haul crude pipeline capacity from the Permian to Corpus Christi will be placed into service, which should bring the total capacity of Permian crude pointed at the Port of Corpus Christi up to about 2.6m bbl and make the Port the number one crude export outlet in the US,” Barron says.
In addition, the “ripple effects” from increased production in the Permian Basin, as well as volumes from other shale plays, has given NuStar the opportunity to restart its unit train offloading facilities at its terminal in St James, Louisiana. “As the US is shifting from a net importer to a net exporter of crude, so too is St James’ role shifting,” says Barron. “We have been maintaining the optionality and connectivity of our St James facility so we can participate in the region’s evolution, and we have the facilities and the expansion capacity to capitalise on that opportunity.”
[post_title] => NuStar: Back to basics
[post_status] => publish
[comment_status] => open
[ping_status] => open
[post_name] => nustar-back-basics
[post_modified] => 2019-07-23 11:15:47
[post_modified_gmt] => 2019-07-23 10:15:47
[post_parent] => 0
[guid] => https://www.hcblive.com/?p=11287
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[comment_count] => 0
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NuStar Energy has been selling off what it sees as non-core assets to concentrate on the emerging potential in the domestic US oil and gas sector