Midstream - Pipelines

NuStar, Oxy Sign NGL Transportation Deal; Idled Line to be Reactivated

Share Print Bookmark    |    Wednesday,February 05,2014

NuStar Energy L.P. has signed a long-term agreement allowing Occidental Petroleum (Oxy) to ship natural gas liquids (NGLs) on NuStar’s currently idled, 200-mile, 12-inch pipeline between Mont Belvieu and Corpus Christi, Texas.

NuStar has begun work to reactivate the line, reverse its flow and convert it from refined products service to NGL service. The pipeline has capacity to move approximately 110,000 barrels per day. Oxy will use a majority of the line’s capacity to transport NGLs via an interconnect with an Oxy pipeline to the Oxy Ingleside Energy Center export facility located in Ingleside, Texas, at the site of the former Naval base purchased by Oxy in 2012. NuStar will continue to market any remaining capacity on the pipeline. The pipeline project is scheduled to be completed and in full operation in the second quarter of 2015, although the pipeline may flow at reduced rates this year.

Once the line is in service, it is expected to generate approximately $23 million per year of incremental EBITDA for NuStar.

NuStar President and CEO Brad Barron commented: "Our Mont Belvieu-to-Corpus Christi pipeline is one of the key pipelines in our South Texas system, and we are very pleased to have reached an agreement with Oxy to reactivate and utilize the line. The agreement will begin generating distributable cash flow for NuStar in April of this year, and we look forward to exploring opportunities with Oxy and other companies to meet their NGL transportation needs."