The fortunes of U.S. midstream companies in 2020 and beyond will be largely determined by how shrewdly they invested during the frenzied infrastructure build-out of the past few years. One of the most interesting case studies is San Antonio-based NuStar Energy, a master limited partnership born in 2001 to hold refiner Valero Energy’s midstream assets and spun off as a separate entity in 2007. In May 2017, as the industry was still recovering from the late 2014 plunge in crude oil prices, the MLP made a major play to capture growing Permian production through the ~$1.5 billion acquisition of Navigator Energy, which owned a crude oil gathering, transportation, and terminaling system in the Midland Basin. The purchase was widely panned as overpriced by analysts and investors, and NuStar’s unit price plummeted by 60%. But by 2019, the company’s Permian acquisition — and soaring exports from its Corpus Christi terminal — drove big year-on-year gains in NuStar’s fourth-quarter 2019 operating income and EBITDA. Today, we preview our new Spotlight report on NuStar.
Highway Headin’ South – NuStar Reaping Benefits of Permian Gathering and Export Investments
