Back to top

Analyst Blog

Publicly traded energy master limited partnership NuStar Energy L.P. (NS - Analyst Report) entered into a deal with North American specialty hydrocarbons producer Calumet Specialty Products Partners LP (CLMT - Snapshot Report) to sell its San Antonio refinery and associated terminal in Elmendorf, Texas. Indianapolis-based Calumet will pay $100 million for the purchase along with $15 million for the inventory.

Per the deal, NuStar will sell the refinery, a terminal in Elmendorf and a 12-mile pipeline that links the refinery to the terminal. Along with these, Calumet will also acquire operating and logistics assets and inventories of NuStar Refining LLC and NuStar Logistics LP.

The San Antonio refinery was purchased by NuStar in April 2011, and has a capacity of 14,500 barrels per day of crude oil. Jet fuels, ultra-low sulfur diesel, naphtha, reformates, liquefied petroleum gas, specialty solvents are also produced at the complex.

NuStar will use the proceeds of this transaction to promote its fee-based pipeline and storage operations. The deal is expected to close on January 2, 2013.

Over the last few years, NuStar consolidated its business through a combination of organic efforts and accretive acquisitions. We believe the higher operating expenses associated with this expanded asset base may lead to reduced returns going forward.

Acquisitions have historically played a major role in the partnership’s growth profile and are expected to remain significant in the future. NuStar may find it difficult to complete accretive transactions moving forward, which could restrict its growth rate.

NuStar – which was spun off from the U.S. refiner Valero Energy Corp. (VLO - Analyst Report) in 2006 – currently retains a Zacks #5 Rank (short-term Strong Sell rating). We are also maintaining our long-term Underperform recommendation on the unit.
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
PLANAR SYST… PLNR 4.38 +3.79%
BITAUTO HOL… BITA 80.58 +3.67%
CHINA BIOLO… CBPO 47.65 +2.74%
YY ADS YY 87.88 +2.48%
MALLINCKROD… MNK 72.55 +2.30%