Valero Files To Create a Logistics MLP - Valero Energy Partners

Valero Logistics Growth Investments

Valero has filed a registration statement with the SEC for the initial public offering of Valero Energy Partners (VLP).

VLP will serve as a vehicle for dropping down (selling) logistics assets from Valero. Logistics assets include everything that helps Valero delivery quality crude to its refineries: pipelines, rail cars, rail unloading, barges, ships, docks, tanks, etc.

Logistics MLPs trade at 10-15 times EBITDA (earnings before interest, taxes, depreciation, and amortization), while refineries trade at just 3-5 times EBITDA. That alone provides for incentive to spin off the assets to create value. Add the fact that more than 40% of Valero's investments are in logistics assets and its easy to see why VLP could easily be a stand along company.

Eagle Ford assets will likely be included in the initial transaction:

Valero Energy Partners LP expects its initial assets to include crude oil and refined petroleum products pipeline and terminal systems in the Gulf Coast and Mid-Continent regions of the United States that are integral to the operations of Valero's refinery located in Port Arthur, Texas, its McKee refinery located in Sunray, Texas, and its refinery located in Memphis, Tennessee.

Before the company can go public, the Valero board will need to approve the spin off and a management team will need to be assembled.

Port of Corpus Christi's Eagle Ford Oil Exports Exceed Oil Imports

The Port of Corpus Christi has reached a milestone that won't likely be reversed any time soon. Oil exports from the port are exceeding imports. During the month of August, the port saw oil exports rise to almost 3.9 million barrels (~124,000 b/d) compared to inbound cargo of just 2.8 million barrels (~90,000 b/d). One year prior in August of 2012, the port was exporting just 2.8 million barrels (~90,000 b/d) and importing over 3 million barrels (~100,000 b/d).

“There’s new wells being drilled everyday. Mainly, right now, they’re oil,” John LaRue, Port Director, said. “The gas part has not, it initially took off but because the price of natural gas is so low, they’re not drilling as many of those.”

NGL Energy Buys Eagle Ford Crude Oil Terminal & Barge Business

NGL Energy Partners Crude Oil Logistics Business

NGL Energy partners, based in Tulsa, Oklahoma, is purchasing Crescent Terminals LLC and its interests in Cierra Marine LP. The terminal facility adds 130,000 barrels of storage capacity and throughput capacity of 20,000 b/d. Cierra Marine's assets include four tow boats and seven crude oil barges. The deal roughly doubles the size of NGL Energy Partner's fleet of marine equipment.

The deal adds to the company's ability to service the inter-coastal waterways. NGL Energy Partners already operates the Rio Hondo Terminal and the Texas Intercoastal Marine Terminal.

Read the full press release at nglenergypartners.com

Don't Forget The Texas Eagle Ford Oil & Gas Expo In Corpus Christi- It starts tomorrow July 16th

Port of Corpus Christi Has Barges Waiting To Move Eagle Ford Oil

Trafigura Terminals Eagle Ford Port in Corpus Christi

The Port of Corpus Christi has gone from moving less than 10,000 b/d of crude oil in 2011 to approximately 200,000 b/d in August 2012 to almost 350,000 b/d now.

Ships are now standing in line to move Eagle Ford crude and port expansions simply won't come fast enough.

“The longest [wait] I’ve seen is about seven days,” Ray Harrison, the port’s assistant harbor master said last Friday.

There are several construction projects underway or in the works

• A new dock that can handle two 30,000 barrel barges will be in service this month
• A new public dock has been approved that can handle four 30,000 barrel barges
• Two other private projects on port land are being designed to load ships with 500,000 barrel capacity
• Trafigura Terminals is expanding and will be able to handle three medium-range tankers and two inland barges at the same time

As noted by RBN Energy, approximately 30% of the oil shipped out of the port is headed for Morgan City, almost 30% is headed for Houston, another ~10% Beaumont, and ~10% to Texas City. The rest is sent to various locations throughout Texas and Louisiana.

There have been several stories on the port in the past few days. You can read more at platts.com,rbnenergy.com, and at learn more about Trafigura's terminal at texdockrail.com

Plains All American Planning Cactus Pipeline - McCamey to Gardendale

Plains All American Eagle Ford Assets

Plains All American Pipeline announced a new $350 million pipeline that will move 200,000 b/d of crude oil from the Permian Basin into the Eagle Ford region. The Cactus Pipeline will be a 310-mile, 20-inch crude oil pipeline from McCamey, TX, to the Gardendale Area in La Salle County, TX.The pipeline is supported by a long-term capacity commitment and is expected to be in service in the first quarter of 2015. Plains estimates total costs will come in around $350 to $375 million.

From La Salle County, crude will have access to the Gardendale rail or Plains and Enterprise's Eagle Ford Joint Venture system. The Eagle Ford JV Pipeline provides direct access to Corpus Christi and Three Rivers, as well as access to Houston through Entrprise's South Texas Crude Oil Pipeline. In Corpus Christi, oil has access to marine terminals.

In an oil price environment with large basis differentials, options can create a lot of value. Permian crude will now have access to barges, railroads, and pipelines in South Texas.

Read the full press release at paalp.com