Buckeye Partners, L.P. Does Not Expect Material Impact From Recent FERC Income Tax Allowance Ruling
16 March 2018 - 9:30PM
Buckeye Partners, L.P. (“Buckeye”) (NYSE:BPL) announced today that,
although Buckeye is a Master Limited Partnership (“MLP”), it does
not expect the Federal Energy Regulatory Commission’s (“FERC”)
revised policy statement issued yesterday holding that pipeline
companies organized as MLPs are not entitled to recover an income
tax allowance in their costs of service to have a material impact
on Buckeye’s operating results.
FERC’s order addresses the ability of an MLP to recover an
income tax allowance for rates that are determined on a
cost-of-service basis. A significant portion of Buckeye’s
rates on file with FERC have not been set on a cost-of-service
basis and therefore are not impacted by yesterday’s order.
For a number of markets in which Buckeye operates, Buckeye has
market-based ratemaking authority, which rates do not need to be
justified by a cost of service and, as a result, are not impacted
by yesterday’s order. Buckeye also has a number of negotiated
rates on file with FERC that were established through an open
season process and are supported by underlying contracts, which,
similarly, are not impacted by yesterday’s order. In
addition, Buckeye has a number of rates on file with state
regulatory agencies, none of which are impacted by yesterday’s
order. For Buckeye’s rates established by application of
FERC’s indexation methodology, wherein the underlying base rates
could be required to be justified by a cost of service if
challenged, Buckeye believes any potential impact would not be
material to Buckeye’s aggregate financial results.
About Buckeye Partners, L.P.
Buckeye Partners, L.P. (NYSE: BPL) is a publicly traded master
limited partnership that owns and operates, or owns a significant
interest in, a diversified global network of integrated assets
providing midstream logistic solutions, primarily consisting of the
transportation, storage, processing and marketing of liquid
petroleum products. Buckeye is one of the largest independent
liquid petroleum products pipeline operators in the United States
in terms of volumes delivered, with approximately 6,000 miles of
pipeline. Buckeye also uses its service expertise to operate and/or
maintain third-party pipelines and perform certain engineering and
construction services for its customers. Buckeye’s global terminal
network, including through its interest in VTTI B.V. (“VTTI”),
comprises more than 135 liquid petroleum products terminals with
aggregate storage capacity of over 176 million barrels across our
portfolio of pipelines, inland terminals and marine terminals
located primarily in the East Coast, Midwest and Gulf Coast regions
of the United States as well as in the Caribbean, Northwest Europe,
the Middle East and Southeast Asia. Buckeye’s global network of
marine terminals enables it to facilitate global flows of crude oil
and refined petroleum products, offering its customers connectivity
between supply areas and market centers through some of the world’s
most important bulk liquid storage and blending hubs. Buckeye’s
flagship marine terminal in The Bahamas, Buckeye Bahamas Hub
Limited, is one of the largest marine crude oil and refined
petroleum products storage facilities in the world and provides an
array of logistics and blending services for the global flow of
petroleum products. Buckeye’s Gulf Coast regional hub, Buckeye
Texas Partners LLC, offers world-class marine terminalling, storage
and processing capabilities. Through its 50% equity interest in
VTTI, Buckeye’s global terminal network offers premier storage and
marine terminalling services for petroleum product logistics in key
international energy hubs. Buckeye is also a wholesale distributor
of refined petroleum products in certain areas served by its
pipelines and terminals. More information concerning Buckeye can be
found at www.buckeye.com.
This press release includes forward-looking statements that we
believe to be reasonable as of today’s date. Such statements are
identified by use of the words “anticipates,” “believes,”
“estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,”
“should,” and similar expressions. Actual results may differ
significantly because of risks and uncertainties that are difficult
to predict and that may be beyond our control. Among them are (i)
changes in federal, state, local, and foreign laws or regulations
to which we are subject, including those governing pipeline tariff
rates and those that permit the treatment of us as a partnership
for federal income tax purposes, (ii) terrorism and other security
risks, including cyber risk, adverse weather conditions, including
hurricanes, environmental releases, and natural disasters, (iii)
changes in the marketplace for our products or services, such as
increased competition, changes in product flows, better energy
efficiency, or general reductions in demand, (iv) adverse regional,
national, or international economic conditions, adverse capital
market conditions, and adverse political developments, (v)
shutdowns or interruptions at our pipeline, terminalling, storage,
and processing assets or at the source points for the products we
transport, store, or sell, (vi) unanticipated capital expenditures
in connection with the construction, repair, or replacement of our
assets, (vii) volatility in the price of liquid petroleum products,
(viii) nonpayment or nonperformance by our customers, (ix) our
ability to integrate acquired assets with our existing assets and
to realize anticipated cost savings and other efficiencies and
benefits, and (x) our ability to successfully complete our organic
growth projects and to realize the anticipated financial benefits.
You should read our filings with the U.S. Securities and Exchange
Commission, including our Annual Report on Form 10-K for the year
ended December 31, 2017, for a more extensive list of factors that
could affect results. We undertake no obligation to revise our
forward-looking statements to reflect events or circumstances
occurring after today’s date except as required by law.
Contact: Kevin J. GoodwinVice President &
TreasurerIrelations@buckeye.com(800) 422-2825
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