By Tess Stynes
NuStar Energy LP (NS) said it reached a long-term agreement with
Occidental Petroleum Corp. (OXY) to reactivate an idled pipeline in
Texas, while also reporting its fourth-quarter loss widened sharply
on asset writedowns and lower product sales.
Under the pipeline agreement, Occidental will ship will ship
natural-gas liquids on NuStar's 200-mile pipeline between Mont
Belvieu and Corpus Christi, Texas. NuStar expects the line will
begin generating distributable cash flow in the second quarter of
this year and be placed in full natural-gas liquids service a year
later. Once in full service, the line is expected to generate about
$23 million a year of added earnings before interest, taxes,
depreciation and amortization.
"2013 was a major turning point for NuStar as we took steps to
significantly reduce our exposure to margin-based operations and
continued to invest in the growth of our more stable pipelines and
terminals business," President and Chief Executive Brad Barron
said.
NuStar reported a loss of $368.3 million, or $4.73 a unit,
compared with a year-earlier loss of $21.2 million, or 27 cents a
unit. The latest period included $4.94 a unit in one-time items,
mostly asset write-downs. The year-earlier period included 52 cents
a unit of expenses, mostly related to derivatives impacts and
cancelled capital projects.
Revenue decreased 20% to $785.4 million as product sales fell
27% to $548.2 million.
Analysts polled by Thomson Reuters expected per-unit profit of
33 cents and revenue of $841 million.
Write to Tess Stynes at tess.stynes@wsj.com
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