Nustar Energy Sees Improved Results On Increased Storage Demand

Storage lease revenues rose 17 percent in the third quarter of 2015.

Rising demand for oil and oil products storage has sent Nustar Energy L.P.'s storage lease revenues rising in the third quarter of 2015, leading to a slightly improved net income compared to the same period last year, the company announced in a financial statement.

"Higher storage utilization and positive renewals at several of our terminals, as well as the added benefit from our Linden terminal acquisition, contributed to a 17 percent increase in storage lease revenues for the quarter," the company said. 

Storage revenues rose to $130 million from $111 million, while overall net income also rose to $65 million from $62 million.

NuStar added that despite the pullback on shale production in the U.S., its pipeline segment saw higher crude and refined product throughput volumes, though the year's final figures have been revised down from estimates made at the beginning of the year. 

The gains however, were somewhat dampened by declines in the company's fuel marketing business, which reported a loss of $1.8 million from gains of $7.5 million a year ago. 

"Our fuels marketing segment EBITDA is now projected to be in the range of $10 to $20 million, less than previous guidance, due to weaker than expected margins across the segment," the company said. 

Overall revenues have also dropped sharply to $494 million from $795 million a year ago, but the company remains upbeat on its future outlook.

"We expect increased throughputs on our refined product pipelines to be largely offset by lower projected Eagle Ford crude oil system volumes," the company said.

"We project 2016 EBITDA in our fuels marketing segment to be $15 to $35 million.

"Based on our current projections, we expect to cover our distribution again for the full-year 2016."