NuStar Wins Long-Term Lease Contracts - Analyst Blog

San Antonio-based publicly traded partnership, NuStar Energy L.P. NS announced that it has entered into long-term lease contracts for three of its Asphalt terminals – the ones that the company retained after divesting its asphalt joint venture in Feb 2014.

NuStar Energy entered into a long-term contract with a subsidiary of the integrated oil major Royal Dutch Shell plc (RDS.A) to lease storage at its Houston, TX terminal, effective from May 1. The terminal has storage space of 85,000 barrels and comprises the Houston Ship Channel barge dock, two-bay truck loading and offloading racks and a Polymer-Modified Asphalt PMA mill.

Moreover, NuStar Energy has entered into a 5-year contract with an affiliate of the oil refining and marketing company, HollyFrontier Corporation HFC to lease storage space at its Rosario, NM and Catoosa, OK asphalt terminals.

The Catoosa contract came into effect on Apr 1, facilitating HollyFrontier to supply PMA and Performance Graded PG asphalts to the mid-continent. The terminal has storage space of 340,000 barrels, in addition to a barge dock, four-bay truck loading and offloading racks, rail facilities, a lab and a PMA mill.

The Rosario contract will be effective from Jul 1. The terminal offers 160,000 barrels of storage space, a two-bay truck loading rack, rail facilities, warehouse storage and a PMA mill.

NuStar Energy engages in the transportation and storage of crude oil as well as refined products in the U.S., the Netherlands Antilles, Canada, Mexico, and the U.K. The company currently has a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can consider a better-ranked player from the industry such as Magellan Midstream Partners L.P. MMP. The partnership currently sports a Zacks Rank #1 (Strong Buy).

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