On April 8, 2014, the units of
Buckeye Partners, L.P.
) touched a 52-week high of $77.20. The unit price was finally
closed at $76.26, up 0.4% from the previous day's closing. We
believe that the partnership's systematic capital investments in
growth projects, positive impact from the acquisition of several
) assets and payment of cash distribution at regular intervals
have led to the surge in unit price.
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We appreciate Buckeye Partners' continuous effort towards
expansion of its asset base. The partnership plans to invest
$280-$310 million in 2014 under its growth capital projects. In
2013, Buckeye Partners invested substantial amount to expand its
crude oil rail and butane blending capabilities. Currently, the
partnership is in the middle of development at the Perth Amboy
Terminal. The scheduled completion of these projects will enable
Buckeye Partners to meet the increasing demand from the upstream
In addition to extending existing operations, Buckeye Partners is
also pursuing an inorganic growth strategy to enhance its service
capacity. In Dec 2013, the partnership completed the acquisition
of 20 liquid petroleum products terminals from Hess Corporation.
This acquisition enabled Buckeye Partners to increase its storage
capacity by around 39 million barrels.
Apart from utilizing funds for enhancing midstream portfolio,
Buckeye Partners also follows a practice of regular payout of
cash distribution. Since 1986, the partnership has paid cash
distribution every quarter. In Feb 2014, Buckeye Partners
increased its quarterly cash distribution rate by 4.8% year over
year to $1.875 per unit.
During fourth-quarter 2013 earnings call, Buckeye Partners
announced that it has modified the operating divisions and
reorganized the reporting segments as per its long-term
Buckeye Partners currently has a Zacks Rank #2 (Buy). Some other
stocks worth considering in the oil and gas pipeline industry
Enterprise Products Partners L.P.
Magellan Midstream Partners LP
), each carrying a Zacks Rank #2 (Buy).