Sunoco, Royal Dutch Unit Ink Deal - Analyst Blog

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Energy pipelines and terminals operator, Sunoco Logistics Partners LP ( SXL ) has inked a long-term deal with Shell Trading US Company (STUSCO), an affiliate of European energy major Royal Dutch Shell plc ( RDS.A ). Per the deal, STUSCO will become an anchor customer of the Mariner South project of Sunoco.

Management reveals that in order to build high-standard export and import facilities of liquefied petroleum gases (LPG) in the Gulf Coast of U.S., the Mariner project will unite Mont Belvieu-based storage and fractionation terminals of Lone Star NGL LLC with the pipeline facilities of Sunoco, that run from Mont Belvieu, Texas to Nederland, Texas. Lone Star is a joint venture between natural gas pipeline operator, Energy Transfer Partners LP ( ETP ) and natural gas service provider, Regency Energy Partners LP ( RGP ).  

The Mariner South project is expected to have a capacity to transport 6 million barrels of LPG per month initially. The project is expected to be online by the first quarter of 2015.

Philadelphia-based Sunoco, a master limited partnership (MLP), acquires, owns, and operates a geographically diverse portfolio of refined products and crude oil pipelines and terminal facilities. Sunoco Logistics is organized into four segments - Refined Products Pipeline System, Terminal Facilities, Crude Oil Pipeline System, and Crude Oil Acquisition and Marketing.

Sunoco currently retains 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.    

With low-risk and stable cash flow-generating energy infrastructure assets, Sunoco offers investors an opportunity to capture income growth through steadily-rising cash distributions and capital appreciation.

However, unfavorable regulatory changes by the Federal Energy Regulatory Commission (FERC) would impact the partnership's results.



ENERGY TRAN PTR (ETP): Free Stock Analysis Report

ROYAL DTCH SH-A (RDS.A): Free Stock Analysis Report

REGENCY ENERGY (RGP): Free Stock Analysis Report

SUNOCO LOGISTIC (SXL): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: ETP , MLP , RDS.A , RGP , SXL

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