Sunoco Logistics Partners L.P.
(
SXL
) announced the beginning of an Open Season, whereby it is looking
for customers for the pipeline segment, West Texas - Nederland
Access.
The pipeline, with an initial capacity of 40,000 barrels per
day, would be utilized for the supply of crude from West Texas to
the terminal at Nederland, Texas. With an expected start-up time in
the first quarter of 2013, this network will render producers in
West Texas and refiners in the Gulf Coast accessibility to the West
Texas Sour crude.
Sunoco Logistics will conduct the Open Season till May 11, 2012
through its subsidiary Sunoco Pipeline L.P.
West Texas Gulf Pipe Line Company and Mobil Pipe Line Company -
a unit of
Exxon Mobil Corp.
(
XOM
) are also partners in this project.
Philadelphia-based Sunoco Logistics is a master limited
partnership (
MLP
) that acquires, owns, and operates a geographically diverse
portfolio of refined product and crude oil pipelines and terminal
facilities. Oil refiner and marketer
Sunoco Inc.
(
SUN
) owns 34% of the partnership interest, including a 2% general
partner interest.
Sunoco Logistics currently retains a Zacks #1 Rank (Strong Buy
rating) for the short term. We are maintaining our 'Outperform'
recommendation for the longer term.
We believe that Sunoco Logistics owns a high-quality and diverse
portfolio of midstream assets that generate stable and recurring
revenues by way of long-term fee-based contracts. Over the past few
years, the partnership has consolidated its position in the
midstream business, which was achieved through a combination of
organic efforts and accretive acquisitions.
Additionally, the partnership's synergistic relationship with
Sunoco Inc. is beneficial on two accounts. First, a sound fee-based
relationship with Sunoco shields it from competitive pressures in
the MLP space and provides it with stable cash flows and consistent
top-line growth opportunities. Second, the partnership continues to
leverage its relationship with Sunoco to make joint
acquisitions.
The partnership has also established a track record of
consistent distribution growth - its current quarterly distribution
of 42 cents per unit ($1.68 per unit annualized) is up from 15
cents per unit (60 cents per unit annualized) at the time of its
2002 initial public offering.
SUNOCO INC (
SUN
): Free Stock Analysis Report
SUNOCO LOGISTIC (
SXL
): Free Stock Analysis Report
EXXON MOBIL CRP (
XOM
): Free Stock Analysis Report
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