TLLP to Fix North Dakota Pipeline - Analyst Blog

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Tesoro Logistics LP ( TLLP ), an affiliate of independent refiner Tesoro Corporation ( TSO ), intends to mend and replace the affected part of its North Dakota-based crude oil pipeline, which has spewed in excess of 20,000 barrels of oil in a wheat field. Transportation Pipeline and Hazardous Materials Safety Administration (PHMSA), the U.S department of transportation agency, has already approved Tesoro Logistics' plan. The cause of the incident is, however, not fully known.

Tesoro Logistics stopped operating the damaged portion of the pipeline system temporarily and the crude oil release was kept under control. The Tesoro Logistics estimated the remediation cost to be roughly $4.0 million. The partnership has made no comments regarding the date of restart of the pipeline.

Tesoro Logistics reveals that the oil spillage -- the worst in the history of the state -- did not affect the ground water, environment and wild lives. The pipeline, which spread over roughly 354 miles, was transporting crude oil to northwest North Dakota from Bakken shale play.   

Investors reacted negatively to the oil spillage news, announced during the mid trading hour on Oct 10, 2013. Yesterday, Tesoro Logistics settled at $54.86 per unit, down 2.6% from last Wednesday, the day before the pipeline leakage was detected.

Tesoro Logistics is scheduled to report its third-quarter 2013 results on Nov 8, after the closing bell. The Zacks Consensus Estimate stands at 46 cents per unit.   

San Antonio, Texas-based Tesoro Logistics is involved in the acquisition and development of logistics properties of crude oil and refined products. The partnership also operates those assets. Tesoro Logistics currently holds a Zacks Rank #5 (Strong Sell), implying that it is expected to significantly underperform the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at better performing oil and gas production pipeline master limited partnerships like Pioneer Southwest Energy Partners LP ( PSE ) and Energy Transfer Partners LP ( ETP ) that offer value. Pioneer Southwest Energy sports a Zacks Rank #1 (Strong Buy) while Energy Transfer Partners retains a Zacks Rank #2 (Buy).



ENERGY TRAN PTR (ETP): Free Stock Analysis Report

PIONEER SW EGY (PSE): Free Stock Analysis Report

TESORO LOGISTIC (TLLP): Free Stock Analysis Report

TESORO CORP (TSO): 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 , PSE , TLLP , TSO

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