NuStar’s big year linked to overachieving in Permian shale

By Luke Geiver | February 11, 2020

For Nustar Energy, investments in shale oil have paid off in 2019 and appear to be positive for 2020. The San Antonio-based midstream company provided updates recently on the full year 2019, showing that income was up 41 percent over the previous year. Projects that were expected to cost roughly $500 million to $550 million came in under budget at roughly $467 million and the capacity of a crude export facility exceeded expectations.

According to Brad Barron, president and CEO, growth projects in NuStar's Permian Crude System exceeded projections. "Last year we announced that we expected to reach 450,000 BPD in 2019, and we exited the year over 460,000 BPD," he said. "And although rig counts across the Permian Basin as a whole were down 17 percent in 2019, the rig count on our acreage was up 7 percent. Similarly, while the Permian Basin’s total throughput grew 18 percent in 2019, our system grew nearly twice as much, or 34 percent, in 2019."

NuStar’s Corpus Christi Crude System also showed record numbers. "By the end of 2019 we had more than doubled the volumes we handled at our Corpus Christi export facility, averaging 613,000 BPD of volumes in December, with over 70 percent going over the dock and the remaining 30 percent moving back up into the Corpus Christi refinery markets," he said. "Even with only a partial year’s benefit from our project completion there, we handled a record total of 149 million barrels in our Corpus Christi Crude System, which includes 92 million barrels moved over our docks at our North Beach facility.”

Looking ahead, Barron believes NuStar is still going to continue excelling. “We are also off to a great start for 2020 in the Permian," Barron said. "With over 30 percent of the rigs in the Midland Basin residing on our Permian system, our throughput averaged 475,000 BPD in January, and February nominations continue to increase and have come in well ahead of our forecast. But our Permian Crude System is not the only part of our asset footprint that performed well in 2019.”