MLP Protocol 102513

Key Adjustments:

  • Adjusted Crestwood Midstream Partners (CMLP) for the 14 million common unit offering at $21.19 on October 21 (5.2% discount to pre-announcement closing price on October 17).
  • Added Sprague Resources (SRLP) to the Downstream & Marketing MLP segment after its IPO at $18 on October 24.

News Items:

  • On October 21, Capital Product Partners (CPLP) announced the successful chartering of the M/T Avax to BP Shipping. The M/T Avax (47,834 dwt, IMO II/III Chemical Product Tanker built 2007 Hyundai Mipo Dockyard, South Korea) was chartered in October 2013 to BP Shipping for a minimum charter term of one year (+/- 30 days). BP Shipping has the option to extend the charter for an additional 12 months at a gross day rate of $15,600 per day. (Press Release)
  • On October 21, Devon Energy Corporation (DVN), Crosstex Energy, Inc. (XTXI) and Crosstex Energy, L.P. (XTEX) (collectively “Crosstex”) announced the signing of definitive agreements to combine substantially all of Devon’s U.S. midstream assets with Crosstex’s assets to form a new midstream business. The new business will consist of two publicly traded entities: the Master Limited Partnership and a General Partner entity (the “Master Limited Partnership” and the “General Partner”, collectively “the New Company”). The New Company is expected to have adjusted EBITDA of approximately $700 million in 2014, before synergies. The transaction is expected to be immediately accretive to both Crosstex and Devon. A name for the New Company will be announced prior to the closing of the transaction. (Press Release)
  • On October 21,  Northern Tier Energy (NTI) provided an operational update on its Saint Paul Park refinery and provided details relating to its planned third quarter earnings announcement. All repairs related to the previously announced fire in late September have been completed and both crude towers are fully functional at this time.  The cost of the repairs amounted to less than $3 million.  Since October 14, the Company’s Saint Paul Park Refinery has been operating at a crude oil charge of between 85,000 – 90,000 barrels per day (“bpd”), which is consistent with throughput constraints related to the planned Fluid Catalytic Cracker (“FCC”) turnaround currently being performed.  Northern Tier Energy expects to complete the FCC turnaround by the end of October, at which point the Company is expected to resume full operations.  The Company will provide further detail and fourth quarter throughput guidance on its third quarter earnings call, which will be held on November 12, 2013.  Third quarter throughput amounted to approximately 81,000 bpd. (Press Release)
  • On October 22, Plains All American Pipeline (PAA) announced that it has entered into a definitive agreement and plan of merger with PAA Natural Gas Storage (“PNG”) that provides for a merger whereby PNG will become a wholly-owned subsidiary of PAA, through a unit-for-unit exchange. Under the terms of the Merger Agreement, PNG’s public unitholders will receive 0.445 common units of PAA per PNG common unit surrendered pursuant to the Merger Agreement, plus cash in lieu of any fractional common units of PAA otherwise issuable in the Merger. The transaction is expected to result in approximately 14.7 million additional common units being issued by PAA. In connection with the closing of the Merger, the owners of PAA’s general partner have agreed to reduce their incentive distribution rights under PAA’s Agreement of Limited Partnership by $12 million in each of 2014 and 2015, $10 million in 2016 and $5 million per year thereafter. (Press Release)

IPO Filings:

  • American Petroleum Tankers Partners, L.P. (JAT) filed its initial S-1 on October 22. (Filing)

The MLP Protocol Monthly Analytics Report for November is now available, the December 2013 report will be available the weekend of November 29.

MLP Protocol Weekly Snapshot report: (click to open) MLPP 102513 Snapshot vFree

About Philip Trinder

President of MLP Protocol, investor, trader, and proponent of Master Limited Partnerships.
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