NuStar (NS)

NuStar Energy L.P. (NuStar Energy), a Delaware limited partnership, was formed in 1999 and completed its initial public offering of common units on April 16, 2001. Nustar is engaged in the transportation of petroleum products and anhydrous ammonia, the terminalling and storage of petroleum products and the marketing of petroleum products. Nustar divides their operations into three reportable business segments: pipeline, storage and fuels marketing. As of December 31, 2016, our assets included approximately 8,700 miles of pipeline and 79 terminal and storage facilities that provide approximately 95 million barrels of storage capacity.

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NuStar Guidance: More Conservative than Texas

NuStar (NS) reported positive 4Q22 earnings, beating consensus and East Daley EBITDA expectations by $15 million (8%) and $17 million (10%), respectively. However, what caught our eye was a miss on the company's Permian crude gathering volumes and relatively weak 2023 guidance for the asset.

In 2022, NuStar’s Permian system averaged 584 Mb/d, below management's 600 Mb/d exit-2022 guidance. Management now guides to volumes exiting 2023 at 600 Mb/d, or just 3% growth Y-o-Y. East Daley forecasts crude volumes and performance for the NS – Permian asset in our NuStar Financial Blueprint. We forecast exit-2023 volumes to be 615 Mb/d, or 5.3% growth Y-o-Y on the system.

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