Low crude prices may delay projects: NuStar

OREANDA-NEWS. Low crude prices may delay NuStar Energy's new midstream projects and expansions, while the contango pricing structure is lifting its storage business, the company said today.

NuStar is working to develop pipeline projects outside of the Eagle Ford and some expansion projects in the Eagle Ford, but said low crude prices may delay development.

"Certainly some of the growth in the shale plays is slowing down, but it remains to be seen how slow," said senior vice president Danny Oliver.

The collapse of the Light Louisiana Sweet (LLS) and West Texas Intermediate (WTI) spreads has cut unit train traffic to the company's St James, Louisiana, facility "quite significantly." The company no longer forecasts volumes coming to the facility outside of those already contracted.

The company is also seeing more interest and higher rates for crude oil storage as a result of the contango price structure, which incentivizes storing crude for sale later at higher prices.

NuStar reported a fourth-quarter profit of \\$163.3mn today.