3 Under-the-Radar Midstream Companies
U.S. domestic oil and gas production is higher than it's been in decades, and as a result, the midstream industry is booming as well. But headline hogs such as Kinder Morgan and TransCanada aren't doing all the work.
Across the country there are hundreds of unheralded midstream outfits that are contributing as well. These companies may be potential buyout targets, destined for incredible growth, or about to go bust, and they are worth doing a little research on. With that in mind, today we begin to get to know three under-the-radar pipeline companies.
Genesis Energy (NYS: GEL)
The Houston-based company covers nearly every aspect of the midstream industry: pipelines, processing centers, storage tanks and terminals, trucks, and truck terminals.
In January, Genesis increased its presence in the Gulf of Mexico by purchasing Marathon Oil's pipeline stakes for $206 million. Genesis is also planning an oil-gathering pipeline with fellow midstream ace Enterprise Products Partners (NYS: EPD) . The pipeline project will serve a deepwater development area in the Gulf.
Buckeye Partners (NYS: BPL)
This Houston-based MLP promoted Chief Operating Officer Clark Smith to CEO last month, though his predecessor, Forrest Wylie, remains on board as non-executive chairman.
Smith's first announcement as CEO was Buckeye's acquisition of Chevron's marine terminal for liquid petroleum products in New York Harbor. The new facility is a mere 6 miles from another Buckeye complex in New Jersey and gives the company's inland network a direct connection to water access. It sits on 250 acres and has significant expansion potential.
The harbor facility was purchased for $260 million and is expected to close in the second quarter of this year.
NuStar Energy (NYS: NS)
In 2006, NuStar bought a 700-acre compound in Louisiana from Koch Industries. The company quickly set to work doubling storage capacity at the facility, a massive expansion project that is wrapping up now. However, because of the increasing volume of crude oil flowing in from the Bakken Shale, NuStar has announced that it's ramping up capacity again.
The company plans to spend $365 million to bring capacity up from 8 million barrels to more than 11 million barrels over the next two years.
Capacity isn't the only thing that's increasing at NuStar: 2011 total revenue was up nearly 50% over last year, to $6.6 billion.
These three stocks don't capture the headlines the way other midstream companies do, but they could be a valuable addition to your portfolio. Using Internet tools like My Watchlist can help you stay informed and figure out which one is best for you.
At the time this article was published Fool contributor Aimee Duffy doesn't own shares of the companies mentioned in this article. If you have the energy, check out what she's keeping an eye on by following her on Twitter, where she goes by @TMFDuffy.Motley Fool newsletter serviceshave recommended buying shares of Chevron, Enterprise Products Partners, and TransCanada. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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