What’s Driving Buckeye Partners, L.P. (BPL)’s Domestic Operations?

Source: Buckeye Investor Presentation

Another example of this occurred when Buckeye bought 33 liquid product terminals and 643 miles of pipeline assets from BP plc (ADR) (NYSE:BP) for $165 million. After closing the deal, Buckeye was able to sign on 32 new customers which yielded a 34% year-over-year increase in the EBITDA contributed by those assets. This is why Buckeye sees a lot of potential in acquiring terminal assets from companies like BP plc (ADR) (NYSE:BP) and Chevron, because it believes it can operate them more efficiently while also creating additional value for investors.

Where’s the growth?
Buckeye is seeing an increasing number of opportunities as a logistics solution provider for Bakken crude oil. Not only are there plans to accept Bakken oil at Perth Amboy, but the company’s Albany, N.Y., and Woodhaven, Mich., terminals have both become key solutions in the transportation of crude oil by rail. Outside of that, Buckeye sees crude oil storage and transportation potential at its Chicago complex. Growth opportunities, both organic and acquired, are in abundance at Buckeye as its assets provide a key logistical role in the transportation of petroleum-based products to the population centers of the Northeast and Midwest.

Final Foolish thoughts
Buckeye is really well positioned to benefit from the continued growth in crude oil production here in the U.S. The company has a number of expansion and acquisition opportunities which should enable it to keep growing its distribution. Not only that but Buckeye could one day become an acquisition target of a larger MLP looking to build its presence in the highly populated marketplace of the Northeast.

The article What’s Driving Buckeye Partners’ Domestic Operations? originally appeared on Fool.com and is written by Matt DiLallo.

Fool contributor Matt DiLallo has no position in any stocks mentioned. The Motley Fool recommends Chevron.

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