NuStar Energy LP (NYSE: NS) and PMI, an affiliate of Petróleos Mexicanos (Pemex), announced that the companies expanded operations in which NuStar transports and stores naphtha, a gasoline blending component, for PMI. Under the terms of the 10-year agreement, which extends a previous 10-year agreement between the two companies that went into effect in 2005, naphtha produced at Pemex’s Reynosa-Burgos complex in northern Mexico is transported via the NuStar Burgos-Valley pipeline system to NuStar’s terminal in Edinburg, Texas. From Edinburg, the naphtha is delivered into Transmontaigne’s terminal in Brownsville, Texas.
NuStar invested in the construction of a new 50,000 barrel (bbl) naphtha storage tank at the Edinburg Terminal to augment the project’s original 80,000 bbl storage capacity, to accommodate the additional grades and volumes of naphtha. The services under the revised agreement, which also includes a slight increase in throughput commitment from PMI, commenced on April 1.
Brad Barron, president and CEO of NuStar, noted that work continues on the previously announced joint venture (JV) with PMI to transport propane from the US into Northern Mexico, stating that he hopes to have an update on the JV in the very near future.
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