Koch Industries has many ways it will profit from the Keystone XL and it seems we have one more way we can add on how they will profit. Through a partnership or ownership with Valero it seems Koch will profit greatly. This blog is a gathering of information that supports that Koch’s is tied to Valero who happens to be considered the biggest Keystone XL Supporter.
After the Keystone XL eas put on hold spokesman Bill Day said they are still in support of the Keystone Xl. It is said 1600 Valero workers are expanding the Port Author.
It is said that by many Valero will profit big from the Keystone XL. It has two refineries in Texas and has been a big supporter of the oil pipelines coming to Texas. In texas they have their Port Author Refinery and Valero Texas City Refinery.
Even in Wikipedia out of all companies that do have an interest in the Keystone, they document the interest that Valero had in the Keystone XL project.
The project was originally developed as a partnership between TransCanada and ConocoPhillips. Certain parties who have agreed to make volume commitments to the Keystone expansion have an option to acquire up to a combined 15% equity ownership. One of such companies is Valero Energy Corporation. On August 12, 2009, however, TransCanada received regulatory approval to purchase ConocoPhillips’ interest in the project and is now the sole owner of the Keystone Pipeline System.
In 2002 Koch Holdings Enterprises LLC bought 40% ownership of a natural gas liquids fractionator from subsidiaries of Valero Energy Corp., San Antonio. Terms of the deal aren’t disclosed.
Koch Holdings Enterprises, through its subsidiaries, is now an 80% shareholder in the 160,000 b/d Mont Belvieu 1 fractionator, which continues to be operated by Koch Hydrocarbon Southwest LLC. Duke Energy Corp., Charlotte, NC, has 20% ownership. Mont Belvieu, Tex., is 30 miles east of Houston.
“This acquisition is part of an overall strategy to realign the processing, transportation, marketing, and trading businesses of the various Koch natural gas liquids companies,” said Ron Vaupel, president of Koch Hydrocarbon LP.
Until this transaction, Diamond-Koch entities—50:50 ventures originally formed by Koch subsidiaries and Ultramar Diamond Shamrock Corp., San Antonio—held 80% interest in the fractionator. Valero acquired Ultramar Diamond Shamrock (OGJ, May 14, 2001, p. 38).
Koch Holdings Enterprises bought the Valero shares for an undisclosed price.
On November 2011 ThinkProgress wrote that” Valero is publicly “dedicated” to the Keystone XL project, and their 310,000 barrels per day Port Arthur, Texas refinery would receive the Alberta-born crude. Valero has invested heavily to upgrade the Port Arthur plant to handle “heavy” “sour” crude (a.k.a. tar sands DilBit) for the past few years, anticipating the pipeline’s completion.”
What we don’t see is that Koch has ownership in Valero subsidiaries. For years they also have been working on this expansion project with Valero. Years beyond that they have been partners. I guess you would call this a hidden partnership that is also working on very similar so-call expansion projects as Valero for the Keystone below.
In an article by Dan Wallach for the Beaumont Enterprise he writes of an article about Valero and the Keystone XL. Valero Refinery mangager Greg Gentry says there is an agreement to ship and estimate of 700,000 barrels per day that flow to Texas Gulf Coast from Alberta Tar sands. And David Penning, project manger for the Keystone XL said “There’s too much riding on it.”
Through cross reference from Nu star Websites and Koch Pipeline on their current expansions and information contain through other news releases, it seems Nu Star an actual subsidiary of Valero Corp and Koch pipeline a subsidiary of Koch Industries are working on the same location of the project that Valero is involved in.
Ultramar Diamond Shamrock Corp. is still a subsidiary of Valero, but it seems that Koch and Valero’s Nustar, and the Keystone XL are working on an expansion project in Corpis Christi.
Even if Koch Industries was no where involved in any of these projects they still have a 40% ownership.
Pipeline construction has lagged the quick ramp up of the light crude oil production. Valero has said it currently runs about 40,000 bpd of Eagle Ford crude at the Three Rivers refinery and plans to increase it to 60,000 bpd by year end.
Valero also runs Eagle Ford at a small light crude unit at its refinery in Corpus Christi. It is currently running about 25,000 bpd and hopes to increase it to 40,000 bpd by the end of 2011.
In conjunction with privately-held Koch pipelines, NuStar has already upped pipeline capacity from the Eagle Ford plan by 30,000 bpd by reactivating a pipeline that carries the oil to terminals in Corpus Christi.”
NuStar Logistics and Koch Pipeline Company, L.P. Transporting Eagle Ford Crude to Corpus Christi
Tuesday, July 19, 2011
In the past 13 months, Koch Pipeline has significantly increased its capabilities to move Eagle Ford production. In May 2010, Koch Pipeline completed projects to increase its crude oil and gas condensates transportation capacity by about 25,000 barrels per day. With Arrowhead Pipeline, L.P., Koch Pipeline added another 50,000 barrels per day of crude and condensate capacity from the western Eagle Ford counties.
Koch Pipeline will soon complete a project to expand delivery capability to the Flint Hills Resources Ingleside waterborne terminal. The company is also building a crude oil terminal in Helena, along with a new line from Helena to Pettus, where the company has an existing crude oil terminal. Another 60-mile line from Pettus to Corpus Christi has received final approval.
Koch Pipeline is the largest transporter of South Texas crude and operates about 540 miles of active crude oil transportation lines in Texas. The company also has ongoing relations with other crude distribution systems that further its ability to provide services in the Eagle Ford area.
NuStar also has been working on other projects to expand and modify its pipeline and terminal infrastructure to transport and store even greater volumes of Eagle Ford Shale crude and condensate.
Velocity Midstream Partners, LLC is an experienced and well capitalized midstream company focused on engineering, acquiring, owning and operating efficient and cost effective gas gathering and transportation pipelines, compression, treating and processing assets in Texas, Louisiana, and Oklahoma.
–Velocity Midstream Partners, LLC—Clients who would like to maintain a non-operating, minority equity interest (typically 20% – 30%) in a Velocity gathering system and would like to potentially benefit economically as Velocity expands and provides service to surrounding producers;
Velocity Midstream Partners, LLC
These are Transcanada other partners, but it appears Valero stands out in being in a league of its own with its interest in the Keystone XL.
ONEOK, Inc also is another company years ago that the Koch brothers entered into a limited partnership agreement.
ONEOK, Inc.; Northern Border Partners, L.P.; Northern Plains Natural Gas Company; TransCanada Corporation; Northern Border Pipeline Company;
TC PipeLines, LP; UBS Investment Bank; Lehman Brothers, Inc.
ST: Oklahoma, Nebraska, Kansas
On December 31, 2001, Valero completed its acquisition of Ultramar Diamond Shamrock. The merger left Valero with over 4,700 Ultramar, Diamond Shamrock, and Beacon retail sites in the United States, Canada, and the Caribbean. With this acquisition, Valero also received ownership of Shamrock Logistics L.P., which was renamed Valero L.P. In 2006, the division was spun off as NuStar Energy. Starting in 2002, Valero has been expanding its marketing to the East Coast, specifically the Northeast and Florida, using the Valero brand. The acquisition also includes all past Diamond Shamrock assets, including the business portfolio of the former National Convenience Stores which was acquired by Diamond Shamrock in November 1995.
Valero is also one of the United States’ largest retail operators with approximately 6,800 retail and branded wholesale outlets in the United States, Canada, United Kingdom, and the Caribbean under the Valero, Diamond Shamrock, Shamrock, Ultramar, Beacon, and Texaco brands.
After Valero and Koch donate millions, NPRA president begs for more money to fight Prop 23
Despite obtaining over $4 million from Valero, $1.5 million from Tesoro and $1 million from Koch Industries subsidiary Flint Hills Resources, the president of the National Petrochemical and Refiners Association sent out a plea, literally, for more money to undermine California’s legislative effort to curb greenhouse gas emissions and implement more clean energy.
A brief look at said pipelines involved in the Keystone are expecting big returns.
TC Pipelines manages and owns natural gas pipelines, often in partnership with other companies. A recent acquisition of a 25% interest in two pipelines from TransCanada Corp. should immediately boost TC’s cash flow and earnings.
TC Pipelines is owns 50 percent of Northern Border, with ONEOK Partners, L.P. (ONEOK Partners) owning the other 50%.
NuStar Energy LP (NS)
Texas-based NuStar Energy operates oil pipelines and terminals in six countries. It’s the second largest liquids terminal operator in the world and also one of the world’s largest asphalt refiners.
The company is currently in acquisitive mode, making plans to buy small pipelines and facilities that will position it to move oil from shale fields that have become popular with exploration companies. NuStar’s strong cash position and reasonable debt load should make for smooth buying.
NS Stock Chart by YCharts
While NuStar shares already offer some of the best yields around, management has indicated that recent acquisitions should feed higher distributions in the near future.