In the first week of July, we connected our Corpus Christi to Three Rivers, Texas, 16-inch crude oil pipeline to a pipeline constructed by Texstar Midstream Services. These two interconnected lines are moving Eagle Ford shale crude oil from Frio County, South Texas to Corpus Christi. This is the third pipeline project we have completed in the Eagle Ford shale in the last year, giving us the ability to move up to 250,000 barrels per day of Eagle Ford crude to the Corpus Christi market.
On July 6, we announced plans to sell 50% of our asphalt business to Lindsay Goldberg and create a joint venture. This transaction is moving ahead as planned and is expected to close no later than September 30. After closing, we expect to deconsolidate the asphalt operation.
These July transactions are part of our plans to change the strategic direction of NuStar by reducing our exposure in the margin-based portion of our business and becoming more focused on optimizing and growing the fee-based storage and pipeline transportation segments of the company. I’ll talk more about future plans for the fee-based side of the business later in this call.
Taking a look at NuStar’s second quarter earnings, total EBITDA for the company was negative $161 million. Obviously, that’s significantly below last year’s second quarter. And it’s primarily the result of $272 million of non-cash charges related to asset impairment, mainly related to the write-down of the company’s asphalt refineries as a result of the expected sale of 50% of this asphalt business to an affiliate of Lindsay Goldberg. Those impairment charges were partially offset by a $29 million pre-tax non-cash gain on a legal settlement. Excluding this and other items, second quarter 2012 adjusted EBITDA would have been $88 million.Read the rest of this transcript for free on seekingalpha.com
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