Genesis Energy’s Major Organic Projects

Genesis Energy’s capital expenditure

In the previous part of this series, we looked at Genesis Energy’s (GEL) analyst-expected distributions. In this article, we’ll look at Genesis Energy’s planned capital expenditure and organic projects that might drive its distributable cash flows and distributions in the future.

Genesis Energy’s Major Organic Projects

Genesis Energy’s growth capital expenditure for the first six months of 2015 was ~$232.6 million, compared to $230.5 million spent during the same period of 2014. Genesis Energy’s majority capital was allocated to its Onshore Pipeline Transportation and Supply and Logistics segments.

Genesis Energy’s planned capital expenditure

The partnership has forecasted its full year 2015 capital expenditure to be $580 million. This includes investment in four major organic projects. Genesis Energy’s peers, Sunoco Logistics (SXL), Buckeye Partners (BPL), and Plains All American Pipeline (PAA) are expected to spend $2.5 billion, $0.84–$0.92 billion, and $2.1–$2.3 billion, respectively, for the whole of 2015.

Genesis Energy alone constitutes 3.3% of the Global X MLP ETF (MLPA).

Genesis Energy’s major organic projects

  • ExxonMobil Baton Rouge Terminal Project: According to Genesis Energy, this project involves the construction of a “new crude oil, intermediates and refined products import / export terminal in Baton Rouge, Louisiana.” The terminal will include ~1.1 million barrels of storage capacity and will be connected to ExxonMobil’s (XOM) “LOLA System from Longview to receive Permian volumes.” The terminal is expected to be operational by the end of 2015.
  • Raceland Rail/Terminal Facility: Genesis Energy states that the Raceland project includes construction of rail to handle “the unloading of up to two unit trains per day (~140 kbd) with two parallel tracks capable of staging ~118 cars each.” Three 135 Kbbls (thousand barrels) tanks and one 110 Kbbls tank will also be constructed.
  • Genesis Inland Marine Growth: Genesis Energy has ordered eight push boats and 12 barges. It will start receiving deliveries from the order in 3Q15, with periodic deliveries through 2016.
  • Wyoming Crude Oil: This project is a crude oil midstream solution for the Powder River Basin shale play. According to Genesis Energy, it includes “pipeline transportation from new receipt stations in Campbell and Converse Counties to Pronghorn” and “rail loading and terminaling services at Pronghorn.” The project is expected to complete by 3Q15.

In the next article, we’ll look at analyst recommendations for Genesis Energy and its peers.