PBF Logistics’ strong EBITDA growth
PBF Logistics’ (PBFX) 2Q15 EBITDA (earnings before interest, tax, depreciation, and amortization) increased more than six times its 2Q14 level of $4 million. The MLP was listed on the New York Stock Exchange (or NYSE) in May 2014. It has generated -20% returns since its listing.
PBF Logistics was formed in February 2013 by PBF Energy (PBF) to own and operate crude oil and refined products terminals, pipelines, and other logistics assets.
PBF has a 94.3% economic interest in PBFX’s general partner. PBF LLC, PBFX’s general partner, holds 53.8% limited partner interest in PBFX. The remaining limited partner interest is owned by the public.
About PBF Logistics
The above graph shows the growth in PBF Logistics’ EBITDA since its listing. PBF Logistics stores and transports crude oil and refined products. It’s a fee-based MLP. PBF Logistics doesn’t own or receive any payments based on the value of the crude oil or products handled. It doesn’t engage in commodities trading. PBF Logistics’ assets are integral to the operations of PBF Energy’s refineries in Ohio, Delaware, and New Jersey. PBFX generates all its revenues from direct or indirect transactions with PBF Energy.
PBF Logistics has various long-term, fee-based agreements with PBF, with commitments to provide PBF Logistics with minimum monthly throughput volumes of crude oil and refined products.
PBF Logistics is expanding its asset base
PBF Logistics’ high EBITDA growth is due to regular asset acquisitions from PBF. The recently formed MLP is in its expansion phase. Its fee-based revenues and absence of commodity price exposure makes it an attractive investment. PBF Logistics should benefit from PBF’s recent acquisition of the Chalmette refinery in Louisiana from ExxonMobil (XOM). The acquisition is expected to increase PBF’s refining capacity by 35%.
Enbridge Energy Partners (EEP), Enterprise Products Partners (EPD), Genesis Energy (GEL), and NuStar Energy (NS) are some other MLPs that operate crude oil pipelines. EPD forms ~10% of the Global X MLP ETF (MLPA).