Buckeye Partners (BPL) expects refined products to form 67% of the total product mix for 2017, while crude oil and condensate are expected to form 22%. Crude oil’s share in Buckeye Partners’ product mix has increased significantly in recent years due to crude oil–focused organic and inorganic expansions. Crude oil’s share is expected to increase more in the coming years considering the partnership’s focus on expanding the crude oil pipeline infrastructure.
Currently, Domestic Pipelines and Terminals is Buckeye Partners’ largest business segment in terms of adjusted EBITDA. The segment accounted for 54% of the total adjusted EBITDA during the last 12-month period ending September 30, 2017. However, the segment’s contribution has decreased significantly in recent years due to the increase in the Global Marine Terminal segment’s share. The segment formed 44% of the total adjusted EBITDA during the last 12-month period ending September 30, 2017. However, the Global Marine Terminal segment’s share might come down in the coming years due to the partnership’s focus on domestic pipeline expansion.
The Merchant Services segment’s share, which currently accounts for ~2% of the partnership’s total EBITDA, isn’t expected to increase much in the coming years.
In the next part, we’ll discuss Buckeye Partners’ 4Q17 distribution and coverage.