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BP Midstream PArtners spin-off brings in $133 million during its first year

The BP Whiting Refinery. A spinoff company that runs the pipelines to the refinery turned a $133 million profit in its first year of existence.

BP Midstream Partners, a spin-off company that owns the pipelines to the BP Whiting Refinery, made $133.1 million last year, its first year in existence.

The spin-off operates the pipelines that bring crude oil to, and ship refined gasoline from, the BP Whiting Refinery and other BP facilities across the country. The company grew pipeline throughput volume by 6 percent and brought in $143.9 million in cash available for distribution in 2018.

Chief Executive Officer Rip Zinsmeister said it was "a highly successful year for us in which we've built a track record of strong operational and financial performance, exceeding the forecast we gave at the time of our initial public offering."

"We delivered full-year cash available for distribution of $144 million, which was at the top-end of our guidance range and our portfolio of high-quality assets continues to perform very well," he said during a conference call with investors. "We consistently raised our distribution each quarter delivering mid-teens distribution growth to unitholders in 2018 in line with the target we outlined to unitholders at our initial public offering."

In the fourth quarter, BP Midstream Partners pulled in $36.8 million in net income, or 35 cents per unit. It generated $40.3 million in cash from operating activities during the fourth quarter and $173.8 million for the year.

At the end of 2018, BP Midstream Partners was sitting on $57 million in cash-on-hand.

BP Midstream Partners' assets include the BP2 crude oil pipeline system that ships crude oil from the Griffith Terminal to BP’s Whiting Refinery, the River Rogue refined pipeline system that transports petroleum products from the BP Whiting Refinery to Detroit, and the Diamondback pipeline system that sends diluent from Black Oak Junction in Gary to Illinois.

"Our success over the past year is a testament to the quality of our asset portfolio and its ability to generate stable, predictable cash flows with minimal impact from fluctuations in energy commodity markets," Zinsmeister said during the conference call with investors. "The organic growth potential of our onshore and offshore assets, whether through the growth and processing of advantaged feedstock or commercial optimization programs at BP's Whiting Refinery or production growth from new projects and technology advancements in the offshore Gulf of Mexico Deepwater, and perhaps most importantly, having a strong supportive sponsor in BP, which underpins the robustness and flexibility of our sponsored (master-limited partnership) model."

In 2019, the company expects to bring in $160 million to $170 million in cash for distribution.


Business Reporter

Joseph S. Pete is a Lisagor Award-winning business reporter who covers steel, industry, unions, the ports, retail, banking and more. The Indiana University grad has been with The Times since 2013 and blogs about craft beer, culture and the military.