Sunoco Logistics Partners L.P. announced net income attributable to partners for the six months ended 30 June 2016 of US$347 million (US$0.52 per limited partner unit, diluted), compared to US$312 million (US$0.75 per limited partner unit, diluted) for the prior year period. Adjusted EBITDA for the six months ended 30 June 2016 was US$594 million, compared to US$547 million for the prior year period. Net income attributable to partners was US$202 million for the three months ended 30 June 2016 (US$0.34 per limited partner unit, diluted). Adjusted EBITDA was US$245 million for the three months ended 30 June 2016. The second quarter of 2016 included approximately US$60 million related to the reversal of favourable LIFO inventory accounting that was recognised in 1Q16.
"We are pleased to announce year-to-date adjusted EBITDA of US$594 million," said Michael J. Hennigan, President and Chief Executive Officer. The Partnership's results for the second quarter of 2016 include the reversal of approximately US$60 million of positive LIFO inventory accounting in its Crude Oil segment that was reflected in the first quarter of 2016 results. Hennigan continued, "Excluding the timing impact caused by inventory accounting, our second quarter of 2016 adjusted EBITDA has grown sequentially. Our blue bar based organic projects continue to provide increased fee-based cash flow in a very difficult macro environment. Our ratable earnings have increased approximately 30% compared to the first half of last year and have more than offset reduced market-related, red bar opportunities."
Regarding the startup of two new crude oil projects, Hennigan said, "We are also pleased to report that we will be generating additional blue bar earnings with two new crude projects that started flowing in the third quarter – the Delaware Basin Extension and Permian Longview and Louisiana Extension pipelines. Both pipelines will ramp up, as most projects tend to, over the third quarter and we expect full operations in the fourth quarter. Additionally, the Delaware Basin Extension project demonstrates the continued synergistic capabilities within the Energy Transfer family of partnerships as this expansion will benefit from Energy Transfer's crude oil gathering system, and it will meet the needs of the producing community in the Delaware basin."
On the Bakken Pipeline transactions, Hennigan said, "We have closed on project financing, along with our partners, with a US$2.5 billion dollar credit facility. The structure provides the joint venture with additional flexibility and an attractive cost of capital as we work towards completing the project. The facility is anticipated to essentially provide all of the remaining capital requirements to complete the project. In addition, we have reduced our ownership in the project and have added two additional strategic partners by essentially selling half of our interest. We will receive US$800 million in cash at closing. The Bakken project will be the premier takeaway solution from the prolific North Dakota shale area and we are excited about the addition of these two strategic partners."
Adapted from press release by Rosalie Starling
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