NuStar Energy will spend $200mn-250mn in 2017 on its planned LPG and refined products export pipeline from the US to Mexico.
The project has been delayed because of organizational changes at Mexico's state-owned oil company Pemex, a partner in the project.
The line is now scheduled to come online in 2018, said NuStar chief executive Brad Barron while discussing third quarter earnings.
NuStar is still negotiating with Pemex on the deal, but Barron said he is confident an agreement is imminent. "We've had positive calls just in the last few weeks and few days. And we're on track to get that thing signed," he said.
The liberalization of the fuel market in Mexico, part of a comprehensive energy reform approved in 2014, is attracting significant midstream investment that will help expand access to US Gulf coast supplies.
NuStar is planning to spend $530mn-550mn in total capital spending in 2017, including the Mexico project.
Volumes on NuStar Energy's crude pipelines fell by about 20pc or 93,000 b/d in the third quarter compared to a year earlier, amid lower output in the Eagle Ford shale in south Texas.
NuStar is in the process of buying terminals and other assets in Corpus Christi, Texas, from Martin Midstream Partners.
The deal includes a 900,000 bl crude storage terminal, a refined products barge terminal, certain pipelines and related easements, as well as dockage and transloading assets.
Martin Midstream expects net proceeds of the sale to be about $93mn after transaction fees and expenses, in addition to cash payments previously received for relocating certain dockage assets.
The merger will allow NuStar to merge two docks in Corpus Christi, giving customers more options, the company said today. NuStar is reaching out to existing customers offering new deals to take advantage of the joint facilities. The merger will also be "a net positive" for Martin customers who have contracts coming up for renewal, Barron said.
The transaction is expected to close by the end of 2016.
