UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 
 
 
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 15, 2019
NuStar Energy L.P.
(Exact name of registrant as specified in its charter)
Delaware
001-16417
74-2956831
(State or other jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)
 
 
 
 
19003 IH-10 West
San Antonio, Texas 78257
 
 
(Address of principal executive offices)
 
 
 
 
 
(210) 918-2000
 
 
(Registrant’s telephone number, including area code)
 
 
 
 
 
Not applicable
 
 
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).    
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common units
Fixed-to-floating rate cumulative redeemable perpetual preferred units
 
NS
NSprA, NSprB and NSprC
 
New York Stock Exchange
New York Stock Exchange
 
 
 
 
 




Item 7.01    Regulation FD Disclosure.

Senior management of NuStar Energy L.P. (the “Partnership”) is meeting with members of the investment community at the MLP & Energy Infrastructure Conference on Wednesday, May 15, 2019, and Thursday, May 16, 2019. The slides attached to this report were prepared in connection with, and are being used during, the meetings. The slides are included in Exhibit 99.1 to this report and are incorporated herein by reference.

Item 9.01    Financial Statements and Exhibits.

(d)     Exhibits.

Exhibit Number
 
EXHIBIT
 
 
 
Exhibit 99.1
 






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
NUSTAR ENERGY L.P.
 
 
 
 
 
 
By:
Riverwalk Logistics, L.P.
 
 
its general partner
 
 
 
 
 
 
 
By:
NuStar GP, LLC
 
 
 
its general partner
 
 
 
 
 
Date: May 15, 2019
 
 
By:
/s/ Amy L. Perry
 
 
 
Name:
Amy L. Perry
 
 
 
Title:
Executive Vice President - M&A, Strategic Direction and Investor Relations and Corporate Secretary




Exhibit 99.1 MLP & Energy Infra struct ure C onference May 15 –16, 2019


 
Forward-Looking Statements Statements contained in this presentation other than statements of historical fact are forward-looking statements. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will likely vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance presented or suggested in this presentation. These forward-looking statements can generally be identified by the words "anticipates," "believes," "expects," "plans," "intends," "estimates," "forecasts," "budgets," "projects," "could," "should," "may" and similar expressions. These statements reflect our current views with regard to future events and are subject to various risks, uncertainties and assumptions. We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations. For more information concerning factors that could cause actual results to differ from those expressed or forecasted, see NuStar Energy L.P.’s annual report on Form 10-K and quarterly reports on Form 10-Q, filed with the SEC and available on NuStar’s website at www.nustarenergy.com. We use financial measures in this presentation that are not calculated in accordance with generally accepted accounting principles (“non-GAAP”) and our reconciliations of non-GAAP financial measures to GAAP financial measures are located in the appendix to this presentation. These non- GAAP financial measures should not be considered an alternative to GAAP financial measures. 2


 
The Permian Basin: PhenomenalIntroduction Growth Driving Midstream Opportunities


 
Last Year, NuStar Completed Its Stepped Plan to Achieve the Characteristics Demanded by the MLP Sector Strong Coverage Lower Leverage Simplified Structure/ Governance NYSE: NS No IDR Burden Maximized Self- Funding 4


 
In 2018, We Met, or Surpassed, All of Our Goals We surpassed our year-end coverage target We lowered our leverage to our three-year target in a single year We executed on our 2018 strategic capital program, efficiently and effectively We developed a number of new projects for future growth, building on both our Permian and legacy assets We operated safely and efficiently, and we again achieved some of the best HSE statistics in the industry 5


 
With Our High-Quality Assets, NuStar is Now Poised to Execute on Permian-Driven Growth Opportunities and to Continue Optimizing Our Legacy Assets Current Profile  Total Enterprise Value: ~$7 B  Total Assets: ~$6 B  Total Pipeline Miles: ~9,800  Total Storage Capacity: ~88 MMbbls  Volumes Handled(1):  1.5 MMBPD pipeline volumes  365 MBPD storage throughput terminal volumes NuStar has:  Highly integrated U.S. pipeline & terminal systems  Significant crude oil footprint in the Midland Basin of the Permian  First-class Gulf Coast export facilities  Minimal direct exposure to commodity prices Legend (1)Average daily Pipeline Segment and Storage Segment volumesfor 6 the quarter ending 3/31/19.


 
The Permian Basin: Phenomenal Growth Driving Midstream Opportunities


 
The U.S. is Now the Global Leader in Crude Production, Thanks in Large Part to the Permian Basin’s Tremendous Growth U.S. total crude production grew 12 U.S. Shale Production 2015-2023 to 12.0 MMBPD by the end of MMBPD 2018, exceeding Russia and 0.8 10 0.8 Saudi Arabia 0.8 0.7 1.7 1.6 U.S. shale production growth is 1.6 0.7 1.5 expected to continue to ramp 8 0.9 0.9 1.5 0.9 up, due almost entirely to the 0.6 0.9 1.6 strength of production in the 1.6 6 1.3 0.8 1.6 1.5 Permian 0.6 0.5 1.4 0.6 0.5 The Permian Basin’s growth and 1.1 1.3 4 1.2 1.0 growth expectations are 0.5 0.5 0.4 5.9 5.4 5.6 unprecedented: 1.2 5.0 2 1.6 1.2 4.3  Expected to be a record 4.6 MMBPD 3.5 by year-end 2019, over 50% of the 1.9 1.5 nation’s total shale output 1.3 0  Projected to exceed 5.2 MMBPD by 2015 2016 2017 2018 2019 2020 2021 2022 2023 end of 2020 and to increase to 6.0 Permian (shale only) Eagle Ford Niobrara to 7.0 MMBPD by 2030 Bakken Rest of U.S. Shale Total Shale Source: EIA, ESAI 8


 
The Breadth and Depth of the Permian’s Growth Potential is Unprecedented… If the Permian Basin were a country, it would rank #7 among the world’s top liquids producers  A pool of more recoverable oil than any field in the world except for Saudi Arabia’s Ghawar  250 miles wide, 300 miles long (75,000 square miles)  The Wolfcamp Formation alone is estimated to hold 20 billion barrels of oil The world’s hottest oil basin  Several majors and many E&P firms have shifted resources away from other plays to focus on the Permian  Even with oil in a $50 price environment, analysts see no immediate challenges to well economics and expect Permian investments to continue to provide double-digit returns in 2019  Currently accounts for 57% of nation’s active oil rigs Source: EIA, Baker Hughes, Rystad Energy 9


 
… And the Basin’s Resiliency and Efficiency Should Drive Strong Growth, in 2019 and Beyond Geopolitical factors have and continue to drive volatility in forecasted oil prices Despite volatility, analysts are projecting WTI prices to remain above $55 for the rest of the year MBPD Permian Basin oil production sensitivity through 2020 According to industry 7,000 experts, the resilience and 6,000 efficiency of the Permian 5,000 continues to produce 4,000 healthy growth even at $50 3,000 2,000 WTI 1,000 0 Source: Bloomberg (5/3/2019), EIA (4/9/2019), ESAI Incremental new (WTI@70) Incremental new (WTI@60) (4/25/2019), JP Morgan (4/28/2019), Wells Fargo (4/4/2019); New (WTI@50) Historical and Rystad Energy’s “Shale Trends Report- November 2018” 10


 
Producers in the Basin Remain Bullish on Permian Growth, Strength & Resiliency “I think the main point on the slide is the fact that we've “The Permian continues to dominate global activity had 6% increase from fourth quarter, and the fact we're and represents the most economic source of supply the top end on both oil and BOEs from the Permian.” growth in the world.” “In total, we brought on 71 wells in Q1. Going into Q2, it is “We exceeded the high-end of our production worth noting we will continue to bring on more larger pads guidance with strong oil volumes.” and so all in all, for the Permian team, another solid quarter of execution.” “We've raised our annual production growth “Encouraging results from our third Stackberry test in outlook to account for the outperformance in 1Q.” Central Martin County. Here we have five wells drilled and completed as one project. The wells on this pad are currently outperforming previously drilled wells in the same area by about 24%. “First quarter unconventional production in the Permian was 391,000 barrels per day, in line with "Growth in the Permian during the quarter supported a our guidance and up 55%.” 5% year-over-year increase in liquids volumes." “The Permian we outlined is on its way to 900,000 barrels a day, our share and it doesn’t stop when we “We also remain on track with plans to increase get to that number. production in the Permian Basin to 1 million oil Source: Earnings Call Transcripts (May 2019) equivalent barrels per day by 2024.” 11


 
The Permian’s Track Record, Along With Its Projected Growth, is Driving Midstream Growth Opportunities, In the Basin and Beyond With a track record like the Permian’s, it’s no surprise the Basin is the genesis for the majority of, as well as the strongest, growth opportunities for midstream MLPs NuStar’s focus is on two out of three major Permian growth areas that fit our capital program requirements and strategic plan: Intra-basin opportunities • Gathering, storing and transporting Permian barrels to regional hubs We also plan to connect our Long-haul opportunities assets to the long- haul pipelines: • Transporting Permian barrels to larger market hubs with new-build lines and expansions • in Midland AND • In South Texas Export opportunities • Exporting shale play barrels from Gulf Coast export facilities Beyond these major opportunity areas, the Permian’s growth has also created some significant “spillover” opportunities for NuStar 12


 
INTRA-BASIN OPPORTUNITIES : Our Permian Crude System Continues to Outpace the Permian Basin and Prove Itself “Core of the Core” LOCATION: System Throughput Growth is Outpacing the Permian Basin ”CORE OF THE CORE” 5 of the 6 most active counties 220% 194% 200% 180% ASSETS: 160% Storage: Pipeline: 140% 1,000,000 BBLs 870 Miles 120% 100% 78% AMI: Dedicated Acreage: System Capacity: 80% 5,000,000 Acres 500,000 Acres 560,000 BPD 60% 40% Cumulative Monthly Growth (%) CUSTOMERS: 20% 0% ~ 50% ~ 70% LARGE, PUBLICLY PURE-PLAY NS Growth Permian Growth TRADED PERMIAN PLAYERS * See slide 39 for detailed map of the system Source: EIA Drilling Productivity Report 13


 
INTRA-BASIN OPPORTUNITIES: Our Permian System’s Receipts and EBITDA Are Growing Rapidly We expect to achieve throughput of 450MBPD by year-end 2019 $30 400 NuStar’s Permian 314 327 349 350 $25 Crude System Performance (by Quarter) 266 300 $20 250 211 $15 187 200 159 $27 $27 139 $23 150 $10 $19 $14 100 $12 $5 $12 $7 50 $0 0 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 EBITDA ($MM) System Receipts (MBPD) 1 - Please see Appendix for reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures 14


 
EXPORT OPPORTUNITIES: Long-Haul Pipelines Will Bring an Additional 2.1MMBPD Capacity to Corpus Christi… For now, Gulf Coast export Permian Crude Takeaway vs. Production facilities, like Permian Basin (thousand barrels per day) producers and shippers, 7,000 remain constrained by the 6,000 limits of long-haul capacity EPD NGL Conversion Permian Gulf Coast to the Coast During the second half of 5,000 Gray Oak 2019, as new long-haul EPIC 4,000 pipelines commence Cactus II interim service and ramp up 3,000 to full service, producers will be able to increase their 2,000 production Existing Capacity By year-end 2022, Permian 1,000 production is projected to be up to 5.5MMbpd 0 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Source: Rystad Energy C O N F I D E N T I A L 15


 
EXPORT OPPORTUNITIES: By Mid 2020, the Port of Corpus Christi is Expected to Become the Largest U.S. Crude Export Hub Regional refiners’ consumption has U.S. Gulf Coast Oil Exports by Hub (MMBPD) topped out, which means that a 7.0 significant proportion of the volumes Corpus Christi to be transported on an additional exports are expected 6.1 6.0 5.8 to grow from 5.7 5.8 5.7 2.1MMbpd of new long-haul 5.7 5.6 0.5MMbpd to 5.4 5.5 pipeline capacity from the Permian 2.0MMbpd by YE 5.1 5.1 5.1 5.0 to the Corpus area coming in-service 2020 4.6 during 2H 2019 will be moved out 4.1 4.0 4.0 3.9 over Corpus dock facilities 3.6 Corpus Christi, historically a regional 3.1 refinery and domestic marine 3.0 2.8 2.9 2.5 delivery hub, will evolve into a major 2.0 crude oil export hub 2.0 1.9 1.5  In 2018, Corpus Christi represented 21% of the total 712MMbbls Gulf 1.0 Coast exports  By year-end 2022, exports from Corpus 0.0 are projected to grow to 2.6MMbpd of the Gulf Coast’s total 5.3MMbpd Corpus Christi Houston Nederland Louisiana Source: EIA, Rystad Energy, IEA 16


 
EXPORT OPPORTUNITIES : NuStar’s Corpus Christi North Beach (CCNB) Facility has the Capacity to Handle the Leading Edge of the Impending Wave of Permian Long-haul Barrels 100 Series NuStar’s CCNB Export Facility 1.0MMbbl 400 Series 200 Series 1.7MMbbl 0.6MMbbl +0.4MMbbl Remaining Footprint +0.6MMbbl Under Construction Dock 15 Dock 1 Dock 16 Dock 2 (Light-loaded (Light-loaded (Pana) Inland Barge Suez) Suez) In-bound Capacity Storage Capacity Out-bound Capacity Current total: 480Mbpd Current total: 3.3MMbbl Current total: 1.1MMbpd • STCS 16-inch Pipeline- 240Mbpd • Plus (under construction)- • Ship docks- 750Mbpd to • Harvest 16-inch Pipeline - 0.6MMbbl 1.0MMbpd 240Mbpd • Potential 0.4MMbbl • Refinery pipeline- 100Mbpd 1717


 
EXPORT OPPORTUNITIES : ...And Our Project for Trafigura Utilizes Our Existing Assets While Expanding Our Ability to Meet Growing Export Demand Trafigura’s four-year commitment to transport and store WTI on our South Texas System and our CCNB facility will support near- and longer-term projects:  Starting as soon as summer 2019, we are connecting PAA’s Cactus II pipeline to our South Texas system to transport WTI on our 16” existing pipeline from Taft to our CCNB facility  Construction, scheduled for in-service by year-end 2019:  A new 30” pipeline from Taft to our CCNB facility – 3Q19  600Mbbls of storage at CCNB, bringing our capacity at the facility to 3.9MMbbls (of which Trafigura will lease 1.6MMbbls) – 4Q19 We expect project spending to total approximately $110MM generating a multiple in the 2– 4X range We are in discussions to connect to other long-haul pipeline projects and with parties for additional commitments We are exploring connections to projects for crude oil export facilities with VLCC-loading capabilities 1818


 
EXPORT OPPORTUNITIES : Our Connection Facility in Taft Will Establish Our Footprint in Taft, Texas, the Emerging South Texas Crude Oil Hub The Permian long-haul pipeline 2MMbpd Taft projects were developed to from the maximize shippers’ destination Permian ~15 miles to Ingleside optionality, and Taft, Texas Harbor offers both geographic ~6+ miles to Island flexibility and less expensive Inner Harbor Ingleside real estate  Taft’s location offers a Corpus Christi jumping off point for connections on either side of the Corpus Christi Ship Channel (Ingleside or the Inner Harbor) As the point of convergence for all three of the Permian-to-Corpus Christi long-haul pipelines and with developing access to multiple marine and refinery outlets, Taft is poised to become the major crude oil market hub in South Texas Our connection to Cactus II in Taft not only enables our services for Trafigura; it also positions NuStar to build on our early entry into this developing hub We believe there will be ample volumes to support an expansion of our initial Taft footprint 19


 
“SPILLOVER” OPPORTUNITIES: Beyond Its Role in Our Corpus Export Project, Our South Texas Crude System Benefits Not Only From the Inland WTI Price Differentials, But the System’s Contracted Eagle Ford T&D Volumes Differentials widened last year on market concerns that the basin’s 2019 production trajectory would drive a near-term shortfall in long-haul takeaway capacity  As shippers look to find ways to benefit from the price dislocation, we have seen volume increases from this dislocation  Again in May, our system will benefit from incremental barrels trucked from the Permian We now have T&D contracts for ~116MBPD on a system with 240MBPD capacity  Last year, we renewed commitments for ~50MBPD with customers on our South Texas System  While Eagle Ford growth is projected to continue to lag, we are making progress in increasing our market share by leveraging our system’s flexibility and reach, our optionality and reputation for great service 20


 
“SPILLOVER” OPPORTUNITIES : We Are Supplying Permian Barrels to the Ardmore and McKee Refineries from Plains’ Sunrise II Pipeline We provide our customer with optionality to supply the Ardmore and McKee refineries with Permian barrels from Plains’ Sunrise II expansion  Service to Ardmore – Expect ~85MBPD (similar volumes with higher tariff)  Service to McKee – Expect ~110MBPD (similar volumes and tariff) We entered into an agreement with a customer to construct an additional connection to our Wichita Falls terminal to support increased volumes and move Permian barrels to both Ardmore and McKee refineries and third- party pipelines We have signed a long-term commitment to ship barrels between Wichita Falls, TX and Permian Long-Haul Optionality Hewitt, OK to support deliveries to a Cushing Short-Haul Optionality third-party pipeline  New service to Hewitt – Expect 55-65MBPD starting this month (incremental volume and tariff)  The projects help us serve our customers’ needs and benefit from longer-haul tariff and incremental barrels 21


 
“SPILLOVER” plus EXPORT OPPORTUNITIES: Our St. James Terminal is a World-class Terminal Located in the Heart of the St. James Hub NuStar’s St. James facility has the capacity to handle the changing crude flows in the region with:  9.9MMbbls of segregated crude storage capacity on over 900 acres (Expandable to ~15.0MMbbls)  Three docks with a combined 32Mbbls per hour loading capacity (Expandable to 60Mbbls per hour with limited capital spend)  Terminal along the Mississippi River with access to crude supply from Gulf of Mexico, Eagle Ford, Permian and other domestic shale plays Dock 5 (Light-Loaded Suezmax) Dock 2 (Aframax) Manifest and Dock 1 Unit Train Rail (Inland Barge) Facilities In-bound Capacity Storage Capacity Out-bound Capacity Current total: 4.5MMBPD Current total: 9.9MMbbls Current total: 3.6MMBPD • Bayou Bridge 24” Pipeline- 456MBPD • LOCAP 30”Pipeline (3Q19 connection to • Ship Shoal 20” Pipeline- 360MBPD Maurepas Pipeline)- 380MBPD • Zydeco 18” Pipeline- 360MBPD • XOM Baton Rouge 24” Pipeline- 350MBPD • Bonefish 16” Pipeline- 108MBPD • XOM 16” North Line Pipeline - 150MBPD • LOCAP 48” Pipeline- 2.0MMBPD • Capline 40” Pipeline (Reversal planned: 2H • 20-Car Manifest Rail- 10MBPD 2022)- 1.2MMBPD • 120-Car Unit Train- North- 60MBPD & 120MBPD • MRO Garyville 30” Pipeline- 530MBPD • 2 Truck LACTs- 20MBPD • Ship docks- 750MBPD to 1.0MMBPD • Ship docks- 750MBPD to 1.0MMBPD 22


 
ST. JAMES’ EMERGING OPPORTUNITIES: Dramatic Changes in Crude Flows From Shale Production are Driving Additional Crude to St. James Rapid growth in U.S. shale production has allowed refiners to replace much of crude imports with domestic crude This shifting crude demand has changed crude flows in the region, but St. James continues to play a central role in crude distribution and storage for the region and the world  Regional refiners still require heavy sour crude to balance their slate, which will require imports either over water or from Canada  As production of light barrels from the Permian and other domestic play exceeds Gulf Coast refiners’ appetites, those barrels will be exported to Europe and Asia A number of key projects to bring crude to, or facilitate export from, St. James have emerged to address changing supply and demand:  LOOP exports  Bayou Bridge  Swordfish  Seahorse  ACE  Capline reversal Source: RBN C O N F I D E N T I A L 2323


 
ST. JAMES’ EMERGING OPPORTUNITIES: St. James is Benefiting From Price Dislocations Now and is Positioned to Participate in Export Growth in the Future We have executed contracts and expect 10 trains per month for unit train off-loading driven by favorable price differentials of WTI, WCS and Bakken  Dislocations may continue through 2020, due to the delay of Enbridge Line 3 replacement until 2H20 We are also working to facilitate exports of barrels delivered via our existing and planned pipeline connections as long-haul pipelines debottleneck shale plays and new pipes debottleneck the broader system  As soon as 3Q20, Capline’s reversal is likely to bring large volumes of Permian, heavy Canadian and Bakken crude for use in regional refineries and export to other locations  Bayou Bridge began bringing Permian light barrels to St. James in late March, and the line may also bring Bakken and Canadian, either for export or local use 24


 
OptimizingThe Permian Basin: OurPhenomenal Legacy Growth Assets Driving Midstream Opportunities


 
We Are Also Optimizing Our Mature Systems to Profit From Evolving Market Demand We continue to identify ‘micro-dislocations’ on our mature systems, and augment underutilized assets with projects and bolt-on acquisitions West Coast Biofuel: Estimated Investment: ~$70.0MM Central East – Multiple: 5-7X Council Bluffs: 2018 Investment: $38.0MM Northern Mexico Multiple: 4-6X Supply: Estimated Investment: ~$190MM Multiple: 6-8X 26


 
Mexico’s Refined Product Demand is Expected to Continue to Exceed Its Infrastructure’s Capacity Mexico refineries currently operate around 30% of nameplate capacity due to weak returns and historical under-investment With limited domestic supply, Mexico’s gasoline and diesel supply imbalance has grown from 520MBPD in 2015 to 865MBPD projected in 2019, further opening the doors for imports Source: RBN Energy (1/15/2019), ESAI (4/2019), OECD 27


 
Our Projects to Facilitate Export of Refined Products to Supply Northern Mexico Are Progressing on Schedule We developed projects to fulfill Northern Mexico that growing demand and Supply: Estimated expand use of underutilized Investment: assets in South Texas ~$190MM We are executing on two Multiple: 6-8X projects:  Nuevo Laredo Project for Valero  Early ULSD service scheduled to start in the summer  Odem pipeline, Dos Laredos pipeline and Nuevo Laredo terminal expansion should be completed by February 2020  Valley Pipeline Expansion for major customer  Receiving facility in Matamoros is expected to be in service later this year  NuStar’s project is on schedule and BROWNSVILLE / expected to be in service in Q3 2019 MATAMOROS 28


 
The West Coast’s Aggressive Carbon Emissions Reduction Goals Have Catalyzed Market Dislocations That Our West Coast Assets Are Well-Positioned to Address Regulatory priorities on the West Coast are dramatically West Coast increasing demand for biofuels, which require import Biofuel: and storage, and are likely to drive exports of petroleum Estimated Tacoma diesel in the future Investment: Vancouver At the same time, obtaining permits for greenfield ~$70.0MM project in the region is difficult, which increases the Portland value of existing assets Multiple: 5-7X Our terminal facilities have the access to rail, marine and truck-loading facilities necessary to receive biofuels Projects coming from outside the region and to provide a base for into service from Stockton distribution of biofuel products across the West Coast 2019-2021 region Transportation Fuel Supply With LCFS Compliance From Petroleum Diesel Alternatives Selby 250 1020 International NV and AZ Exports 1000 Exports 200 BPD Pittsburg 980 150 960 940 100 920 900 50 Wilmington 880 0 860 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 islVlm,Tosn BPD Volume, Thousand Diesel Gasoline Volume, Volume, Thousand Gasoline Fossil Diesel Biomass-Based + Renewable Diesel CaRFG Source: IHS Markit © 2018 IHS Markit 29


 
We Have Worked With Key Customers to Develop Low-Capital Renewable Fuels Storage Projects at Several of Our West Coast Facilities to Meet Regional LCFS Mandates Together, these projects comprise a renewable diesel/biodiesel distribution system that allows us to capture market share, build important customer relationships with key global producers and achieve higher storage rates than are attainable for non-LCFS products 2019 2020 2021 Convert three tanks, 68,000 shell barrels, from fuel oil to ULSD and biodiesel service Portland Convert 7,000 shell barrels to renewable diesel service and 25,000 shell barrels to ULSD services Construct new truck-loading bay to accommodate additional Selby renewable diesel loading requirements Convert 30,000 shell barrels to biodiesel service Convert 28,000 shell barrels to renewable diesel service and increase renewable diesel-capable rail sports from five to 15 Stockton Convert 151,000 shell barrels to renewable diesel service Provide pipeline connections to ethanol rail loading facility to receive 180-car unit trains Convert 80,000 shell barrels from fuel oil to renewable diesel storage Wilmington and reconfigure dock for enhanced marine capability 30


 
We Have Increased EBITDA and Market Share For Our Central East- Refined Products System With Targeted, Low-Capital Projects In the past six years, we have been able to increase the system’s EBITDA by over 60%, with limited capital spending Central East – We offer both significant pipeline Council Bluffs: connectivity and excellent customer 2018 service Investment:  The pipeline system and 22 supporting $38.0MM terminals serve multiple refining/co-op Multiple: 4-6X customers in PADD II Through our Council Bluffs acquisition last year, we have expanded our footprint, which has allowed us to expand our leased storage and our menu of proprietary additive and blending services We plan to continue to broaden our services to meet our customers’ needs and compete in the market with bio-diesel service, rail receipt and loading optionality 31


 
In the 2H 2019 and Early 2020, We Could Benefit From Additional Segregations at Certain Locations While the full implications remain to be seen, IMO 2020 may present storage opportunities, through additional segregations, that we have not forecasted These restrictions may drive higher European demand for light, sweet crude, which should benefit our Permian producers and our Corpus Christi export strategy NuStar has strategically located storage assets in the Gulf Coast, East Coast and the Caribbean, some of which may have capacity available in the late 2019 and 2020 to capture IMO 2020-driven demand NuStar Fuel Oil Storage Capacity 32


 
Good Corporate Citizenship has Always Been the Foundation of NuStar’s Culture of Excellence, and We Remain Committed to Responsible Stewardship Safe and responsible operations : Our statistics reflect our commitment  In 2018, we had an annual lost-time injury rate (LTIR) that was substantially lower than our peers  36 times better than the Bureau of Labor Statistics (BLS) comparison data for the Bulk Terminals Industry  16 times better than the BLS data for the Pipeline Transportation Industry We strive for continuous improvement in the safety and efficiency of our operations, and one important way we do that is through the OSHA Voluntary Protection Program (VPP) Star Status  Achieving VPP Star Status requires rigorous OSHA review and audit, and Star Status requires renewal every three years  80% of our U.S. terminals are VPP-certified Commitment to our communities, across our locations: NuStar employees contributed 90,000 volunteer hours in 2018 alone  NuStar has local Volunteer councils in the communities where the company has operations  These councils contribute to charitable and civic causes unique to that local community 100% of our U.S. employees contribute to our United Way campaign, and our average per capita contribution is the highest in corporate America  In total, NuStar contributed $3 million in 2018 33


 
Continued Improvement: ContinuedOur 2019 Plan Improvement: Our 2019 Plan


 
Our Work in 2018 Positioned NuStar For Growth; in 2019, We Are Focused on Discipline, Execution and Continued Improvement We are carefully managing our capital spending to ensure we maintain our financial strength and further lower our leverage and continue to grow our EBITDA with high-return projects Post-2019, we expect to return to our historical annual spend rate $431 2000 $1,789 1800 Strategic Capital Spending 2019 project spending: 2012-2019E . Permian System 1600 (~$185MM) 1400 . N. Mexico Supply . (~$150MM) 1200 . CCNB Exports . (~$100MM) 1000 $1,462 $690 800 $418 600 $431 $316 $262 $38 400 $143 $500-550 200 $96 $374 $302 $328 $288 $327 $380 $166 0 2012 2013 2014 2015 2016 2017 2018 2019E Internal Growth Acquisitions C O N F I D E N T I A L 35


 
By Selling Our St. Eustatius Facility, We Will Focus All Our Resources on Lowering Our Debt Metrics and Our High-Return Growth Projects in North America Since January, when the U.S. imposed PDVSA-specific sanctions, it has become increasingly clear that our St. Eustatius facility requires a new business model to ensure its long-term success  We determined in recent months that our best path forward is to sell the terminal to a buyer that is well- positioned to take advantage of the changing global crude trade flow patterns  We entered into a Purchase and Sale Agreement to sell the facility to GTI Statia Holdings, N.V., affiliated with Prostar Capital, for approximately $250 million, subject to adjustments  We expect to use proceeds from the sale to pay down our revolver balance The sale will improve our metrics and help fund our growth projects for our core business in North America to generate stable, consistent growth for our unitholders We expect to close this transaction by the end of the second quarter 36


 
This Sale is an Important Step in our Successful Implementation of our 2019 Plan to Ensure Strong, Stable Growth in the Future Strong Coverage Low Leverage Maximum Self-Funding Simplified Structure No IDRs Disciplined Project Management Quality Assets Safe, Efficient Operations 37


 
Appendix


 
Our Permian Crude System is “Core of the Core” PAA SUNRISE II (3Q-2019) NS COLORADO PAA BASIN CITY TERMINAL BRIDGETEX, SUNOCO PE & WTG TRUCK LOADING CENTURION DELEK BIG SPRING PIPELINE REFINERY 3rd Party Connections EPD CENTURION NuStar Truck Unloading Facilities SCR STATION SUNPET NuStar Terminals PAA and GRAY OAK (TBD) EPIC (3Q-2019) SUNOCO MIDKIFF 39


 
We Have No Significant Debt Maturities Until Late 2020 Debt Maturities $1,500 (As of 3/31/2019)1 $1,371 ($MM) Receivables Financing1 $1,250 Sub Notes $450 GO Zone Financing $1,000 Senior Unsecured Notes Revolver $750 $500 $921 $52 $250 $550 $365 $403 $300 $250 $0 2019 2020 2021 2022 2027 2038-2041 2043 We repaid our $350MM 7.65% senior unsecured notes that matured in April 2018 with our revolver We applied the $270MM of proceeds from our sale of the European assets in the fourth quarter of 2018 to our revolver balance, which allowed us to reduce leverage and redeploy capital to invest in low-multiple projects 1 - Receivables Financing maturity was extended to September 2021 on April 29, 2019 40


 
Capital Structure as of March 31, 2019 ($ in Millions) $1.4B Credit Facility $921 Series D Preferred Units $568 NuStar Logistics Notes (4.75%) 250 Series A, B and C Preferred Units $756 NuStar Logistics Notes (4.80%) 450 Common Equity and AOCI 1,133 1 NuStar Logistics Notes (5.625%) 550 Total Equity 2,457 NuStar Logistics Notes (6.75%) 300 Total Capitalization $5,800 NuStar Logistics Sub Notes 403 GO Zone Bonds 365 Receivables Financing 52 Finance Lease Liability 59 Short-term Debt & Other (7) Total Debt $3,343 As of March 31, 2019:  Credit facility availability ~$475MM  Debt-to-EBITDA ratio2 4.1x 1 - Total Equity includes Partners’ Equity and Mezzanine Equity 2 - Please see Appendix for reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures 41


 
Reconciliation of Non-GAAP Financial Information 42


 
Reconciliation of Non-GAAP Financial Information (continued) 43


 
Reconciliation of Non-GAAP Financial Information (continued) 44