Seeking Alpha

Barclays sees the growth in crude oil rail transport as a “slight positive” for...

Barclays sees the growth in crude oil rail transport as a “slight positive” for MLPs, as it provides terminal investment opportunities and potential synergies partially offset by increasing competition. The financial impact of rail on MLPs is still relatively modest, the firm says, as pipelines remain the dominant mode of U.S. crude transportation due to cost and safety advantages relative to rail, barge and truck.
Comments (3)
  • Brucejfern
    , contributor
    Comments (1419) | Send Message
     
    Slight positive? Read Credit Suisse's report issued immediately after PAA bought 5 strategically located railroad asset groupings for their logistics business. That deal was one of the biggest if not biggest level of accretion associated with a $500M deal of anything in the MLP space that I have ever seen.
    10 Apr 2013, 05:41 PM Reply Like
  • barryray
    , contributor
    Comments (18) | Send Message
     
    Analysts dont know diddley about mlps or American energy infrastructure.Their opinions are almost worthless.X-tex is well positioned to take advantage of oil and gas flow to La. and Tx gulf coast.They are heavily invested. The pay-off will begin 3rd qtr this year.
    10 Apr 2013, 08:58 PM Reply Like
  • steveh8000
    , contributor
    Comments (164) | Send Message
     
    Rail and Trucks have one advantage for several more years, they can load at any location when the pipeline is not available yet, and are a backup for times when the pipeline is down for repair, or a refinery goes off line where your oil was headed for processing.

     

    Make no mistake, the rail and truck transport are building more and more under backlog orders to handle the future loads. This is a strategic move as a safety valve to insure oil flow to refinery's just in case some nutcase decides to blow a few holes in major pipeline transport hubs. You always need to hedge your risk for alternative delivery. Hopefully the buttheads in the government will approve oil exports to world markets soon.
    FYI....consider Kansas City Southern Railway as they own the tracks U.S. into Mexico, operating with the National Mexican rail authority for any developments in that country that may use rail car transport for oil. A small piece of the puzzle.
    12 Apr 2013, 05:11 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector