Delek Logistics Partners LP (DKL)

History and Background

Delek Logistics Partners LP (DKL) was formed in 2012 by Delek US Holdings, Inc. to own, operate, acquire and construct crude oil and refined products logistics and marketing assets. It has grown through acquisitions and organic projects.

Core Business Areas

• Transportation: Transports crude oil and refined products through pipelines and trucking.
• Storage: Provides storage services for crude oil, intermediate products, and refined products.
• Wholesale Marketing and Terminalling: Markets refined products to wholesale customers and operates terminals for distribution.

Leadership and Structure

Avigal Soreq serves as the Chief Executive Officer. The company operates as a master limited partnership (MLP).

Key Offerings

• Crude Oil Transportation: Transports crude oil via pipelines and trucks, generating revenue based on volumes and tariffs. Competitors include Plains All American Pipeline (PAA) and Enterprise Products Partners (EPD). Market share is difficult to pinpoint precisely, as it varies by region and pipeline route, but DKL primarily services Delek U.S. Holdings' refineries.
• Refined Products Transportation: Transports gasoline, diesel, and jet fuel via pipelines and trucks. Competitors include Magellan Midstream Partners (MMP) and MPLX (MPLX). Market share data is fragmented by region. DKL's focus is serving the distribution needs of Delek U.S. Holdings.
• Storage Services: Provides storage capacity for crude oil and refined products at terminals. Competitors include Buckeye Partners (BPL) and NuStar Energy (NS). Market share is specific to geographical location of terminals.

Industry Overview

The midstream energy sector is characterized by transportation, storage, and processing of crude oil, natural gas, and refined products. Demand is influenced by overall energy consumption and production levels. MLPs are common structures.

Positioning

Delek Logistics Partners LP primarily supports Delek U.S. Holdings, providing integrated logistics solutions. Its competitive advantage lies in its relationship with Delek U.S. Holdings and strategic locations. It also leverages its focus on the mid-continent refining and logistics landscape.

Total Addressable Market (TAM)

The global oil and gas logistics market is projected to reach hundreds of billions of dollars. DKL is focused on a smaller regional footprint and dedicated to supporting Delek U.S. Holdings, thus capturing a niche portion of the total market.

Key Competitors

• EPD
• MPLX
• PAA

Competitive Landscape

Delek Logistics Partners LP competes with larger, more diversified midstream companies. Its advantage lies in its integrated relationship with Delek U.S. Holdings and regional focus. Focus on the mid-continent landscape.

3Bear Delaware Holding - NM, LLC

• Year: 2022
• Acquisition Price (USD millions): 624.7
• Strategic Rationale: Expanded crude oil gathering and processing capabilities in the Delaware Basin.

Historical Growth: Delek Logistics Partners LP's growth has been driven by acquisitions and organic projects, especially ones that benefit its parent.

Future Projections: Analyst estimates for future revenue and earnings growth will be provided based on factors such as increased throughput, expansion projects and demand for transportation services. Analyst growth is expecting a 5% annual growth.

Recent Initiatives: Recent initiatives include expansion of pipeline capacity and strategic acquisitions of terminals or logistics assets.

Delek Logistics Partners LP is a midstream energy company closely tied to Delek U.S. Holdings, benefiting from stable fee-based revenue. Its strategic assets and relationships provide a competitive advantage. The company faces challenges related to customer concentration and competition. Future growth depends on expanding services and optimizing existing assets. The recent acquisition will help with future growth.

Data Sources:

• Company filings (10-K, 10-Q), Investor presentations, Press releases, Analyst reports

Disclaimers:

This analysis is for informational purposes only and should not be considered financial advice. Market conditions and company performance can change rapidly. Consult with a qualified financial advisor before making any investment decisions.