Delek Logistics: Expanding Horizons in the Water Segment
Delek Logistics, a leading player in the midstream energy sector, is making strategic moves to diversify its customer base and revenue streams. One of the key areas of focus is the water segment, which is expected to contribute significantly to the company’s growth.
Growth Driven by Strategic Acquisitions
The recent acquisitions in the water segment have played a pivotal role in Delek Logistics’ growth strategy. These acquisitions have not only expanded the company’s footprint but also brought new customers and revenue streams. The acquisitions include the purchase of WaterBridge Resources and WaterBridge Energy Partners, which have a combined water handling capacity of over 1 million barrels per day.
Expected 20% Growth in Adjusted EBITDA
The acquisitions, coupled with the new gas facility, are expected to drive a 20% growth in Delek Logistics’ Adjusted EBITDA. The new gas facility, located in Louisiana, will have an initial capacity of 200 million cubic feet per day and is expected to commence operations in the fourth quarter of 2023.
Sustainable Cash Distributions
The company’s cash distributions have been on an upward trend, and the recent acquisitions are expected to translate into higher income. This income is sustainable as the water segment is a crucial component of the midstream energy sector, and the demand for water handling services is expected to continue growing due to the increasing focus on water management in the oil and gas industry.
Impact on Consumers
The expansion of Delek Logistics into the water segment is expected to have a positive impact on consumers. With the increasing focus on water management in the oil and gas industry, there is a growing need for water handling services. Delek Logistics’ acquisitions and new facility will help meet this demand, ensuring a reliable and efficient water supply for drilling and production operations.
Global Implications
The growth of Delek Logistics in the water segment is not just significant for the company but also for the global energy industry. The demand for water handling services is expected to increase as more companies focus on water management to reduce water usage and improve operational efficiency. This trend is particularly relevant in regions with water scarcity issues, such as the Middle East and parts of Africa, where water is a precious resource.
Conclusion
In conclusion, Delek Logistics’ strategic expansion into the water segment is a smart move that is expected to drive growth, increase revenue, and provide sustainable cash distributions. The recent acquisitions and new facility will help meet the growing demand for water handling services in the oil and gas industry, benefiting both consumers and the global energy sector. As the company continues to focus on profitability and innovation, it is well-positioned to capitalize on the opportunities in the water segment and contribute to the long-term growth of the midstream energy sector.
- Delek Logistics is diversifying its customer base and revenue streams by expanding into the water segment.
- Recent acquisitions in the water segment, including WaterBridge Resources and WaterBridge Energy Partners, have expanded the company’s footprint and brought new customers and revenue streams.
- The acquisitions and a new gas facility are expected to drive a 20% growth in Adjusted EBITDA.
- Cash distributions have been on an upward trend and are expected to increase further due to the acquisitions.
- The expansion into the water segment will help meet the growing demand for water handling services in the oil and gas industry.
- The trend towards water management in the oil and gas industry is expected to continue, making water handling services a crucial component of the midstream energy sector.
