NuStar's Greehey looks to niche markets

By Janet McGurty

NEW YORK (Reuters) - Bill Greehey is looking at the bottom of the crude oil barrel to make NuStar Energy as successful in the master limited partnership universe as he made Valero Energy Corp. (VLO.N: Quote, Profile, Research, Stock Buzz) in refining.

Greehey, who took Valero, a small San Antonio-based pipeline company, and transformed it into the nation's largest independent refining company, is now the chairman of NuStar Energy LP (NSH.N: Quote, Profile, Research, Stock Buzz), a master limited partnership comprised of crude oil terminals and petroleum product pipelines and storage with a market capitalization of $4.5 billion.

"We are trying to find a niche market, kind of like we did for refining," Greehey told the Reuters Global Energy Summit in New York on Wednesday.

Greehey, the engineer of complex refineries that could process feedstocks as well as crude oil to make the most of gasoline, is looking to asphalt for NuStar's growth, seeing the parallels with the refining industry in the mid-1990s.

Asphalt, the black sticky stuff used to cover roadways, is a business that makes sense, Greehey said, especially since most of the major refiners are not that interested in it.

"No one likes asphalt," he said, adding that the supply of asphalt is slightly higher than the demand, a similar situation to the balance between demand and supply in the mid-1990's, when Valero started to build its major U.S. refining presence.

On the sales block are two East Coast asphalt refineries that Citgo, the U.S. refining and marketing arm of state oil company Petroleos de Venezuela, is looking to shed.

"We will be bidding for them," said Greehey, of the two refineries -- a 28,000 barrel per day (bpd) refinery in Savannah, Georgia, and a 51,000 bpd one in Paulsboro, New Jersey.  Continued...