# Delek Logistics Partners, LP

> Clarifo company profile — qualitative business description generated from
> the company's filings. Financial statements, charts and ratios are
> available on Clarifo (https://www.clarifo.com/fi/companies/Delek Logistics Partners, LP).

## Overview

Delek Logistics Partners, LP owns and operates crude oil, refined products, natural gas gathering and processing, storage, terminalling, and water-handling assets concentrated in the Permian Basin and Gulf Coast. The partnership also holds interests in pipeline joint ventures and provides transportation and logistics services that are closely tied to Delek Holdings' refining and marketing operations, while increasingly adding third-party cash flows.

## Products & services

• Crude oil gathering, pipeline transportation and storage
• Refined products terminalling and wholesale marketing
• Natural gas gathering, processing, treating and acid gas injection
• Water disposal and recycling services
• Pipeline joint venture interests and ancillary logistics assets

- **Gathering and Processing** (35%) — Crude oil and natural gas gathering, processing, treating, and related midstream infrastructure in the Permian Basin.
- **Wholesale Marketing and Terminalling** (25%) — Wholesale product marketing, terminal storage, rack services, and refined products handling for Delek-related and third-party volumes.
- **Storage and Transportation** (20%) — Pipeline transportation, storage, and logistics assets that move crude oil and refined products between key hubs and refineries.
- **Water Services** (10%) — Produced-water disposal, recycling, and associated infrastructure supporting Midland and Delaware Basin operations.
- **Pipeline Joint Ventures** (10%) — Equity-method interests in crude oil pipeline systems and related ancillary assets serving strategic basin connections.

- Crude oil gathering, pipeline transportation and storage
- Refined products terminalling and wholesale marketing
- Natural gas gathering, processing, treating and acid gas injection
- Water disposal and recycling services
- Pipeline joint venture interests and ancillary logistics assets

## Customers

The partnership serves Delek Holdings as a primary customer across several assets, including refinery support pipelines, terminals, and marketing arrangements. It also serves third-party crude oil, refined products, and natural gas customers in the Permian Basin and Gulf Coast, with growing emphasis on expanding outside the sponsor relationship. Customer demand is driven by production volumes, refinery throughput, and the need for connected logistics, storage, and water-handling capacity.

- **Delek Holdings and affiliates** (primary) — Buys pipeline, terminalling, marketing, and logistics services to support Tyler, El Dorado, and Big Spring refining operations.
- **Third-party crude oil producers and shippers** (primary) — Use gathering and transportation assets in the Permian Basin to move crude to market and key exchange points.
- **Refined products marketers and distributors** (secondary) — Use storage, terminalling, and wholesale marketing services for intermediate and refined product handling.
- **Natural gas producers** (secondary) — Buy gathering, processing, treating, and acid gas injection services to support Delaware Basin production.
- **Water disposal and recycling customers** (emerging) — Use produced-water infrastructure in the Midland Basin for disposal and recycling tied to oilfield activity.

- Delek Holdings refineries and marketing operations are the anchor customer base
- Third-party crude oil shippers use pipeline and gathering systems
- Refined products customers use terminals, storage, and rack services
- Natural gas producers buy gathering, processing, and treating capacity
- Water-handling customers need disposal and recycling tied to basin activity

## Geography

Operations are concentrated in the Permian Basin, including the Delaware and Midland sub-basins, and in select Gulf Coast locations. The asset base also connects to Cushing, Midland, Wink, Webster, and refinery-linked corridors in Texas and Arkansas, making regional production and refinery activity central to utilization and cash flow. This geographic concentration creates strong basin connectivity but also ties results to activity levels in a few core markets.

- **Permian Basin** (55%) — Primary operating region, including Delaware and Midland sub-basins.
- **Gulf Coast region** (25%) — Terminals, pipeline connections, and refinery-linked logistics assets.
- **Other U.S. regions** (20%) — Includes Arkansas and other connected logistics and terminal assets.

- Permian Basin is the core operating region for gathering and processing
- Midland and Delaware basins support crude, gas, and water growth projects
- Gulf Coast assets include terminals and pipeline connections
- Texas and Arkansas refinery-linked assets support Delek Holdings operations
- Key hubs include Cushing, Midland, Wink, and Webster connections

## Strategy

Management is focused on growing cash flow, expanding the asset base through organic projects and bolt-on acquisitions, and improving distribution coverage while maintaining leverage discipline. A second strategic objective is to increase third-party cash flow and economic separation from Delek Holdings, reducing reliance on sponsor volumes over time. The company is also investing in a broader sour-gas and water solution set to deepen its Permian Basin franchise.

- **Expand Permian Basin organic growth projects** (short-term) — New gas processing, sour gas, and water infrastructure can increase throughput and deepen customer relationships.
- **Pursue accretive bolt-on acquisitions** (short-term) — Acquisitions can add free cash flow, EBITDA, and scale without requiring large greenfield projects.
- **Increase third-party cash flow mix** (medium-term) — Diversification away from Delek Holdings lowers sponsor concentration risk and supports deconsolidation goals.
- **Lower carbon footprint and improve ESG profile** (medium-term) — ESG-conscious infrastructure can support permitting, customer acceptance, and long-term asset relevance.

- Grow cash flow through Libby plant and other basin expansions
- Add sour gas processing and acid gas injection capabilities
- Pursue bolt-on acquisitions that are accretive to cash flow and leverage
- Expand combined crude and water offerings in the Midland Basin
- Increase third-party volumes and reduce dependence on Delek Holdings

## Risks

The largest company-specific risk is customer concentration, especially dependence on Delek Holdings and its assignees for volumes, contract renewals, and payment performance. The business is also exposed to commodity-cycle and basin-activity risk because throughput, terminal volumes, and water services depend on crude oil and natural gas production in the Permian and Gulf Coast. Like other midstream operators, it faces operational, cyber, regulatory, financing, and asset-impairment risks that can affect cash flow and distributions.

- **Customer concentration with Delek Holdings** [high] — A large share of assets and contracts support sponsor refineries and related logistics, so sponsor decisions directly affect volumes and renewals.
- **Counterparty credit and nonperformance** [high] — Nonpayment or default by key customers could reduce cash flow and impair the ability to service debt and pay distributions.
- **Commodity and basin activity volatility** [medium] — Volumes and margins depend on crude oil, refined product, and natural gas supply/demand in served markets.
- **Operational and cyber disruption** [medium] — Pipeline, terminal, refinery, or IT interruptions can reduce throughput and increase repair or downtime costs.
- **Asset impairment and strategic option uncertainty** [medium] — Long-lived assets and goodwill depend on throughput, tariff, and cost assumptions that may not be realized.

- Heavy reliance on Delek Holdings creates concentration and renewal risk
- Customer nonpayment or underperformance can reduce cash flow and distributions
- Throughput depends on crude, refined product, and gas production volumes
- Operational outages, cyberattacks, and refinery disruptions can interrupt service
- Debt covenants and capital access can constrain growth and distributions

## Accounting

Revenue and EBITDA are sensitive to throughput volumes, contract structure, and the timing of lease-related and intermediation arrangements, so classification changes can shift amounts between revenue and interest income. The company also has equity-method investments in pipeline joint ventures, making JV earnings and valuation assumptions important to reported results. Long-lived asset and goodwill impairment testing is a key judgment area because future cash flows depend on tariff rates, throughput, and operating cost assumptions.

- **Sales-type lease accounting** — Revenue trend and margin analysis
- **Equity-method investments in pipeline joint ventures** — Segment EBITDA and net income
- **Long-lived asset and goodwill impairment** — Potential non-cash impairment charges
- **Contract and intermediation arrangements with Delek Holdings** — Revenue recognition and comparability

- Sales-type lease accounting can shift fees from revenue to interest income
- Equity-method JV earnings affect segment EBITDA and net income
- Impairment testing depends on throughput, tariff, and cost assumptions
- Contract terms with Delek Holdings affect revenue timing and classification
- Capitalized maintenance and growth projects affect depreciation and asset base

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*Last updated: 2026-04-28T20:01:40.210339+00:00*