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Terminal operator, asphalt refiner and bunker supplier NuStar Energy L.P. expects its fuels marketing division to break even in 2013 and post improved results in 2014, according to President and CEO, Curt Anastasio.

Speaking during a presentation at the Wells Fargo MLP Pipeline & Energy Conference, Anastasio explained that its fuels marketing division now represents less than 5 percent of the company's overall business after recently reducing its ownership position in the asphalt business.

"This is where we used to have the asphalt refining and marketing business," Anastasio said. "This has now been pushed out to a JV with a private equity firm. So what’s left in there is bunker and fuel oil marketing which we do principally in two locations, Texas City and St. Eustatius in the Caribbean. A little bit of crude trading around St. James, Louisiana and a butane blending operation in part of our products pipeline system and that’s what left in that 4% to 5% of the business in fuels marketing."

Earlier this year, the company signed a fuel oil supply agreement with an unnamed "major fuel oil trading company" in the Caribbean market. Anastasio explained: "In August of 2013, we significantly reduced the working capital in this business by entering into a back-to-back supply agreement for St. Eustatius with a storage customer who supplies the bunker operation now and that obviously helps to produce an increase in the profitability of the business. We have less carrying costs and also we’ve reduced operating expenses relating to that business, mainly in marine transportation.

"The fuels marketing currently pays the storage segment approximately $30 million in annual storage fees. So in other words one of the reasons we’re in this at all in the bunker and fuels marketing business is that it's complimentary to our storage assets and they’re able to drive from third parties enough revenue to cover -- more than cover the storage rates that’s paid to our Storage segment and on top of that they try to trade to make a profit. So as long as they can do that they’re -- it's worthwhile to stay in the business."

Commenting on the company's expectations for the fuels marketing division, Anastasio remarked: "In 2013, fuels marketing after paying the $30 million, they’re expected to be about breakeven. We do see in the bunker business not just those, but everybody globally in the business weaker demand than you’ve seen in recent years and increased competition mainly because the margins were so good the previous two years. And the results for fuels marketing operations are expected to improve in 2014 mainly because of a self help we’ve done on lowering the working capital, the back-to-back deal we did at St. Eustatius and the lower operating costs to be in that business."