Delek Logistics Partners, LP

What they do

Operates gathering and processing assets (including Midland and Delaware gathering systems, water disposal/recycling, and processing plants like Libby) and wholesale marketing/terminalling assets (pipelines and terminals supporting Delek Holdings refineries). Generates fee-based revenue from gathering, transportation, storage, and terminalling services. Substantial customer concentration with Delek Holdings, which is the primary customer for many assets.

Revenue drivers

• Gathering and Processing (G&P) segment — Generates product sales and fee-based revenues from crude gathering, water disposal, and gas processing; includes Midland and Delaware gathering assets and water operations (H2O, Gravity). Second quarter 2026 Adjusted EBITDA was $104.1 million, up from $78.0 million year-over-year.
• Wholesale Marketing and Terminalling segment — Earns margins from terminalling and wholesale marketing, primarily supporting Delek Holdings refineries. Second quarter 2026 Adjusted EBITDA was $12.6 million, down from $23.3 million due to termination of East Texas marketing agreement.
• Sales-type leases and interest income — Includes income from sales-type leases (e.g., pipeline capacity) which contributed $24.0 million in EBITDA during Q2 2026.

Recent performance

Second quarter 2026 net income was $28.9 million ($0.54 per diluted unit), down from $44.6 million ($0.83) in Q2 2025. Adjusted EBITDA rose to $143.5 million from $127.4 million, driven by G&P segment margins and sales-type lease impacts. Cash from operations was $71.2 million in Q2 2026, versus $107.4 million a year earlier. Distributable cash flow, as adjusted, was $80.5 million in Q2 2026, up from $72.5 million. Reiterated 2026 EBITDA guidance of $520 to $560 million.

Strategy

Pursuing acquisitions and organic projects to expand the integrated crude, gas, and water platform, particularly in the Permian and Delaware Basins. Recent dropdowns from Delek Holdings (e.g., W2W pipeline interest, H2O, Gravity) increased third-party revenue diversification. Completing the integrated sour gas processing project at the Libby Gas Complex. Refinanced portions of capital structure to extend maturities and reduce interest expense, targeting a stronger standalone financial profile.

Risks

• High reliance on Delek Holdings — Delek Holdings is a primary customer for many assets; any reduction in volumes or underperformance would materially hurt results.
• Commodity price and OPEC+ exposure — Changes in oil production and prices can impact producer activity and volumes in the basins served.
• Leverage and liquidity — Leverage ratio of ~4.23x and $2.4 billion debt require disciplined cash management; inability to refinance could pressure distributions.
• Integration and operational risks — Operating hazards (spills, releases, tank failures) and integration of recent acquisitions could cause costs, penalties, or delays.

Outlook

Management expects continued execution on growth opportunities, including completing the Libby sour gas system, and reiterates 2026 EBITDA guidance of $520-$560 million. Focus on disciplined liquidity and leverage management, distribution growth (54th consecutive quarterly increase), and expanding third-party cash flows.