Martin Midstream Partners L.P., together with its subsidiaries, provides business lines include terminalling, processing, and storage services for petroleum products and by-products; land and marine transportation services for petroleum products and by-products, chemicals, and specialty products; sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and marketing, distribution, and transportation services for natural gas liquids (‘NGL’) and blending and packagin...
Martin Midstream Partners L.P., together with its subsidiaries, provides business lines include terminalling, processing, and storage services for petroleum products and by-products; land and marine transportation services for petroleum products and by-products, chemicals, and specialty products; sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and marketing, distribution, and transportation services for natural gas liquids (‘NGL’) and blending and packaging services for specialty lubricants and grease.
The company is a publicly traded limited partnership with a diverse set of operations focused primarily in the Gulf Coast region of the United States (‘U.S.’).
The company’s vertically integrated services have created long-standing relationships with a diversified customer base that includes major and independent oil and gas companies, independent refiners, chemical companies, and other wholesale purchasers of certain petroleum products and by-products, with significant business concentrated around the U.S. Gulf Coast refinery complex, which is a major hub for petroleum refining, natural gas gathering and processing, and support services for the exploration and production industry. The petroleum products and by-products that the company gathers, transports, stores, and markets are produced primarily by major and independent oil and gas companies, who often rely on third parties, such as the company, for the transportation and disposition of these products.
The company generates a significant amount of its cash flow from fee-based businesses, with a significant amount of the working capital demands and margin risk associated with the collective services that it and its sponsor, Martin Resource Management Corporation, provide to customers mainly assumed under contracts between such customers and Martin Resource Management Corporation. The company’s fixed fee and margin business provides a combination of long-term, spot, and evergreen contracts.
The company entered into an omnibus agreement dated November 1, 2002, with Martin Resource Management Corporation (the ‘Omnibus Agreement’) that governs, among other things, potential competition and indemnification obligations among the parties to the agreement, related party transactions, the provision to the company of general administration and support services by Martin Resource Management Corporation, and the company’s use of certain of Martin Resource Management Corporation’s trade names and trademarks. Under the terms of the Omnibus Agreement, the employees of Martin Resource Management Corporation are responsible for conducting the company’s business and operating its assets.
Primary Business Segments
The company’s primary business segments can be generally described as follows:
Terminalling and Storage: The company owns or operates 12 marine shore-based terminal facilities and 8 specialty terminal facilities located primarily in the Gulf Coast region of the U.S., with an aggregate storage capacity of 2.6 million barrels. The company owns one naphthenic lubricants refinery in Smackover, Arkansas, with a capacity of 7,700 barrels per day, 0.3 million barrels of crude bulk storage, and 0.6 million barrels of lubricant storage. Further, the company owns approximately 2.3 million barrels of underground storage capacity for NGLs. The company stores NGLs for wholesale deliveries to refineries, industrial NGL users, and propane retailers in the southern U.S. The company provides storage, refining, and handling services for producers and suppliers of petroleum products and by-products, including the refining of naphthenic crude oil. The company’s facilities and resources provide it with the ability to handle various products that require specialized treatment, such as molten sulfur and asphalt. The company also provides land rental to oil and gas companies, along with storage and handling services for lubricants and fuels through its shore-based terminals. The company provides these terminalling and storage services on a fixed-fee basis, and a significant portion of the contracts in this segment provide for minimum fee arrangements that are not based on the volumes handled.
Transportation: The company operates a fleet of both land transportation and marine transportation assets that transport petroleum products and by-products, petrochemicals, and chemicals. The company’s land transportation assets include approximately 600 trucks and 1,275 tank trailers, which are based across 25 terminals strategically located throughout the U.S. Gulf Coast and southeastern U.S. The company’s marine transportation assets include 27 inland marine tank barges, 15 inland push boats, and one articulated offshore tug and barge unit that primarily operate coastwise along the Gulf of Mexico and on the U.S. inland waterway system, primarily between domestic ports along the Gulf of Mexico, the Intracoastal Waterway, the Mississippi River system, and the Tennessee-Tombigbee Waterway system. The company’s ‘refinery and petrochemical services’ model is focused on the transportation of heavy tank bottoms (by-products) and other petroleum products, hauling NGLs, molten sulfur, sulfuric acid, paper mill liquids, chemicals, and numerous other bulk liquid commodities from refineries and petrochemical production locations to end markets. The company provides these transportation services on a fee basis, and many of its customers have long-standing contractual relationships with the company. In addition, the company’s marine fleet contains several vessels that reflect its focus on specialty products.
Sulfur Services: The company has developed an integrated system of transportation assets and facilities relating to sulfur services. The company processes and distributes sulfur produced by oil refineries, primarily located in the Gulf Coast region of the U.S. The company purchases and sells molten sulfur on contracts that are tied to sulfur indices to minimize margin fluctuations. The company processes molten sulfur into prilled or pelletized sulfur at its facility in Beaumont, Texas, on contracts that traditionally provide guaranteed minimum fees. The sulfur that the company processes and handles is primarily used in the production of fertilizers and industrial chemicals. The company owns and operates five sulfur-based fertilizer production plants and one emulsified sulfur blending plant. These plants are located in Texas and Illinois and manufacture primarily sulfur-based fertilizer products for wholesale distributors and industrial users. Demand for the company’s sulfur products exists across the globe, and its asset base provides additional opportunities to handle increases in U.S. supply and access to foreign demand.
Specialty Products: The company owns and operates facilities dedicated to both the blending and packaging of private label agricultural, automotive, and industrial lubricants, and the manufacture and packaging of commercial and industrial greases. The company sells and distributes NGLs that it primarily purchases from refineries and natural gas processors. The company stores and transports NGLs for wholesale deliveries to industrial NGL users and propane retailers in the southeastern U.S.
Growth Strategy
The key components of the company’s growth strategy are to establish strategic commercial alliances, spur internal organic growth by attracting new customers, and expanding services provided to existing customers, as well as pursuing organic growth projects.
Terminalling and Storage Segment
Specialty Terminal Operations
The company owns or operates nine terminalling facilities providing storage, handling, and transportation of various petroleum products and by-products. The locations and capabilities of the company’s terminals are structured to complement its other businesses and reflect its strategy to provide a broad range of integrated services in the storage, handling, and transportation of products. The company developed its terminalling and storage assets through the acquisition and upgrades of existing facilities, as well as developing its own properties strategically located near rail, waterways, and pipelines. The company anticipates further expansion of its terminalling facilities primarily through organic growth.
At the Neches, Stanolind, and Tampa terminals, the company’s customers are primarily energy and petrochemical companies. In addition, Martin Resource Management Corporation pays the company for terminalling and storage of asphalt at these facilities through a terminalling service agreement that includes a provision for minimum volume throughput requirements. The company charges either a fixed monthly fee or a throughput fee for the use of services it performs at its facilities, based on the capacity of the applicable tank. The company conducts a substantial portion of its terminalling and storage operations under long-term contracts, which enhance the stability and predictability of its operations and cash flow. The company attempts to balance its short-term and long-term terminalling contracts in order to allow it to maintain a consistent level of cash flow while maintaining flexibility to earn higher storage revenues when demand for storage space increases. In addition, a significant portion of the contracts for the company’s specialty terminals provide for minimum fee arrangements that are not based on the volume handled.
In Smackover, Arkansas, the company owns a refinery where it processes naphthenic crude oil into finished products that include naphthenic lubricants, distillates, asphalt, and other intermediates. The refinery's capacity is dedicated to a subsidiary of Martin Resource Management Corporation through a long-term tolling agreement based on throughput rates and a monthly reservation fee.
The company owns asphalt terminals in each of Hondo, South Houston, and Port Neches, Texas, and Omaha, Nebraska, each dedicated to a subsidiary of Martin Resource Management Corporation through a terminalling service agreement based on throughput rates.
In Beaumont, Texas, the company owns a terminal (‘Spindletop Terminal’) where it receives natural gasoline via pipeline, stores the natural gasoline in the company’s above-ground tank, and then ships the product to its customers via other pipelines to which the facility is connected. The company’s fees for the use of this facility are based on the volume of barrels shipped from the terminal under a take-or-pay arrangement that includes a provision for minimum volume throughput requirements.
Shore-Based Terminal Operations
The company owns or operates 12 marine shore-based terminals along the U.S. Gulf Coast from Theodore, Alabama, to Corpus Christi, Texas. The company’s terminalling assets are located at strategic distribution points for the products it handles and are in close proximity to its customers. The company is one of the largest operators of marine shore-based terminals in the Gulf Coast region of the U.S. These terminals are used to distribute and market fuel and lubricants. Additionally, full-service terminals also provide shore bases for companies that are operating in the offshore exploration and production industry. Customers are primarily oil and gas exploration and production companies, as well as oilfield service companies, such as drilling fluid companies, marine transportation companies, and offshore construction companies. Shore bases typically provide logistical support, including the storage and handling of tubular goods, loading and unloading bulk materials, providing facilities from which major and independent oil companies can communicate with and control offshore operations, and leasing dockside facilities to companies which provide complementary products and services, such as drilling fluids and cementing services. These contracts generally provide the company a fixed land rental fee and additional rental fees that are determined based on a percentage of the sales value of the products and services delivered from the shore base. In addition, Martin Resource Management Corporation, through terminalling service agreements, pays the company for terminalling and storage of fuels and lubricants at these terminal facilities, and includes a provision for minimum volume throughput requirements.
The company’s marine shore-based terminal operations are divided into two classes of terminals: full-service terminals and fuel and lubricant terminals.
Full-Service Terminals: The company owns or operates three full-service terminals. These facilities provide logistical support services and storage and handling services for fuel and lubricants. The significant difference between the company’s full-service terminals and its fuel and lubricant terminals is that its full-service terminals generate additional revenues by providing shore bases to support its customers' operating activities related to the offshore exploration and production industry. One typical use for the company’s shore bases is for drilling fluids manufacturers to manufacture and sell drilling fluids to the offshore drilling industry. Offshore drilling companies may also set up service facilities at these terminals to support their offshore operations. Customers of the company’s full-service terminals are primarily oil and gas exploration and production companies, oilfield service companies, such as drilling fluids companies, marine transportation companies, and offshore construction companies.
Fuel and Lubricant Terminals: The company owns or operates nine fuel and lubricant terminals located in the Gulf Coast region of the U.S. that provide storage and handling services for lubricants and fuel oil.
Underground NGL Storage Terminal Operations
The company’s underground NGL terminalling assets have storage and logistics capabilities for NGLs purchased primarily from major domestic oil refiners and natural gas processors. This facility has a capacity of 2.3 million barrels for NGLs, along with a railcar facility with the capacity to handle up to 24 railcars per day. These operations support the NGL marketing efforts in its specialty products division and at Martin Resource Management Corporation.
Transportation Segment
Land Transportation Operations
The company operates a fleet of land transportation assets comprising approximately 600 trucks and 1,275 tank trailers that transport petroleum products and by-products, petrochemicals, and chemicals. The company’s land transportation assets operate out of 25 strategically located terminals throughout the U.S. Gulf Coast and Southeastern U.S.
The company’s major land transportation customers include energy, petrochemical, and chemical companies, as well as Martin Resource Management Corporation. The company conducts its land transportation services under fee-based transportation agreements with customers with whom it has long-term relationships.
The company is party to a master transportation services agreement under which it provides land transportation services to Martin Resource Management Corporation on a demand basis at applicable market rates. The agreement will continue unless either party terminates the agreement by giving at least 30 days' written notice to the other party. The rates under this agreement are subject to any adjustments that are mutually agreed upon or in accordance with a price index. Additionally, shipping charges are also subject to fuel surcharges determined on a weekly basis in accordance with the U.S. Department of Energy’s national diesel price list.
Marine Transportation Operations
The company utilizes a fleet of inland and offshore tows that provide marine transportation of petroleum products and by-products produced in oil refining. The company’s marine transportation business operates coastwise along the Gulf of Mexico and the east coast of the U.S., as well as on the U.S. inland waterway system, primarily between domestic ports along the Gulf of Mexico, the Intracoastal Waterway, the Mississippi River system, and the Tennessee-Tombigbee Waterway system. The company’s inland tows generally consist of one push boat and one to three tank barges, depending upon the horsepower of the push boat, the river or canal capacity and conditions, and customer requirements. The company’s offshore tow consists of one tugboat, with much greater horsepower than an inland push boat, and one large tank barge. The company transports asphalt, fuel oil, gasoline, sulfur, and other bulk liquids.
The company’s largest marine transportation customers include major and independent oil and gas refining companies, petroleum marketing companies, and Martin Resource Management Corporation. The company conducts its marine transportation services on a fee basis primarily under spot contracts.
The company is a party to a marine transportation agreement under which it provides marine transportation services to Martin Resource Management Corporation on a spot contract basis at applicable market rates. Effective each January 1, this agreement automatically renews for consecutive one-year periods unless either party terminates the agreement by giving written notice to the other party at least 60 days prior to the expiration of the then-applicable term.
Sulfur Services Segment
The company maintains an integrated system of transportation assets and facilities relating to its sulfur services. The company gathers molten sulfur from refiners, primarily located on the U.S. Gulf Coast, and transports it by inland and offshore barges, railcars, and trucks. In the U.S., recovered sulfur is mainly kept in liquid form from the point of production to the point of usage at an elevated temperature of approximately 275 degrees Fahrenheit. The company has the necessary assets and expertise to handle the unique requirements for transportation and storage of molten sulfur.
The company’s standard purchase and sale agreements have terms that typically range from one to two years in duration, with prices that are usually tied to a published market indicator and fluctuate according to the price movement of the indicator. The company also provides barge transportation and tank storage services to large producers and consumers of sulfur under agreements with remaining terms from one to five years in duration.
The company operates a sulfur forming facility in Beaumont, Texas, which is used to convert molten sulfur into solid form (prills/granules). The Beaumont facility is equipped with two wet prill units and one granulation unit capable of processing a combined 5,500 metric tons of molten sulfur per day. Formed sulfur is stored in bulk until sold into local or international agricultural markets. The company’s forming services contracts are fee-based and typically include minimum fee guarantees.
Fertilizer and related sulfur products are a natural extension of the company’s molten sulfur business because of its access to sulfur and its distribution capabilities.
In the U.S., fertilizer is generally sold to farmers through local dealers. These dealers are typically owned and supplied by much larger wholesale distributors. The company sells to these wholesale distributors. The company’s industrial sulfur products are marketed throughout the U.S. via distributors. The sales price of the company’s industrial sulfur products varies based on the product and geographic region. The company transports its fertilizer and industrial sulfur products to its customers using third-party common carriers. The company utilizes barge and rail shipments for large volume and long-distance shipments where available.
The company manufactures and markets the following sulfur-based fertilizer and related sulfur products:
Ammonium sulfate (‘AMS’) products: The company produces various grades of AMS, including granular, coarse, standard, and 40% ammonium sulfate solution. These products primarily serve agricultural and industrial markets. The company packages these custom-grade products under both proprietary and private labels and sells them to major distributors and retail customers. The company’s ammonium sulfate plant produces approximately 400 tons per day of quality ammonium sulfate and is marketed to its customers throughout the U.S.
Liquid sulfur products: The company produces ammonium thiosulfate at its Neches terminal facility in Beaumont, Texas. This agricultural sulfur product is a clear liquid containing 12% nitrogen and 26% sulfur. This product serves as a liquid plant nutrient used directly through spray rigs or irrigation systems. It is also blended with other nitrogen, phosphorus, potassium liquids, or suspensions as well. The company’s market is predominantly the Mid-South and Southeastern U.S. and Coastal Bend area of Texas.
Plant nutrient sulfur products: The company produces plant nutrient and agricultural ground sulfur products at its facilities in Odessa and Cactus, Texas, as well as Seneca, Illinois. The company’s plant nutrient sulfur product is a 90% and 85% degradable sulfur product marketed under the Disper-Sul trade name and sold throughout the U.S. to direct application agricultural markets.
Industrial sulfur products: The company produces industrial sulfur products, such as elemental pastille sulfur, ground sulfur products, AMS, 40% AMS solution, and emulsified sulfur (AS-7). The company produces elemental pastille sulfur at its Odessa and Cactus, Texas, and Seneca, Illinois facilities. Elemental pastille sulfur is used to increase the efficiency of the coal-fired precipitators in the power industry. The industrial ground sulfur products are also used in a variety of dusting and wettable sulfur applications, such as rubber manufacturing, fungicides, sugar, and animal feeds. AMS dry products and 40% solutions manufactured in Plainview, Texas, are used in animal feed, water treatment, tanneries, and fire retardants. The company produces emulsified sulfur at its Nash, Texas facility. Emulsified sulfur is primarily used to control the sulfur content in the pulp and paper manufacturing processes.
Sulfuric acid: The company produces sulfuric acid at its Plainview, Texas facility. This facility processes molten sulfur to produce a dedicated supply of raw material sulfuric acid for its ammonium sulfate production plant. The sulfuric acid produced and not consumed by the captive ammonium sulfate production is sold to third parties or converted into oleum (otherwise known as fuming sulfuric acid), and utilized by DSM to produce ultra-pure electronic level sulfuric acid for the semiconductor manufacturing industry.
Seasonality
Sales of the company’s agricultural fertilizer products are partly seasonal as a result of increased demand during the early spring planting season.
Specialty Products Segment
Lubricants and Greases Operations
In Smackover, Arkansas, the company owns and operates a terminal used for lubricant blending, processing, packaging, marketing, and distribution. This terminal is the company’s central hub for branded and private label packaged lubricants, where it receives, packages, and ships heavy-duty, passenger car, and industrial lubricants to a network of retailers and distributors.
In Kansas City, Missouri, the company leases and operates a plant that specializes in the production, packaging, and distribution of automotive, commercial, and industrial greases. In Houston, Texas, the company owns and operates a plant that specializes in the production and distribution of commercial and industrial greases. In Phoenix, Arizona, the company leases and operates a plant that specializes in the production and distribution of commercial and industrial greases.
Natural Gas Liquids Operations
The company purchases NGLs, primarily propane and natural gasoline, from and provides NGL storage for major domestic oil refiners and natural gas processors. The company transports NGLs using MTI's land transportation fleet or by contracting with common carriers, owner-operators, and railroad tank car transportation companies. The company’s NGL customers consist of major domestic oil refiners, industrial processors, and retail propane distributors. The company typically enters into annual sales contracts with independent retail propane distributors to deliver their estimated annual volume requirements based on prevailing market prices. Dependable delivery is very important to these customers and, in some cases, may be more important than price. The company ensures adequate and timely supply of NGLs through term purchase and exchange contracts, storage of NGLs, the transportation fleet owned by MTI, and expertise in NGL supply and inventory management.
Relationship with Martin Resource Management Corporation
Martin Resource Management Corporation is engaged in the following principal business activities: distributing asphalt, marine fuel, and other liquids; providing marine bunkering and other shore-based marine services in Texas, Louisiana, Mississippi, Alabama, and Florida; operating a crude oil gathering business in Stephens, Arkansas; providing crude oil gathering and marketing services of base oils, asphalt, and distillate products in Smackover, Arkansas; providing crude oil marketing and transportation from the wellhead to the end market; operating an environmental consulting company; operating a butane optimization business; supplying employees and services for the operation of the company’s business; and operating, solely for the company’s account, the asphalt facilities in Hondo, South Houston, and Port Neches, Texas, and Omaha, Nebraska.
The company is and will continue to be closely affiliated with Martin Resource Management Corporation as a result of the following relationships.
Related Party Agreements
The Omnibus Agreement with Martin Resource Management Corporation requires the company to reimburse Martin Resource Management Corporation for all direct expenses it incurs or payments it makes on its behalf or in connection with the operation of its business.
Commercial
The company has been and anticipates that it will continue to be both a significant customer and supplier of products and services offered by Martin Resource Management Corporation.
Correspondingly, Martin Resource Management Corporation is one of the company’s significant customers. The company’s sales to Martin Resource Management Corporation accounted for approximately 15% of its total revenues for each of the years ended December 31, 2024.
Environmental and Regulatory Matters
The company generates both hazardous and nonhazardous solid wastes, which are subject to requirements of the federal Resource Conservation and Recovery Act, as amended (‘RCRA’), and comparable state statutes.
The company’s operations are subject to the federal Clean Air Act (‘CAA’), as amended, and comparable state statutes.
The workplaces associated with the company’s manufacturing, processing, terminal, and storage facilities are subject to the requirements of the federal Occupational Safety and Health Act (‘OSH Act’), and comparable state statutes. The company has conducted its operations in substantial compliance with OSH Act requirements, including general industry standards, record-keeping requirements, and monitoring of occupational exposure to regulated substances. The company’s marine vessel operations are also subject to safety and operational standards established and monitored by the U.S. Coast Guard.
As a result, the company is responsible for monitoring the ownership of its subsidiaries that engage in maritime transportation and for taking any remedial action necessary to ensure that no violation of the Jones Act ownership restrictions occurs.
The company’s trucking operations are subject to regulation by the U.S. Department of Transportation and by various state agencies under the Federal Motor Carrier Safety Act and the Hazardous Materials Transportation Act, and analogous state laws.
History
Martin Midstream Partners L.P. was founded in 1951. The company was incorporated in 2002.
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