Marathon Petroleum Corporation MPC − a leading independent refiner, transporter and marketer of petroleum products − unveiled its capital investment plan for the year 2016. During the year, the company will likely invest $4.2 billion.
Out of the total amount, Marathon Petroleum is expected to spend $1.5 billion on the refining and marketing business. For the Speedway unit – representing the retail operation − almost $400 million will be invested by the company. For the company’s pipeline transportation operation, $2.2 billion is anticipated to be allocated.
Out of $1.5 billion likely to be allocated for refining and marketing businesses, $675 million will go toward refinery sustaining capital. Almost $475 million will be spent on margin-enhancing developments and $350 million on midstream activities.
For the Speedway unit, $400 million will be allocated for the remodeling of stores and also for constructing of new stores at the core market of Speedway.
It is to be noted the pipeline transportation unit also includes Marathon Petroleum’s interest in MPLX LP MPLX − a publicly traded master limited partnership that owns, operates, develops and acquires pipelines and other midstream assets. Marathon Petroleum will likely invest $1.7 billion for MPLX out of $2.2 billion capital assigned for the pipeline transportation segment.
Management revealed that this capital allocation for the prospective projects will help the company to meet long-term goal and earn money for its shareholders.
Findlay, OH-based Marathon Petroleum is a leading independent refiner, transporter and marketer of petroleum products. The company, in its current form, came into existence following the 2011 spin-off of the Houston, TX-based Marathon Oil Corporation’s refining/sales business into a separate, independent and publicly traded entity.
Marathon Petroleum currently carries a Zacks Rank #3 (Hold), implying that the stock will perform in line with the broader U.S. equity market over the next one to three months.
Meanwhile, some better-ranked players in the energy sector are Energy Transfer Equity, L.P. ETE and Murphy USA Inc. MUSA. Both these stocks sport a Zacks Rank #1 (Strong Buy).
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