Delek Logistics Partners LP Dossier
Qualitative Analysis
Business overview
Delek Logistics Partners, LP (NYSE: DKL) is a growth-oriented master limited partnership (MLP) headquartered in Brentwood, Tennessee, formed by Delek US Holdings, Inc. (NYSE: DK). The partnership owns and operates high-performance midstream energy infrastructure assets, providing gathering, pipeline transportation, storage, wholesale marketing, terminalling, and water disposal/recycling services. Its operations are primarily located in the Permian Basin (including both the Midland and Delaware sub-basins) and other select areas in the Gulf Coast region. DKL operates under a fee-based, toll-booth business model that provides highly predictable cash flows, historically insulated from direct commodity price volatility. While DKL was established to support the refining and downstream operations of its parent, Delek US Holdings, it has successfully executed a strategic economic separation, with over 80% of its pro forma run-rate cash flows in 2026 projected to come from third-party sources.
Research as of 20 Jun 2026
Strategic Initiatives
Growth programs, investments, and their expected impact
Developing a comprehensive sour gas processing, treating, and handling solution at the Libby Gas Complex in the Delaware Basin, including the drilling of acid gas injection (AGI) wells.
Expected impact: Provides comprehensive capabilities to customers, supporting long-term oil and gas production growth in the Delaware Basin and increasing fee-based revenues.
Increasing midstream EBITDA contribution from third-party sources to reduce reliance on sponsor Delek US Holdings.
Expected impact: Expected to increase third-party run-rate EBITDA to approximately 80% in 2026 on a pro forma basis, enhancing cash flow visibility and independence.
Agreement to repurchase common units from Delek US Holdings to optimize capital structure.
Expected impact: Reduces outstanding common units and returns value to unitholders while managing leverage.
Mergers, Acquisitions & Partnerships
Recent deals and strategic collaborations
Recent Acquisitions
Acquisition of water disposal and recycling operations in the Permian Basin and the Bakken to expand midstream capabilities and diversify service offerings.
Financial impact: Paid via $209.3 million in cash and 2.175 million common units. Immediately accretive to cash flow and profitability, representing an attractive purchase multiple of approximately 5.5x EBITDA.
Acquisition of water disposal and recycling operations in the Midland Basin to establish a fully integrated multi-commodity midstream platform.
Financial impact: Paid via $160.0 million in cash and $70.0 million of preferred equity. Expanded Permian asset base and scale, driving record wastewater disposal volumes.
Strategic Partnerships
Acquisition of a 50% investment in W2W Holdings LLC, which includes a 15.6% indirect interest in the Wink to Webster Pipeline, LLC joint venture.
Terms: Acquired from a wholly owned subsidiary of Delek US Holdings on August 5, 2024.