UPDATE 1-Marathon's 3rd qtr profit rises 75 pct on shale boost

Thu Oct 30, 2014 11:58am EDT
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(Adds details on MLP growth, Capline evaluating options)

HOUSTON Oct 30 (Reuters) - Marathon Petroleum Corp. on Thursday posted third- quarter net income of $672 million, a 75 percent jump from the same period a year earlier, as cheap inland crudes from the shale revolution boost the profits of U.S. refiners.

Net income per share was $2.36, up from $0.54 a year ago, the company said in a statement on Thursday.

Like its peer, Phillips 66, Marathon is emphasizing growth in midstream services as companies race to build new infrastructure to move growing U.S. crude production to refineries and markets.

Both companies are focusing much of their growth efforts on their Master Limited Partnerships (MLP) in the midstream space and have told investors they may drop down some of their midstream assets into their MLP structures. Marathon's MLP is known as MPLX LP.

"The opportunities for drop-downs of MPC's existing midstream assets, along with organic investments at MPC and MPLX, enable both MPC and MPLX to continue to participate in the energy infrastructure development taking place in the U.S.," Chief Executive Gary Heminger said in a statement.

Wells Fargo said management's commitment to accelerate growth of the MLP pleased investors. Heminger said unitholders of MPLX could expect average annual distribution growth in the mid-20 percent range over the next five years.

Shares of Marathon rose almost 4 percent to $90.81 and units of MPLX shot up nearly 10 percent to $66.

Marathon also said it would sell its remaining 31 percent stake in MPLX Pipe Line Holdings LP to MPLX as it grows the MLP.   Continued...