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Why midstream companies could profit from LNG exports
So, by the time any other facilities come online, Cheniere’s facilities will already be in place. And, Cheniere is likely to enjoy its front-of-the-line advantage for a little while longer.
In this part of the series, we’ll discuss Oiltanking Partners’ (OILT) and Enterprise Products Partners’ (EPD) current financial situation and why it makes strong sense to invest in OILT.
But you should keep in mind that EPD is a much larger company. So, it has much more capacity to invest in growth projects. OILT unitholders will benefit from EPD’s stronger base to spend on capex.
Pursuant to the successful completion of phase II of the merger, Enterprise Products Partners (EPD) will acquire Oiltanking Partners’ (OILT) 100% ownership.
According to EPD, it will save ~$30 million from various synergistic operations and cost savings from the complete integration of OILT’s business into Enterprise’s system.
With access to Oiltanking Partners’ (OILT) waterborne markets and storage position, EPD will be able to integrate its supply chain more efficiently.
OILT’s Houston facility includes a Houston terminal and Appelt terminal. The Houston facility has an aggregate active storage capacity of approximately 16.2 million barrels.
On October 1, Enterprise Products Partners (EPD) also proposed to merge Oiltanking Partners into EPD in a unit-for-unit exchange transaction.Phase 2
Through the acquisition, Enterprise Products Partners (EPD) received 100% of the general partner and related incentive distribution rights and a 66% limited partner or LP ownership in Oiltanking Partners (OILT).
Enterprise Products Partners’ (EPD) acquisition of Oiltanking Partners (OILT) involves two steps. In this part of the series, we will explain the first step.
EPCO, or Enterprise Products Company, is the general partner of Enterprise Products Partners (EPD). It also owns 35.3% of EPD’s limited partner interests
On October 1, 2014, Enterprise Products Partners (EPD) announced its acquisition of Oiltanking Partners L.P. (OILT), a midstream energy master limited partnership
TC PipeLines LP (TCP) is a master limited partnership (or MLP) that owns or has ownership in six interstate natural gas pipelines. TransCanada Corp. (TRP) owns ~28.9% equity interest in TCP.
Producers currently receive higher market prices for crude oil and NGLs (or natural gas liquids) compared to natural gas. So many producers have focused their drilling activity in NGL-rich shale areas rather than areas that produce dry natural gas.
ONEOK Partners (OKS) plans on spending $7.0 to $7.5 billion in growth projects from 2010–2016. Approximately $4.1 billion of that money will be spent in the natural gas gathering and processing segment, while $3.2 billion will be spent in the natural gas liquids (or NGLs) segment.
Now that we’ve looked at various sources of margin across ONEOK Partners’ (OKS) business segments, let’s delve deeper into the margin mix within these segments.
Natural gas, crude oil, and NGL (or natural gas liquid) supply is affected by several factors that could be supply related or demand related.
Energy Transfer Partners (ETP) is the largest company by enterprise value (or EV). Williams Partners (WPZ) is the largest company by market capitalization among its peers.These peers include ONEOK Partners (OKS), Plains All American Pipelines (PAA), and Spectra Energy Partners (SEP).
For 2Q14 (or the second quarter of 2014), ONEOK Partners’ (OKS) natural gas gathering and processing segment reported an operating income of $66.1 million, which was 20% higher year-over-year (or YOY). Natural gas volume growth in the Williston Basin and Cana-Woodford Shale attributed to the increase.
ONEOK Partners (OKS) reported second quarter revenue of $3 billion, missing the Wall Street analysts’ estimate of $3.5 billion. Revenues were higher by approximately 11% year-over-year (or YOY).