uploads/2015/04/Corporate-Structure11.jpg

Enbridge Energy Partners: Liquids, Natural Gas Midstream Player

By

Updated

Enbridge Energy Partners

Enbridge Energy Partners (EEP) is an energy midstream MLP (master limited partnership). In this series, you’ll get an overview of this company that

  • gathers, processes, transports, stores, and sells crude oil and petroleum liquids
  • gathers, transports, treats, and markets natural gas
  • produces, fractionates, transports, and sells NGLs (natural gas liquids)

Article continues below advertisement

Partnership and segments

Enbridge Energy Company is owned by Enbridge, Inc. (ENB). Enbridge Energy Company is Enbridge Energy Partners’ (EEP) general partner. The graph above describes the corporate structure and ownership relationship betweeen Enbridge Energy Partners (EEP), Enbridge Energy Management (EEQ), and Enbridge, Inc. (ENB).

Midcoast Energy Partners (MEP), an EEP subsidiary, owns and operates the company’s natural gas transportation assets.

Equity restructuring

On July 1, 2014, Enbridge Energy Partners (EEP) entered into an equity restructuring agreement with its general partner, Enbridge Energy Company. With this agreement, Enbridge Energy Company waived its right to receive cash distributions and the net income allocation on its 2% general partner interest in EEP’s incentive distribution rights. In exchange, it received 66.1 million units of EEP’s Class D units and 1,000 units in new incentive distribution units.

Enbridge Energy Partners (EEP) operates two business segments in the US:

  • Liquids
  • Natural Gas

One-year unit price

Enbridge Energy Partners is an MLP. As such, it offers common units to limited partners. These units are traded on the exchange. General partners receive units called GP units, which aren’t traded on the exchange. EEP’s Class A common units are traded on the NYSE. The company also offers i-units, a special class of its limited partner interests, to Enbridge Energy Management.

Enbridge Energy Partners’ (EEP) unit price increased 22% in the last year. In comparison, Sunoco Logistics Parters’ (SXL) unit price decreased ~8%, while MarkWest Energy Partners’ (MWE) unit price has remained unchanged. During the same time frame, Regency Energy Partners’ (RGP) unit price decreased 15%.

Enbridge Energy Partners and Regency Energy Partners together account for 9.25% of the Alerian MLP ETF (AMLP).

In this series, we’ll discuss each of the company’s segment assets, beginning with the Liquids segment. We’ll also explore key factors that drive Enbridge Energy Partners’ business.

Advertisement

More From Market Realist