How segment’s operating margin fared
The operating margin of EPD’s crude oil pipeline segment has been increasing since 2010 due to increases in volume, average tariffs, and other fees. Operating margin increased 64% from 2012 to 2013 and 5% from 2013 to 2014.
Effect of seasonality on revenue
This segment experiences no seasonal impact on the operations of onshore crude oil pipelines and terminals. However, crude oil assets situated along the Texas Gulf Coast may be affected by weather events such as hurricanes and tropical storms.
Strong competition from other peers
EPD faces strong competition from other crude oil pipeline companies, rail carriers, major integrated oil companies and their marketing affiliates, financial institutions with trading platforms, and independent crude oil gathering and marketing companies. Competition is based primarily on quality of customer service, competitive pricing, and proximity to customers and market hubs.
Key ETFs and stocks
Some of the MLPs that operate in the same geographical region as Enterprise Product Partners (EPD) are Williams Partners (WPZ), NGL Energy Partners (NGL), Teekay Offshore Partners (TOO), and Boardwalk Pipeline Partners (BWP). These MLPs have a combined weight of 24.4% in the Alerian MLP ETF (AMLP).
In the next part of the series, we’ll discuss the Offshore Pipelines & Services segment.