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Plains All American Pipeline: A Midstream Energy MLP

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Midstream energy company

Plains All American Pipeline, L.P. (PAA) is a midstream energy MLP headquartered in Houston. The company owns a network of pipelines, storage, and gathering assets in the United States and Canada. Midstream energy companies are primarily engaged in gathering, processing, transport, storage, and wholesale marketing of oil and gas products.

Plains All American Pipeline isn’t involved in exploration and production, which are upstream activities. The company provides logistics services for oil, natural gas, and NGLs (natural gas liquids).

Plains GP Holdings LP (PAGP) owns GP (general partner) interests and IDRs (incentive distribution rights) of Plains All American Pipeline, L.P. The above chart shows the company’s partnership structure. PAA forms ~7% of the Alerian MLP ETF (AMLP).

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In the above map, you can see the network of Plains All American Pipeline’s significant assets in the United States and Canada. It highlights the company’s crude oil and NGL pipelines, crude oil, NGL, natural gas, and refined products storage facilities, terminals, and fractionation and processing facilities.

Plains All American Pipeline’s competition

Plains All American Pipeline competes with Enterprise Products Partners L.P. (EPD), Sunoco Logistics Partners L.P. (SXL), and other pipeline MLPs. Competition in the pipeline transport segment is based on transport charges and access to producing areas and the market. Demand for crude oil and NGLs also impact transport volumes, which drive revenues. The company competes with other players for its supply, logistics, and storage businesses.

In this series, we’ll take a deeper look into Plains All American Pipeline’s (PAA) business, its segments, revenue drivers, and factors that impact the company’s performance. This will help investors make informed decisions about investing in the company. We’ll also see how PAA’s forward distribution yields compare with its peers.

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