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The Basics of MPLX, a Pipeline MLP

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MPLX, an MLP formed by Marathon Petroleum

MPLX (MPLX) is an MLP formed by Marathon Petroleum Corporation (MPC). It owns, operates, develops, and acquires pipelines and other midstream assets. Its operations relate to the transportation and storage of crude oil, refined products, and other hydrocarbon-based products.

MPLX generates revenue primarily by charging tariffs for transporting crude oil, refined products, and other hydrocarbon-based products through its pipeline network. It also charges fees for storing crude oil and products. In addition, it operates crude oil and product pipelines owned by MPC and third parties.

Marathon Petroleum has historically been MPLX’s major customer. MPLX has multiple storage and transportation agreements with Marathon, which will remain MPLX’s largest source of revenue for the foreseeable future.

Actually, MPLX is only a vehicle for Marathon Petroleum’s purchase of MarkWest Energy Partners (MWE). MarkWest is much larger than MPLX, and Marathon Petroleum is ponying up the cash for the cash consideration in the deal.

MPLX’s major assets include an almost 100% interest in two entities that control a network of pipeline systems. They include approximately 1,004 miles of common carrier crude oil pipelines and approximately 1,902 miles of common carrier product pipelines extending across nine states.

MPLX also owns a barge dock located on the Mississippi River near Wood River, Illinois, with 78 thousand barrels per day (or mbpd) of crude oil and product throughput capacity. It also owns crude oil and product tank farms in Patoka, Wood River, and Martinsville, Illinois, and Lebanon, Indiana.

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