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How Summit Midstream Benefits from MVC Contracts

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Summit Midstream’s MVCs

In the previous part of this series, we saw how three of Summit Midstream Partners’ (SMLP) five business segments saw falls in throughput volumes, mainly due to lower drilling activity in the regions. The partnership is protected to some extent from these volume falls through MVCs (minimum volume commitment) contracts.

According to the company’s 3Q16 earnings release, “SMLP’s MVC shortfall payment mechanisms contributed $16.4 million of adjusted EBITDA in the third quarter of 2016.”

Williams Partners (WPZ), DCP Midstream Partners (DPM), and Boardwalk Pipeline Partners (BWP) are among the midstream MLPs that benefit from MVC agreements with their customers.

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