The Strongest and Weakest MLP Subsectors in H1 2018

Pipeline transportation and natural gas

Natural gas and NGL (natural gas liquid) transportation was the weakest MLP subsector in H1 2018, with natural gas transportation MLPs falling by an average of 17.6%. This fall was due to the interstate pipeline operator count declining after the Federal Energy Regulatory Commission’s ruling and regulatory issues related to some pipeline projects. Dominion Midstream Energy Partners (DM) and TC PipeLines (TCP), among the weakest MLPs in H1 2018, fell the most in the subsector.

The Strongest and Weakest MLP Subsectors in H1 2018

Marine transportation

Marine transportation was the second-weakest MLP subsector in the first half of 2018, falling 14.6%. Marine transportation MLPs’ weakness in the first half could be due to weak earnings and trade war tension impacting global trade. Navios Maritime Midstream Partners (NAP) and Golar LNG Partners (GMLP) fell the most in the subsector.

Mineral interest

Mineral interest MLPs, which own royalty and mineral interest in crude oil and natural gas assets, formed the strongest MLP subsector in H1 2018. Higher commodity prices may have been behind their strong performance.

Others

Other subsectors, comprising catalytic conversion, frac sand, upstream, and midstream services, rose 27.2% on average. This rise was primarily led by upstream producers such as Legacy Reserves (LGCY) and Mid-Con Energy Partners (MCEP) and catalytic conversion operators such as OCI Partners LP (OCIP). In the next article, we’ll look at the strongest MLPs during the first half of 2018.