Crude Oil Transportation and Services segment

The Crude Oil Transportation and Services segment was Energy Transfer Partners’ (ETP) top performing segment in the first quarter. The segment posted 148.1% YoY EBITDA growth in the first quarter.

The trend is expected to continue during the second quarter due to the contribution from the Bakken Pipeline project, strong crude oil throughput volumes particularly from the Permian Basin, and the strong performance for the crude oil acquisition and marketing business due to the wider WTI spreads. The WTI Cushing-WTI Midland spread averaged $7.8 per barrel in the second quarter—compared to $0.8 per barrel in the second quarter of 2017.

What to Expect from Energy Transfer Partners in Q2 2018

Midstream segment

The Midstream segment, which is mainly involved in natural gas gathering and processing, is expected to benefit from higher commodity-linked margins due to higher crude oil and NGLs (natural gas liquids) prices and strong Permian volumes. The average crude oil price was $67.8 per barrel in the second quarter—compared to $48.1 per barrel in the second quarter of 2017. The above positives might be partially offset by a decline in the throughput volume in the North Texas, Mid-Continent, and Ark-La-Tex regions.

NGLs and Refined Products Transportation and Services segment

The NGLs and Refined Products Transportation and Services segment reported 18.4% YoY EBITDA growth in the first quarter. The segment might continue to benefit from higher fractionation margins, higher terminaling margins, and the strong refined products volume during the second quarter. According to the EIA (U.S. Energy Information Administration), the average gasoline demand was 9.52 MMbpd (million barrels per day) in the second quarter—compared to 9.45 MMbpd in the second quarter of 2017.

The above positive might be partially offset by weak NGLs transportation volumes due to a break in the partnership’s Mariner East 1 pipeline.

Interstate Transportation segment

The Interstate Transportation segment posted 21.9% YoY adjusted EBITDA growth during the first quarter. The trend is expected to continue in the second quarter due to both of the phases of the Rover Pipeline project being placed into service. The trend might be partially offset by lower natural gas volumes in its Transwestern, Trunkline, and Panhandle pipeline systems.

Intrastate Transportation segment

The Intrastate Transportation segment’s second-quarter performance might be impacted by renegotiating contracts and a lower contribution from unconsolidated affiliates. The impact might be partially offset by an increase in pipeline exports to Mexico, an increase in natural gas sales YoY, and higher storage margins.

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