Disclosure: I am in full compliance with all ethics and other policies for Market Realist research analysts. I am not invested in securities that I cover on Market Realist.
Author: Ingrid Pan
Ingrid formerly worked at Bank of America Merrill Lynch, Five Rings Capital, Goldman Sachs, and Morgan Stanley.
Currently, the capital markets are positioned to help fund MLPs’ growth, and this is constructive for the majority of MLP names such as Kinder Morgan Energy Partners (KMP), Enterprise Product Partners (EPD), Plains All American Pipeline (PAA), and MarkWest Energy (MWE).
Many MLPs have an agreement between the General Partner and Limited Partners that determines how the total percentage of cash distributions will be allocated between the GP and LP unitholders. In some cases, there is a mechanism called the “incentive distribution right” or IDR that allows the GP to receive an incrementally larger percentage of distributions as the amount distributed increases.
Last week's nat gas and NGL price movements ultimately resulted in fractionation spreads being down slightly.
A look at how to calculate frac spreads, a measure of the difference between nat gas and NGL prices.