These long-term contracts, often referred to as minimum volume commitments, were supposed to protect MLPs from major oil and gas price drops, because they include so-called minimum volume commitments, where customers pay pipeline operators whether they move any oil or not.
But the latest leg down in crude's 19-month plunge has cast doubt over the perceived safety of those contracts as producers try to navigate the oil crisis.
Experts said they expect Chesapeake will try to renegotiate contract terms, which would be the first major test of these deals and the so-called midstream companies that flourished during the U.S. shale boom.
Another risk is it could file for bankruptcy protection, which could give it the option discontinuing or renegotiating commercial contracts.
Hatfield said he expects Williams will be forced to accept a 50-percent price cut in its contract price with Chesapeake, either through the courts or mutual renegotiation.
why he's talking cash flow I've made 40 % on my money...so be it.....a 20 % yield and folks are wonder why it's being sold
Market technicals are in control
1. look at ETP's lowest close...some use intra day...I prefer low close.
2. Look at the S & P 1812...if we break that we quickly could see down 20 %
In Seeking Alpo, under the EPD ticker an article was written "EPD's slide offers opportunity"...then under the article are comments...read the one by Darren McCammon..insightful as to EPD..and one could start to understand the potential risks to ETP
The unprecedented build-up of surplus crude oil supplies in Cushing, Oklahoma, is beginning to cause logistical headaches for companies moving crude between thousands of steel tanks in the nation's most important storage hub.
Enterprise Products Partners, a large participant but relatively small operator in the Cushing market, has told at least some counterparties that it is experiencing delays in delivering crude from its tanks, according to three sources who were informed of unspecified "terminalling and pump" issues.