Must-know: An introduction to Exterran Partners
High distribution, yield hasn’t boosted Exterran Partners in 2014 (Part 1 of 6)
Overview of Exterran Partners
Exterran Partners, L.P. (EXLP), is a master limited partnership and a provider of natural gas contract compression services to its customers in the United States. EXLP’s contract operation services include designing, sourcing, owning, installing, operating, servicing, repairing, and maintaining equipment to provide natural gas compression services to its customers.
Other companies offering natural gas compression services, among other services, include Access Midstream Partners (ACMP), which was acquired by Williams Companies (WMB) in 2014. These companies also include Regency Energy Partners (RGP), which is owned by Energy Transfer Equity (ETE). Both RGP and ACMP are components of the Alerian MLP ETF (AMLP).
Close peers include USA Compression Partners (USAC), which is a pure-play natural gas compression services provider like EXLP. EXLP is a component of the Global X Junior MLP ETF (MLPJ).
Corporate structure
Exterran Holdings (EXH) holds a 2% general partner interest in EXLP and all of its incentive distribution rights. Apart from its general partner interests, EXH also holds a 35% limited partner interest in EXLP.
Asset overview
EXLP’s primary assets are natural gas compression units with varying horsepower. According to a company presentation, EXLP is the largest contract compression provider, with 2.9 million operating horsepower. Of this, ~170,000 operating horsepower was part of its organic growth, while ~550,000 operating horsepower was a result of acquisitions in 2014.
We’ll explore these acquisitions in detail later in this series. The next article talks about natural gas compression services in the US.
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