67 WALL STREET, New York - March 31, 2014 - The Wall Street Transcript has just published its Oil & Gas: Master Limited Partnerships Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Increasing Demand for Midstream Assets - U.S. Energy Infrastructure Build Out - Emerging Shale Plays - Outlook for Natural Gas Liquids - Oil and Gas Investing - Shale Production Growth
Companies include: MPLX LP (MPLX) and many more.
In the following excerpt from the Oil & Gas: Master Limited Partnerships Report, the President of MPLX LP (MPLX) discusses company strategy and the outlook for this vital industry:
TWST: Let's start with kind of an introduction to MPLX by way of some company history and a little overview of the business and assets today.
Ms. Beall: MPLX is still a relatively new master limited partnership. It became a publicly traded MLP in October of 2012. MPLX was formed by its sponsor company, Marathon Petroleum Corporation, to own and operate its midstream assets, and to be the primary growth vehicle for the MPC midstream business. MPLX is primarily fee-based, and is in the business of pipeline transportation for crude oil and finished products, including products like gasoline and diesel and jet fuels, and that represents about 90%-plus of the business. MPLX also has another asset in its business, which is a 1 million barrel butane cavern located just outside of Marathon Petroleum's Catlettsburg, Kentucky, refinery.
About 90% of the revenues for MPLX are derived from FERC-based tariffs, so MPLX is able to maintain a relatively constant cash flow because of the tariff revenue structure of the business. MPLX has also entered into long-term transportation and storage agreements with MPC, and that also ensures the stable cash flow for the company. There is no direct exposure to commodity risk, and that too, allows for very consistent cash flow. So those are the assets today in MPLX, that's what the operation is comprised of.
TWST: Does Marathon Petroleum remain your largest or most significant customer?
Ms. Beall: Yes, and it probably will be for the foreseeable future. About 90% of the revenue is derived from MPC, and so naturally most of our business will revolve around the MPC operations. As you may know, Marathon Petroleum is the fourth-largest refiner in the United States today. It's the largest refiner in PADD 2, which includes the Mid-Continent part of the United States, and MPC's operations are situated very near some of the growing shale oil and gas developments where we see a lot of production growth. That will benefit MPC, and it will also create a need for midstream infrastructure investments to move production of oil and gas to consuming refineries, including Marathon Petroleum's refineries.
And then in addition to the shale growth, what's going on in...
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
- Commodity Markets
- Investment & Company Information
- Master Limited Partnerships
- Marathon Petroleum Corporation