Positive Long-Term Sentiment for MLP Space: An Expert Analyst Discusses His Outlook with The Wall Street Transcript

Wall Street Transcript

67 WALL STREET, New York - March 26, 2013 - 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 - Oil and Gas Transportation Infrastructure Demand - Master Limited Partnerships Distribution Growth - Outlook for Natural Gas Liquids - Low Treasury Yields and MLP Dividends

Companies include: Energy Transfer Partners L.P. (ETP), Kinder Morgan Energy Partners (KMP), El Paso Pipeline Partners, L.P (EPB), Copano Energy LLC (CPNO), Sunoco Logistics Partners LP (SXL), Enterprise Products Partners L (EPD), EV Energy Partners LP (EVEP), Linn Energy, LLC (LINE), Atlas Pipeline Partners LP (APL), Plains All American Pipeline L (PAA), Dow Chemical Co. (DOW), Targa Resources Partners LP (NGLS) and many more.

In the following excerpt from the Oil & Gas: Master Limited Partnerships Report, an expert analyst discusses the outlook for the sector for investors:

TWST: Beyond what we've already discussed, are there any other important industry trends you'd like to note?

Mr. Bellamy: They're highly inter-related, but the weakness in natural gas prices is of extreme importance to investors of all stripes, not just energy investors. Weak gas prices have set up a number of different arbitrage opportunities, both in physical and financial markets, not least of which is the huge benefits that low natural gas prices provide to domestic consumers of natural gas in every sector - residential, commercial, transportation, industrial.

We are on the cusp of seeing a huge buildout and conversion to natural-gas-fired electric-power generation; that will take some time, but it's meaningful as we move from coal to gas.

There is, at present, a huge debate about the amount of LNG exports that the U.S. will do. Entrenched domestic industries, particularly some chemical companies like Dow (DOW), would like to limit LNG exports to limit any potential future rise in natural gas prices. There is a huge difference in domestic natural gas prices and European or Japanese prices now, which creates an opportunity for U.S. producers to sell gas overseas.

To the extent that LNG exports are stopped politically, that is potentially a headwind for a gas price recovery. Natural gas transportation has still failed to really take hold in a big way, mainly because there's such momentum in our existing transportation infrastructure. But if we see continued low gas prices, the prevalence and stability of the variant between diesel fuel and natural gas is likely to continue to encourage new fuel switching, particularly for fleet vehicles, into natural gas.

Similarly, we've seen a domestic oversupply situation in natural gas liquids, which includes ethane, propane, butane, isobutane and natural gasoline. That's leading to propane exports on the Gulf Coast by Targa (NGLS) and Enterprise. If LNG exports...

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.

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