MLP Protocol 090613

Key Adjustments:

Adjusted SunCoke Energy Partners (SXCP) for its acquisition of Lakeshore Coal Handling Corporation on August 30, 2013. SXCP purchased Lakeshore from privately held Beemsterboer Corporation for an all cash price of $28.6 million. (Press Release)

Adjusted NGL Energy Partners (NGL) for its acquisition of the water disposal business of Coastal Plains Disposal #1, LLC, a Texas limited liability company (“Coastal Plains”), owned by WinCo Development, LLC, a Texas limited liability company, for 222,381 common units and $109.5 million in cash. (Press Release)

News Items:

On September 3, PVR Partners (PVR) announced that it has entered into a definitive agreement with Hess Corporation (HES) to construct, own and operate a 45-mile natural gas trunkline and associated gathering pipelines and facilities servicing Hess’s lean gas production in the Utica Shale in eastern Ohio. PVR expects the total capital investment for the trunkline, initial gathering lines, compression stations and dehydration facilities to be in the range of $125-150 million, and expects to invest approximately $10 million during the remainder of 2013, and approximately $50 million during the first half of 2014 and $50 during the second half of 2014, with the balance in 2015. (Press Release)

On September 3, Navios Maritime Partners (NMM) announced that it has chartered out the Navios Joy, a newbuilding Capesize vessel for three years. The Navios Joy has been chartered out to an investment grade counterparty for three years at a rate of $19,000 net per day ($20,000 gross). The charterer has been granted an option to extend the charter for two optional years, the first at $22,325 (net) per day and the second at $25,650 (net) per day. (Press Release)

Construction of the approximately 141-mile, 16-inch diameter Parkway Pipeline, a 50-50 joint venture between Kinder Morgan Energy Partners (KMP) and Valero Energy (VLO), is complete and is now transporting refined petroleum products from refineries in Norco, La., to an existing petroleum transportation hub in Collins, Miss., owned by Plantation Pipe Line Company. Kinder Morgan owns 51% of Plantation Pipe Line Company and operates the system. From this hub the products will be transported by multiple pipeline systems, including Plantation, that serve major markets in the eastern United States. The approximately $250 million pipeline system has an initial capacity of 110,000 barrels per day (bpd) with the ability to expand to over 200,000 bpd. (Press Release)

On September 3, Energy Transfer Partners (ETP) announced that effective September 1, 2013, the sale of the assets of Missouri Gas Energy (MGE) to Laclede Gas Company, a subsidiary of The Laclede Group  (LG), was completed for $975 million. (Press Release)

On September 4, Inergy Midstream (NRGM) and Enserco Midstream, LLC (“Enserco Midstream”) announced that they have formed a 50-50 joint venture to own and operate a crude oil rail terminal located in Douglas County, Wyoming (“Douglas Facility”). The Douglas Facility was placed into manifest service in August 2013, and unit train service is expected to begin during the first quarter of 2014. (Press Release)

On September 4, Hedgeye reiterated their Short Call on KMI, KMP, KMR and EPB as their new “Best Short Idea” and stated that they would release their report on September 10. This appears to be some of the cause for the weakness in the names starting that day, although Hedgeye has been negative on the Kinder Morgan group since some time back in early August.

On September 5, Targa Resources Partners (NGLS) announced that it experienced a fire at the Saunders gas processing facility in Lea County, New Mexico. All workers have been accounted for. Emergency services were notified and arrived promptly on-site. The fire was contained and surrounding roads were secured and monitored by emergency personnel. The fire is now out, and TMS will begin to assess damage to the facility. The Partnership’s ownership in the facility is held in a joint venture that is 63% owned by the Partnership and 37% owned by Chevron U.S.A. Inc. TMS serves as the operator of the Versado system. Saunders is the smallest gas processing plant in the Versado system, with approximately 70 MMcf/d of the Versado system’s approximately 280 MMcf/d gross processing capacity.(Press Release)

On September 5, Petrologistics (PDH) filed a mixed shelf registration that included starting to register 85.7 million units (~61.6% of PDH’s total LP units) held by their Sponsors, so a possible warning that the Sponsors may look to sell additional units at some point soon. (Filing)

On September 6, Buckeye Partners had a 4 million unit block trade at $66.95 (down 3.1% from prior close) and JPMorgan downgraded BPL to Neutral from Overweight, which may partially explain the price weakness in the units on Friday. (Please scroll page down to see News Items)

The MLP Protocol Monthly Analytics Report for September is now available, the October 2013 report will be available the weekend of September 27.

MLP Protocol Weekly Snapshot report: (click to open) MLPP 090613 Snapshot vFree

About Philip Trinder

President of MLP Protocol, investor, trader, and proponent of Master Limited Partnerships.
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