Energy Transfer LP (NYSE: ET-PI)

Energy Transfer LP is a Delaware limited partnership that operates as a diversified midstream energy partnership engaged in natural gas transportation storage gathering processing and crude oil NGL and refined products transportation terminalling and marketing as well as LNG regasification.

Revenue is generated from fees charged for natural gas transportation and storage including demand fees for reserved capacity transportation fees based on actual throughput and fuel retention percentages. Additional income comes from the sale of natural gas to utilities power generators industrial end users and marketing companies. The NGL and refined products segment earns fees under dedicated contracts or contracts with minimum throughput commitments storage throughput fees and export activities. Crude oil pipelines generate tariffs paid by shippers. Acquisition and marketing activities contribute revenues from buying selling and transporting crude oil and NGLs. The midstream segment earns margins from gathering transporting processing and selling natural gas and NGL volumes. USAC provides compression services under fixed fee contracts delivering stable cash flows. Sunoco LP distributes motor fuels and petroleum products generating revenues from retail wholesale and refinery operations. Energy Transfer also receives cash distributions from its investments in Sunoco LP and USAC based on their earnings and available cash.

The company operates through the following segments.

• Intrastate Transportation and Storage Segment owns and operates approximately 12 200 miles of intrastate natural gas transportation pipelines with about 24 Bcf per day of transportation capacity and natural gas storage facilities in Texas and Oklahoma earning revenue from demand fees transportation fees fuel retention and the sale of natural gas to industrial end users utilities power generators and storage customers.

• Interstate Transportation and Storage Segment owns and operates roughly 20 090 miles of interstate natural gas pipelines plus joint venture interests covering another 7 080 miles with combined transportation capacity of about 20.1 Bcf per day and includes the Lake Charles LNG import terminal and regasification facility earning revenue from transportation and storage services regulated by FERC and serving industrial end users other pipelines utilities and power generators.

• Midstream Segment owns and operates natural gas gathering compression treating dehydration and processing facilities with an aggregate processing capacity of approximately 13.5 Bcf per day across major producing basins earning revenue from margins on gathered transported purchased and sold natural gas and NGL volumes processed at its plants.

• NGL and Refined Products Transportation and Services Segment owns about 5 750 miles of NGL pipelines fractionation capacity of 1.15 million barrels per day and working storage capacity of approximately 63 million barrels at the Mont Belvieu complex plus additional storage assets earning revenue from fees under dedicated contracts contracts with minimum throughput commitments storage throughput fees export activities marketing and processing fractionating refinery off gas.

• Crude Oil Transportation and Services Segment owns and operates more than 18 000 miles of crude oil trunk and gathering pipelines terminals with aggregate storage capacity of about 73 million barrels earning revenue from tariffs paid by shippers acquisition and marketing activities and serving refiners traders and other crude oil market participants.

• All Other Segment includes gas marketing activities wholesale power trading natural gas compression equipment business Dual Drive Technologies coal and natural resources royalties land management timber leasing coal infrastructure and oil and gas royalty earnings generating revenue from fee based arrangements storage fees and various service fees.

Energy Transfer LP holds a prominent position in the U S midstream sector due to its extensive pipeline network substantial storage capacity and diversified asset base across natural gas NGL crude oil and LNG businesses. It competes with other pipeline operators integrated energy companies rail and truck transporters and storage facility providers. Competitive advantages stem from its scale geographic integration fee based revenue streams and ability to offer negotiated and cost based rates.

The company serves a broad range of customers including industrial end users utilities power generators local distribution companies independent power producers petrochemical companies refiners marketing companies and Shell under long term LNG contracts.