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TNRH: The MLP Digest - Issue Of 1/29/2018, Brought To You By Laurentian Research

Summary

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Designed to inform the income-oriented members of the TNRH community of the latest development in the space, this issue is distributed to Laurentian Research followers as a compliment.

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Press & Presentations

  • NuStar Energy L.P. (NS) and NuStar GP Holdings, LLC (NSH) announced that they will host a joint conference call on Thursday, February 8, 2018 at 9:00 a.m. Central Time to discuss the fourth quarter 2017 earnings results, which will be released earlier that day. The conference call may be accessed by dialing toll-free 844/889-7787, reservation passcode 2577134. International callers may access the conference call by dialing 661/378-9931, reservation passcode 2577134.
  • Enbridge Inc. (ENB)(Enbridge (EEP)) will host a joint conference call and webcast with Enbridge Income Fund Holdings Inc. (OTC:EBGUF), Enbridge Energy Partners, L.P. (EEP) and Spectra Energy Partners, LP (SEP) to provide an enterprise-wide business update and review 2017 fourth quarter and year-end financial results on February 16, 2018 at 7:00 a.m. MT (9:00 a.m. ET).

  • On Jan. 29, 2018, Dominion Midstream (DM): Q4 EPS of $0.33 misses by $0.04. Revenue of $121.3M (-31.7% Y/Y) beats by $9.92M. Press Release.

Operations

  • On Jan. 22, 2018, Energy Transfer Partners’ (ETP) Rover Pipeline is moving towards completion but Ohio environmental regulators are seeking again to slow it down over renewed concerns about the potential for a spill. A 2M-gallon drilling fluid spill last April into the wetlands near their Tuscarawas River in Ohio caused the FERC to suspend all non-active horizontal drilling sites until the project could undergo a complete audit before reauthorized Rover to resume activities, including at the incomplete Tuscarawas site; the Ohio EPA now argues that Rover again is pumping too much drilling fluid into the Tuscarawas and is risking another spill. The $4.2B Rover pipeline is designed to carry up to 3.25B cf/day of gas from the Marcellus and Utica shale fields in Pennsylvania, Ohio and West Virginia to the U.S. Midwest and Canada; ETP said last week that it expects to finish the project by the end of Q1. On Jan. 24, 2018, Energy Transfer Partners says it has stopped drilling under the Tuscarawas river in Ohio at its Rover natural gas pipeline project in response to an order from the Federal Energy Regulatory Commission.

  • On Jan. 22, 2018, Matador Resources (MTDR) announced a new strategic partnership with Plains All American Pipeline (PAA) to gather and transport crude oil for MTDR and other producers in the Rustler Breaks asset area in New Mexico. The agreement also includes a joint tariff arrangement to offer third-party producers located within a joint development area of ~400K acres in crude oil transportation services from the wellhead to Midland, Tex., with access to other end markets, such as Cushing, Okla., and the Gulf Coast. With Delaware Basin transportation costs rising, MTDR says it expects to amass "substantial" savings by transporting increasing volumes of its oil by pipeline. Plains is expecting to complete a mainline extension from its current long-haul pipeline system in Texas during Q2 or Q3.

  • On Jan. 22, 2018, Plains All American Pipeline (PAA) says it received sufficient binding commitments on its initial open season and will proceed with construction of the Cactus II pipeline system connecting the Permian Basin to Corpus Christi, TX. The Cactus II system would add two pipelines to PAA's existing Cactus network, expanding crude capacity by as much as 585K bbl/day from 390K bbl/day currently; PAA hopes to complete the project by Q3 2019. PAA says it also received sufficient customer interest to conduct a second binding open season related to Cactus II.

  • On Jan. 23, 2018, Trafigura says it signed a long-term agreement with Plains All American Pipeline (PAA) to transport 300K bbl/day of crude oil from the Permian Basin to the Texas port of Corpus Christi. The commitment is expected to begin in Q3 2019 with the start-up of the Cactus II Pipeline, which PAA said yesterday had received sufficient binding commitments on its initial open season to justify proceeding with construction of the project. Trafigura, a top 3 independent oil trader, has emerged as one of the top exporters of U.S. crude since restrictions were lifted on overseas sales two years ago; it also co-owns an export terminal at Corpus Christi with Buckeye Partners and has exclusive shipping rights.

Capital Market

  • On Jan. 22, 2018, Philadelphia Energy Solutions (ETP, CG) says its plan to emerge from bankruptcy depends on whether it can shed existing biofuel obligations under U.S. renewable fuel laws. PES is ~267M credits short of complying with the U.S. Renewable Fuel Standard program and will be in jeopardy if the bankruptcy court forces it to comply with existing RFS obligations, according to its Chapter 11 bankruptcy filing. The bankruptcy of the owner of the largest U.S. east coast refinery sets up the latest debate between U.S. refiners and ethanol producers over renewables policy.

  • On Jan. 22, 2018, Enbridge Inc. (ENB) and Spectra Energy Partners, LP (SEP) announced the execution of a definitive agreement, resulting in Enbridge converting all of its incentive distribution rights (IDRs) and general partner (GP) economic interests in SEP into 172.5 million newly issued SEP common units. As part of the transaction, all of the IDRs have been eliminated. The 172.5 million newly issued SEP common units have a value of approximately US$7.2 billion based on the volume-weighted average price of SEP common units over the past twenty days. The transaction value represents a multiple of 15.7x forecast 2018 GP/IDR cash flow and is expected to be breakeven to SEP's distributable cash flow per common unit by the second half of 2019 and be accretive thereafter. Enbridge now holds a non-economic GP interest in SEP and owns approximately 403 million SEP common units, representing approximately 83% of SEP's outstanding common units.

  • On Jan. 25, 2018, Sunoco (SUN) announces a deal to re-acquire all $300M of its outstanding Series A preferred equity held by Energy Transfer Equity (ETE -0.1%). SUN also will pay a 1% redemption premium for the securities plus accrued interest, boosting its total outlay to $316.2M. ETE says it plans to use net proceeds from the deal to repay debt owed under its revolving credit facility.

Capital Projects and M&A

  • On Jan. 22, 2018, it was reported that the PennEast pipeline is approved by the FERC but still faces significant obstacles before construction, which the consortium hopes to begin this year. The 116-mile pipeline is designed to provide up to 1.1M dekatherms/day from the Marcellus Shale region to communities in Pennsylvania and New Jersey, where shippers like PSEG Power have secured 90% of the pipeline’s transportation capacity. New Jersey's environmental review process could block the pipeline under the Clean Water Act by refusing to issue a 401 permit, as the pipeline intends to cross through 38 of the state's cleanest streams; analysts believe this is the biggest threat to the project’s 2019 start date. PennEast is a JV owned equally by AGL Resources (SO), New Jersey Resources (NJR), South Jersey Industries (SJI), Spectra Energy Partners (SEP) and UGI Corp. (UGI).

  • On Jan. 26, 2018, Hess Midstream Partners (HESM) and Targa Resources (TRGP) form a 50/50 joint venture to build a 200M cf/day dry gas processing plantnear Targa’s existing Little Missouri facility in North Dakota. HESM and Hess Infrastructure Partners say they will contribute half of the $150M construction costs and invest another ~$100M toward new pipeline infrastructure. HESM says the new plant will augment its total Bakken gas processing capacity to 350M cf/day and boost export capabilities north and south of the Missouri River, and the company will retain the option to further expand processing capacity by de-bottlenecking the Tioga gas plant.

Distribution

Company Ticker Dividends Up Forward yield Payable On record ex-div
CSI Compressco (CCLP) $0.1875 quarterly 0% 11.03% Feb. 14 Feb. 1
Western Gas Partners (WES) $0.92 quarterly 1.7% 7.03% Feb. 13 Feb. 1
Archrock Partners (APLP) $0.285 quarterly 0% 8.15% Feb. 13 Feb. 8
EQT GP Holdings (EQGP) $0.244 quarterly 7% 3.41% Feb. 23 Feb. 2
EQT Midstream Partners (EQM) $1.025 quarterly 4.6% 5.37% Feb. 14 Feb. 2
EnLink Midstream Partners (ENLK) $0.39 quarterly 0% 9.13% Feb. 13 Jan. 31
Martin Midstream Partners (MMLP) $0.50 quarterly 0% 13.11% Feb. 14 Feb. 7
Hoegh LNG Partners LP (HMLP) $0.43 quarterly 0% 9.01% Feb. 14 Feb. 1
Crestwood Equity (CEQP) $0.60 quarterly 0% 8.73% Feb. 14 Feb. 7
Star Gas (SGU) $0.11 quarterly 0% 4.07% Feb. 6 Jan. 29
Dorchester Minerals (DMLP) $0.386915 quarterly 35.9% 10.02% Feb. 8 Jan. 29
BP Midstream Partners (BPMP) $0.1798 quarterly 0% 4.77% Feb. 15 Feb. 1
Phillips 66 Partners (PSXP) $0.678 quarterly 5% 4.95% Feb. 13 Jan. 31
Capital Product Partners (CPLP) $0.08 quarterly 0% 9.17% Feb. 13 Feb. 2
Antero Midstream (AM)

$0.365 quarterly

30% 4.61% February 13 February 1
AMGP GP LLC (AMGP) $0.075 quarterly 27% 1.45% February 20 February 1
Trans Montaigne Partners L.P. (TLP)

$0.77 quarterly

2.0% 7.34% February 8 January 31
USA Compression Partners (USAC) $0.525 quarterly 0% 11.44% Feb. 14 Feb. 2
Western Gas Partners, LP (WES)

$0.920 quarterly

2% 6.92% February 13 February 1
Western Gas Equity Partners, LP (WGP) $0.54875 quarterly 2% 5.32% February 22 February 1
Williams Partners (WPZ) $0.60 quarterly 0% 5.5% Feb. 9 Feb. 2
CNX Midstream Partners LP (CNXM) $0.3133 quarterly 3.6% 6.42% February 14 February 5
CSI Compressco LP (CCLP) $0.1875 quarterly 0% 10.90% February 14 February 1
Navios Maritime (NAP) $0.4225 quarterly 0% 17.4% Feb. 14 Feb. 9
Blueknight Energy Partners (BKEP) $0.145 quarterly 0% 10.36% Feb. 14 Feb. 2
Hess Midstream Partners (HESM) $0.3218 quarterly 3.6% 5.92% Feb. 13 Feb. 2
DCP Midstream (DCP) $0.78 quarterly 0% 7.4% Feb. 14 Feb. 7
Delek Logistics Partners (DKL) $0.725 quarterly 1.4% 8.84% Feb. 12 Feb. 2
TC PipeLines (TCP) $1.00 quarterly 0% 7.07% Feb. 13 Feb. 2
Magellan Midstream Partners (MMP) $0.92 quarterly 1.7% 4.89% Feb. 14 Feb. 6
NGL Energy Partners (NGL) $0.39 quarterly 0% 9.07% Feb. 14 Feb. 6
Valero Energy Partners
$0.5075 quarterly 5.7% 4.33% Feb. 13 Feb. 5
AmeriGas Partners (APU) $0.95 quarterly 0% 7.95% Feb. 20 Feb. 9
Sunoco LP (SUN) 0.8255 quarterly 0% 10.15% Feb. 14 Feb. 6
Suburban Propane Partners (SPH) $0.60 quarterly 0% 9.65% Feb. 13 Feb. 6
Shell Midstream Partners (SHLX) $0.333 quarterly 4.7% 4.41% Feb. 14 Feb. 5
Noble Midstream Partners LP (NBLX) $0.4883 quarterly 4.7% 3.53% Feb. 12 Feb. 5
Dominion Midstream (DM) $0.3180 quarterly 5.1% 4.02% Feb. 15 Feb. 5
Summit Midstream (SMLP) $0.575 quarterly 0% 10.27% Feb. 14 Feb. 7
Golar LNG Partners (GMLP) 0.5775 quarterly 0% 10.08% Feb. 14 Feb. 7
Cypress Energy (CELP) $0.21 quarterly 0% 11.76% Feb. 14 Feb. 7
Sprague Resources (SRLP) $0.6375 quarterly 2.4% 9.86% Feb. 12 Feb. 6 Feb. 5
Holly Energy (HEP) $0.65 quarterly 0.8% 8.13% Feb. 14 Feb. 5 Feb. 2
MPLX (MPLX) $0.6075 quarterly 3.4% 6.25% Feb. 14 Feb. 5 Feb. 2
American Midstream Partners (AMID) $0.4125 quarterly 0% 11.0% Feb. 14 Feb 7 Feb 6
Kimbell Royalty Partners (KRP) $0.36 quarterly 16.1% 7.7% Feb. 14 Feb. 7 Feb 6
Westlake Chemical (WLKP) $0.3864 quarterly 2.9% 6.37% Feb. 23 Feb. 8 Feb 7
NuStar GP (NSH) $0.545 quarterly 0% 11.75% Feb. 15 Feb. 8 Feb 7
NuStar (NS) $1.095 quarterly 0% 12.57% Feb. 13 Feb 8 Feb 7
Global Partners (GLP) $0.4625 quarterly 0% 10.28% Feb. 14 Feb. 9 Feb 8

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