Investing in Master Limited Partnerships | MlpInvestor.com » Energy

How NGLs are Shaping the Future

MLPInvestor — Sat, 08 Oct 2011 14:56:48 +0000

The investment site SeekingAlpha.com has an excellent article on how natural gas liquids (NGLs) are changing the global energy landscape, and how this can impact MLPs. I have included the link below.

US NGLs Could Reshape Global Economy

Investing in MLPs: An Update on the MLP Universe

MLPInvestor — Tue, 13 Sep 2011 16:18:24 +0000

We haven’t posted in quite a while (that trend will change – I promise), so I thought I’d give a brief update on the state of the MLP universe for our readers. While the US economy remains a bit shaky, the bottom line is that MLPs have continued to grow over the long term. They are also well positioned to benefit from changes that are occurring in the oil and gas space.

MLP Investment Continues to Grow

Investment in MLPs continues to grow over time. In fact, the Alerian MLP index hit a historical high of 390.02 in April of this year. That translates into a very robust 5-year annual return of roughly 17%. While the index is currently hovering around 349, this still represents tremendous long term growth (especially given the current economic climate).

The Future is Unconventional Reserves

But the bigger story here is the continued long term potential for growth in the MLP space. Unconventional oil and gas reserves are the future of domestic energy in the United States. New technologies for extracting oil and gas from shale will drive demand for infrastructure (namely pipelines). In fact, INGAA analysts estimate over $200 billion in new natural gas infrastructure will be built by 2035. That means big returns for MLP investors moving forward.

Barron’s: Pipelines, Infrastructure to Shine in Downturn

MLPInvestor — Sat, 27 Sep 2008 12:30:03 +0000

Barron’s published an interesting interview with Jay Rosenberg, manager of the First American Global Infrastructure fund. According to Rosenberg, pipelines and infrastructure related companies are attractive in the current economic environment because they offer stable cash flows. Specifically, Rosenberg says:

…we are generally much more focused on those companies that transport petroleum — both crude refined products — and natural gas. But they do so in a way that is very contractual in nature and where their earnings don’t fluctuate very much based on the volumes that they are shipping. The company that best typifies what I’m talking about would be Enbridge (ENB), in particular because of the contractual nature of its gas load. Another company that we like in is Kinder Morgan …whose institutional shares (KMR) we own. Kinder Morgan has a fantastic portfolio of pipeline assets but also has some of the best unique storage assets in the US…

Related Links:

Barron’s Article (subscription may be required)

Worldwide Natural Gas Growth To Continue in ’08

MLPInvestor — Wed, 12 Dec 2007 00:18:40 +0000

Financial publication The Economist recently released its annual World in 2008 edition, in which it predicts natural gas to grow a healthy 3.4% in 2008. Further, per the article, the International Energy Agency expects natural gas to become the 2nd largest primary energy source worldwide by the year 2015.

NRG Applies to Build More Nukes in Texas

MLPInvestor — Tue, 25 Sep 2007 13:16:32 +0000

Per the Wall Street Journal, NRG, Inc. is planning to submit an application to the Nuclear Regulatory Commission to build 2 new reactors at the South Texas nuclear station. The problem: NRG has never built a nuclear plant before. The move comes as many energy companies scramble to qualify for federal incentives outlined in the Energy Policy Act of 2005.

While many agree nuclear power is much cleaner than more traditional energy sources, the risks of operating these plants can be substantial. Domestic terrorism immediately comes to mind – but an attack on a nuclear facility is very unlikely. However, as we saw at Chernobyl, accidents pose a huge risk and can be extremely devastating – rendering entire areas uninhabitable. When you also consider the fact that the US doesn’t even have a repository today for disposing of radioactive waste from existing reactors, the nuclear option seems less attractive. In my opinion, we need to think long and hard before we jump in head first on this one.