Master Limited Partnerships: Natural Gas Gathering, Crude Oil Shipment

Link to SeekingAlpha.com: MLPs.

According to PIMCO, the pipelines segment of the energy sector is attractive because of "strong asset quality, long-term contracts, noncyclical cash flows and significant growth in pipeline capacity."

Indeed, pipeline owners have stable business models that depend more on the volume of transported products than on product prices.

That is exactly why, despite the plunge in natural gas prices caused by the surge in the supply, pipeline operators have continued to grow their top and bottom lines. Moreover, margins are not under the pressure, as the competitive pressures are almost absent because pipeline operators usually service different geographical areas.

(Still, it should be noted that some pipeline operators may include the gathering and processing operations, which do expose them to short-term fluctuations in commodity prices).

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