Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Energy Transfer Operating, L.P. | d8k.htm |
| EX-99.1 - PRESS RELEASE DATED JUNE 28, 2010 - Energy Transfer Operating, L.P. | dex991.htm |
 Acquisition of Texon’s
Butane Blending Business
June 2010
Exhibit 99.2 |
 Forward-Looking Statements
You should review this slide presentation in conjunction with the conference call for
Sunoco Logistics Partners L.P., held on June 29 at 9:00 a.m. EDT. You may
listen to the audio portion of the conference
call
on
our
website
at
www.sunocologistics.com
or
by
dialing
(USA
toll-free)
1-888-889-4955.
International callers should dial 1-312-470-0130. Please request
“Sunoco Logistics Partners’ Conference Call Passcode: Sunoco
Logistics. Audio replays of the conference call will be available for two
weeks after the conference call beginning approximately two hours following
the completion of the call. To access the replay, dial 1-
888-568-0673. International callers should dial
1-203-369-3190. During the call, those statements we make
that are not historical facts are forward-looking statements.
Although we believe the assumptions underlying these statements are reasonable,
investors are cautioned that such forward-looking statements involve risks that
may affect our business prospects and performance, causing actual results to
differ from those discussed during the conference call. Such risks and
uncertainties include, among other things: our ability to successfully
consummate announced acquisitions and organic growth projects and integrate them into
existing business
operations;
the
ability
of
announced
acquisitions
to
be
cash-flow
accretive;
increased
competition; changes in the demand both for crude oil that we buy and sell, as well
as for crude oil and refined products that we store and distribute; the loss
of a major customer; changes in our tariff rates; changes in throughput of
third-party pipelines that connect to our pipelines and terminals; changes in
operating conditions and costs; changes in the level of environmental remediation
spending; potential equipment malfunction; potential labor relations problems;
the legislative or regulatory environment; plant construction/repair delays;
and political and economic conditions, including the impact of potential
terrorist acts and international hostilities. These
and
other
applicable
risks
and
uncertainties
are
described
more
fully
in
our
Form
10-K,
filed with the Securities and Exchange Commission on February 23, 2010. We
undertake no obligation to update publicly any forward-looking statements
whether as a result of new information or future events.
2 |
 Sunoco
Logistics Asset Overview 3
Serves key U.S. refining and
production centers in U.S.
Northeast, Midwest, and Gulf
Coast
2,200 miles of refined product
pipelines
3,850 miles of crude oil
pipelines
41 active refined products
terminals
23 million barrels of crude oil
storage capacity (including 20
million barrels at Nederland,
TX)
Completed and integrated 15
acquisitions since 2002 |
 $182MM
53%
$58MM
17%
$103MM
30%
Growth Strategy
Optimize current asset base
Invest in organic extensions
Acquire complementary assets
continue focus on platform growth
Initiate refined product commercial
activities in 2010
$22MM
23%
$ 35MM
36%
$40MM
41%
4
Financial Growth
Refined Products Pipeline System
Terminal Facilities
Crude Oil Pipeline System
2009 EBITDA $343MM
2002 EBITDA $97MM |
 5
Organic growth opportunities accelerate:
Biodiesel
New terminal at Aldine, TX
Crude pipeline to products pipeline
conversion to supply Longview, TX
Marcellus Shale Mariner project
Refined Products Terminals are
increasingly becoming blend sites as a
result of alternative fuel mandates and
opportunities:
Current blending activities are for
additives, ethanol, biodiesel, and butane
blending
Future blending activity will be ethanol
(E10, E15, E85), butane, bioheat,
biodiesel, and cellulosic biofuel
Refined Products Strategic Investment Platform
5 |
 Texon
Butane Blending Business Purchase price of $140MM
Patented blend technology for sophisticated butane blending into
gasoline to capture margin spread between gasoline and butane
Sunoco Logistics has utilized the patented technology since 2009
Key Texon personnel are joining Sunoco Logistics
Business is a turnkey, full service offering to customers
Service for customers includes:
•
purchase and management of butane supply
•
installation and monitoring of butane injection equipment
Growing cash flow base that is immediately accretive
6 |
 Patented Truck Rack Butane Blending System
7 |
 Texon
Acquisition Strategic
Rationale
for
Acquisition
Logical extension of SXL’s current refined products terminalling
services business where we blend additives, ethanol, biodiesel, and
butane
A new growth platform that is aligned with our current core business
and is well understood with our existing sites
Extensive operating synergies with current operations (engineering,
construction, butane supply management, product quality
monitoring)
Growth potential is largely driven by the addition of new sites
Plan to install at all of our key gasoline terminals
Several
large
customers
are
interested
in
expanding
their
number
of installations
Revenue generated from margin between gasoline and butane
8 |
 Texon
Acquisition Key
Drivers
of
the
Business
Volume blended
Significant opportunity for growth in terminal sites: customers
are attracted by sophisticated blending which ensures rigorous
adherence to product specifications
SXL can add value by accelerating growth
Margin between gasoline and butane prices
Business model will lock in a favorable margin between butane
and gasoline and remove commodity risk
SXL can add value on butane supply
Growth in natural gas from shale regions will increase the
supply of butane which will sustain or improve current
gasoline/butane margins
9 |
 Texon
Acquisition Financial
Characteristics
Acquisition will be immediately accretive with 2011 EBITDA at a
typical acquisition multiple
Addition of new blend sites will translate to outstanding EBITDA
growth potential
Cash distributions will be based on conservative margin assumptions
Sunoco, Inc. will provide a $100MM three year loan at market rates to
provide further accretion in early years, demonstrating Sunoco’s
continued support of growth in SXL
10 |
 Texon
Acquisition Summary
The
Texon
acquisition
will
further
strengthen
our
geographically
diverse
asset base
The patented technology will enhance our ability to grow terminal
services at SXL and other customer locations
Greatly enhances the profitability of gasoline terminals and is an
important feature in future terminal acquisitions
An experienced management team at Sunoco Logistics, including former
Texon
personnel,
will
be
able
to
capitalize
on
the
opportunity
to
add
real
growth and unitholder
value
Our investment grade credit rating and flexible capital structure will
facilitate the growth potential of this acquisition
Cash flow from the transaction will serve to support our consistent track
record of distribution growth
11 |