UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
November 21, 2016 | ||
Date of Report (Date of earliest event reported) | ||
ENERGY TRANSFER PARTNERS, L.P. | ||
(Exact name of Registrant as specified in its charter) | ||
Delaware | 1-11727 | 73-1493906 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
8111 Westchester Drive, Suite 600, Dallas, Texas 75225 |
(Address of principal executive offices) (Zip Code) |
(214) 981-0700 |
(Registrant’s telephone number, including area code) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
x Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
x | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01. Regulation FD Disclosure.
As previously reported, on November 21, 2016, Energy Transfer Partners, L.P. (“ETP”) and Sunoco Logistics Partners L.P. (“SXL”) issued a press release announcing their entry into a definitive merger agreement pursuant to which a wholly-owned subsidiary of SXL will merge with and into ETP, with ETP continuing as the surviving entity and wholly-owned subsidiary of SXL. ETP has posted to its corporate website an investor presentation related to the transactions contemplated by the merger agreement, which is included as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated into this Item 7.01 by reference.
In accordance with General Instruction B.2 of Form 8-K, the information set forth in this Item 7.01 and the attached Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
Item 8.01. Results of Operations and Financial Condition.
To the extent required, the information included in Item 7.01 of this Form 8-K is incorporated into this Item 8.01.
Cautionary Statement Regarding Forward-Looking Statements
This report includes “forward-looking” statements. Forward-looking statements are identified as any statement that does not relate strictly to historical or current facts. Statements using words such as “anticipate,” “believe,” “intend,” “project,” “plan,” “expect,” “continue,” “estimate,” “goal,” “forecast,” “may” or similar expressions help identify forward-looking statements. SXL and ETP cannot give any assurance that expectations and projections about future events will prove to be correct. Forward-looking statements are subject to a variety of risks, uncertainties and assumptions. These risks and uncertainties include the risks that the proposed transaction may not be consummated or the benefits contemplated therefrom may not be realized. Additional risks include: the ability to obtain requisite regulatory and unitholder approval and the satisfaction of the other conditions to the consummation of the proposed transaction, the ability of SXL to successfully integrate ETP's operations and employees and realize anticipated synergies and cost savings, the potential impact of the announcement or consummation of the proposed transaction on relationships, including with employees, suppliers, customers, competitors and credit rating agencies, the ability to achieve revenue, DCF and EBITDA growth, and volatility in the price of oil, natural gas, and natural gas liquids. Actual results and outcomes may differ materially from those expressed in such forward-looking statements. These and other risks and uncertainties are discussed in more detail in filings made by SXL and ETP with the Securities and Exchange Commission (the “SEC”), which are available to the public. SXL and ETP undertake no obligation to update publicly or to revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Additional Information and Where to Find It
SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND THE REGISTRATION STATEMENT REGARDING THE TRANSACTION CAREFULLY WHEN IT BECOMES AVAILABLE. These documents (when they become available), and any other documents filed by SXL or ETP with the SEC, may be obtained free of charge at the SEC’s website, at www.sec.gov. In addition, investors and security holders will be able to obtain free copies of the registration statement and the proxy statement/prospectus by phone, e-mail or written request by contacting the investor relations department of SXL or ETP at the following:
Sunoco Logistics Partners L.P. | Energy Transfer Partners, L.P. | |
3807 West Chester Pike | 8111 Westchester Drive | |
Newtown Square, PA 19073 | Dallas, TX 75225 | |
Attention: Investor Relations | Attention: Investor Relations | |
Phone: 866-248-4344 | Phone: 214-981-0700 | |
Email: IR@sunocologistics.com | Email: InvestorRelations@energytransfer.com | |
Participants in the Solicitation
SXL, ETP and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in connection with the proposed merger. Information regarding the directors and executive officers of SXL is contained in SXL’s Form 10-K for the year ended December 31, 2015, which was filed with the SEC on February 26, 2016. Information regarding the directors and executive officers of ETP is contained in ETP’s Form 10-K for the year ended December 31, 2015, which was filed with the SEC on February 29, 2016. Additional information regarding the interests of participants in the solicitation of proxies in connection with the proposed merger will be included in the proxy statement/prospectus.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number | Description of the Exhibit | |
99.1 | Investor Presentation dated November 21, 2016 | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Energy Transfer Partners, L.P.
By: Energy Transfer Partners GP, L.P., its general partner
By: Energy Transfer Partners, L.L.C., its general partner
By: /s/ Thomas E. Long
Thomas E. Long
Chief Financial Officer
Dated: November 21, 2016
EXHIBIT INDEX
Exhibit Number | Description of the Exhibit | |
99.1 | Investor Presentation dated November 21, 2016 | |
Sunoco Logistics Partners L.P.
Energy Transfer Partners, L.P.
SXL / ETP Transaction
November 2016
Forward-Looking Statements
2
Sunoco Logistics Partners L.P.
3807 West Chester Pike
Newtown Square, PA 19073
Attention: Investor Relations
Phone: 866-248-4344
Energy Transfer Partners, L.P.
8111 Westchester Drive, Suite 600
Dallas, TX 75225
Attention: Investor Relations
Phone: 214-981-0700
Participants in the Solicitation
[SXL, ETP and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in connection with the
proposed merger. Information regarding the directors and executive officers of SXL is contained in SXL’s Form 10-K for the year ended December 31,
2015, which was filed with the SEC on February 26, 2016. Information regarding the directors and executive officers of ETP is contained in ETP’s Form 10-
K for the year ended December 31, 2015, which was filed with the SEC on February 29, 2016. Additional information regarding the interests of participants
in the solicitation of proxies in connection with the proposed merger will be included in the proxy statement/prospectus.]
Cautionary Statement Regarding Forward-Looking Statements
This presentation includes “forward-looking” statements. Forward-looking statements are identified as any statement that does not relate strictly to
historical or current facts. Statements using words such as “anticipate,” “believe,” “intend,” “project,” “plan,” “expect,” “continue,” “estimate,” “goal,”
“forecast,” “may” or similar expressions help identify forward-looking statements. SXL and ETP cannot give any assurance that expectations and
projections about future events will prove to be correct. Forward-looking statements are subject to a variety of risks, uncertainties and assumptions. These
risks and uncertainties include the risks that the proposed transaction may not be consummated or the benefits contemplated therefrom may not be
realized. Additional risks include: the ability to obtain requisite regulatory and unitholder approval and the satisfaction of the other conditions to the
consummation of the proposed transaction, the ability of SXL to successfully integrate ETP’s operations and employees and realize anticipated synergies
and cost savings, the potential impact of the announcement or consummation of the proposed transaction on relationships, including with employees,
suppliers, customers, competitors and credit rating agencies, the ability to achieve revenue, DCF and EBITDA growth, and volatility in the price of oil,
natural gas, and natural gas liquids. Actual results and outcomes may differ materially from those expressed in such forward-looking statements. These
and other risks and uncertainties are discussed in more detail in filings made by SXL and ETP with the SEC, which are available to the public. SXL and ETP
undertake no obligation to update publicly or to revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Additional Information and Where to Find It
SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND THE REGISTRATION STATEMENT REGARDING THE
TRANSACTION (THE "TRANSACTION”) INVOLVING SUNOCO LOGISTICS PARTNERS L.P. (“SXL”) and ENERGY TRANSFER PARTNERS, L.P. (“ETP”)
CAREFULLY WHEN IT BECOMES AVAILABLE. These documents (when they become available), and any other documents filed by SXL or ETP with the U.S.
Securities and Exchange Commission (“SEC”), may be obtained free of charge at the SEC’s website, at www.sec.gov. In addition, investors and security
holders will be able to obtain free copies of the registration statement and the proxy statement/prospectus by phone, e-mail or written request by
contacting the investor relations department of SXL or ETP at the following:
Key Transaction Highlights
3
Sunoco Logistics Partners L.P. (“SXL”) and Energy Transfer Partners, L.P. (“ETP”) have entered into a merger agreement providing
for the acquisition of ETP by SXL in a unit-for-unit transaction
– 1.500 SXL common units for each ETP unit, implying a price of $39.29 per unit based on SXL’s closing price immediately
prior to the announcement of the transaction
– That price represents a 10% premium to the volume weighted average price of ETP’s common units for the last 30 trading
days immediately prior to the announcement of the transaction
SXL will assume ETP outstanding debt
– No change of control triggered in ETP’s existing notes
Expected to be immediately accretive to SXL’s distributable cash flow and distribution per unit
Expected to allow the combined partnership to be in position to achieve near-term distribution increases in the low
double digits and a more than 1.0x distribution coverage ratio
SXL’s IDR structure survives following the transaction
– Existing SXL and ETP IDR subsidies remain in place
SXL Common Units and Class B Units held by ETP are retired
– ETP Class H units held by ETE are retired, with ETE owning 100% of the pro forma company’s GP / IDRs
Transaction subject to customary approvals
– ETP unitholder vote
– Expect transaction to close in Q1 2017
Combined company to be called Energy Transfer Partners
CEO, President, CFO and Chief Commercial Officer of combined company will be Kelcy Warren, Matt Ramsey, Tom
Long and Mackie McCrea, respectively
Mike Hennigan and other members of the SXL management team will continue in leading management roles of the
combined company with SXL business remaining headquartered in Philadelphia
TRANSACTION CREATES ONE OF THE LARGEST MLPS BY ENTERPRISE VALUE AND UNLOCKS
VALUE THROUGH LIQUIDS INTEGRATION OPPORTUNITIES
Key Transaction Highlights
4
A “WIN-WIN” FOR ALL STAKEHOLDERS
EXPANDS
STRATEGIC
FOOTPRINT
ENHANCED ABILITY
TO PURSUE
CONTINUED
GROWTH
COMMERCIAL
SYNERGIES AND
INTEGRATION
OPPORTUNITIES
STRONG PRO
FORMA FINANCIAL
PROFILE
Unique opportunity to extend SXL’s strategic footprint further upstream to vertically integrate its NGL and crude
businesses and realize potential benefits of consolidating additional volumes
Potential benefits of additional scale and scope of business, including diversification of basin and product
exposures
Enhanced ability to manage risk associated with large-scale investment opportunities
Strong access to capital markets
Maintain investment grade metrics and attractive funding costs
Existing IDR subsidies remain
Immediately accretive to SXL distributable cash flow and distributions per unit
Expect to achieve near-term distribution increases in low double digits with a more than 1.0x distribution coverage ratio
Investment grade credit profile
Simplified structure
Ability to capitalize on commercial synergies between the businesses and realize potential cost synergies not
available as separate entities
Significant commercial synergies related to Permian basin, Marcellus / Utica basin, and Gulf Coast platforms
Complementary businesses create tremendous value that mitigate commodity price headwinds
Strategic Rationale
Expands SXL’s strategic footprint and integrates the
NGL business closer to the wellhead
More closely aligns ETP’s NGL growth plans with
SXL’s
Increased scale and scope of business
Complementary geographic asset bases
Additional diversification and enhanced ability to
manage risk and large-scale investment opportunities
Enhanced ability to offer wider range of services to the
market
5
Preserves cash for debt reduction and growth capital
funding through implied distribution reduction
Creates the ability to accelerate deleveraging
Increased diversification through the combination of
ETP’s primarily gas focused and SXL’s primarily liquids
focused businesses
Without this transaction, ETP would need to consider a
distribution reduction in the range of 15-25%, subject to
a number of assumptions, in order to reduce leverage
and increase distribution coverage to strengthen ETP’s
financial health and future cash distribution growth
profile
With this transaction, current ETP unitholders will
participate in the expected cash distribution growth of
the combined company
SXL ETP
Benefits to Both Entities
Combination allows for more efficient capitalization of commercial synergies
Combination allows for cost reductions across the two companies
Transaction represents another large step in ETE’s simplification of the family of partnerships
Pro Forma SXL / ETP
(1) Owner and operator of LNG Regasification facility in Lake Charles, LA and expected nucleus of new stand-alone MLP.
Pro Forma Energy Transfer Family Organizational Structure
6
ENERGY TRANSFER
LNG(1)
~0.3% LP
Interest,
100% GP / IDRs
Retail
Marketing
SUNOCO LP
ENERGY TRANSFER EQUITY, L.P.
Intrastate
Transportation &
Storage
~2% LP Interest
100% GP / IDRs
Legend:
Publicly
Traded
MLP
Operating
Business
100%
Interest
~46% LP
Interest
Lake Charles
LNG (Regas)
Lake Charles
LNG
Export Co
60%
Interest
Interstate
Transportation &
Storage
Midstream
Liquids
Transportation
and Services
Refined Products
Natural Gas
Liquids
Crude Oil
Pro Forma
PennTex Midstream
Partners, LP
100% GP / IDRs
~65% LP Interest
Diversified Asset Base Across North America
Drives Opportunity
7
The ability to integrate a producer liquids end-to-end solution will better serve customers and alleviate
bottlenecks currently faced by producers
Optimization Opportunities
• Permian Crude Gathering and
Mainline
• Gulf Coast NGL Projects
• Marcellus NGLs Asset Summary Pro Forma
Pipeline (miles) 71,000
Midstream Throughput (MMBtu/d) ~10,000,000
NGL Production (bpd) ~469,000
Natural Gas Transported (MMBtu/d) 18,320,000
Crude Transportation (bpd) 2,300,000
Mont Belvieu Fractionation (bpd) 325,000
Note: Bakken Pipeline is expected to start up in 1H 2017.
Fully Integrated Platform Spanning the Entire
Midstream Value Chain
8
Involvement in Major Midstream Themes Across the Best Basins and Logistics Hubs
Interstate Natural
Gas T&S
Franchise Strengths
Intrastate Natural
Gas T&S
Midstream
Liquids
Transportation &
Services
Lone Star NGL
• Access to multiple shale plays, storage facilities and markets
• Approximately 95% of revenue from reservation fee contracts
• Well-positioned to capitalize on changing market dynamics
• Key assets: PEPL, FGT, Transwestern, Trunkline, Tiger, MEP
• Marcellus natural gas takeaway to the Midwest, Gulf Coast, and
Canada
• Backhaul to LNG exports and new petrochemical demand on Gulf
Coast
Opportunities
• Natural gas exports to Mexico
• Additional demand from LNG and petrochemical development on
Gulf Coast
• Gathering and processing build out in Texas and Marcellus
• Synergies with ETP downstream assets
• Significant growth projects ramping up to full capacity over the
next two years
• Increased volumes from transporting and fractionating volumes
from Permian/Delaware and Midcontinent basins
• Increased fractionation volumes as large NGL fractionation third-
party agreements expire
• Bakken crude takeaway to Gulf Coast refineries
• Permian crude, condensate and NGL takeaway
• NGL optimization in the Marcellus / Utica basin
• Marcellus / Utica NGL takeaway pipelines
• Well-positioned to capture additional revenues from
anticipated changes in natural gas supply and demand
• Largest intrastate natural gas pipeline and storage system on
the Gulf Coast
• Key assets: ET Fuel Pipeline, Oasis Pipeline, Houston
Pipeline System, ETC Pipeline
• ~33,000 miles of gathering pipelines with ~6.7 Bcf/d of
processing capacity
• Projects placed in-service underpinned by long-term, fee-
based contracts
• Bakken Crude Oil pipeline supported by long-term, fee-based
contracts; expandable to 570,000 bpd with incremental
pumps
• Mariner East provides significant Appalachian liquids
takeaway capacity connecting NGL volumes to local, regional
and international markets via Marcus Hook
• World-class integrated platform for processing, transporting,
fractionating, storing and exporting NGLs
• Fastest growing NGLs business in Mont Belvieu
• Liquids volumes from our midstream segment culminate in the
ETE family’s Mont Belvieu / Mariner South / Nederland Gulf
Coast Complex
Organic Growth Enhances the Combined Entity’s
Strong Foothold in the Most Prolific Producing Basins
9
* Growth project under development
(1) Joint venture.
2007 Expanded Godley Plant to 400 MMcf/d
2008 Expanded Godley Plant to 600 MMcf/d
Eight 36” & 42” gas pipelines totaling 419 miles
Texas Independence Pipeline – 148 mile 42” gas pipeline
2013 Godley Plant – expanded to 700 MMcf/d
2009 Midcontinent Express
JV – 500 mile gas
pipeline from Woodford
and Barnett(1)
2014 Granite Wash
Extension
2010 Fayetteville Express
Pipeline –185 mile
42” gas pipeline(1)
2007 First 42” gas pipeline in Texas
2010 Tiger Pipeline – 175 mile 42” gas pipeline
2015 Alamo Plant
2011 Freedom (43 miles) and Liberty NGL Pipelines (93
miles)(1)
2012 ETP Justice Pipeline
Lone Star Fractionator I
2013 Lone Star Fractionator II
Jackson Plant
2014 Nueces Crossover
2015 Mariner South
Lone Star Fractionator III
2016 Lone Star Fractionator IV
Bayou Bridge Phase I(1)
2017 Bayou Bridge Phase II(1)*
2020+ Lake Charles LNG Facility (60% ETE/40% ETP)*
2010 Dos Hermanas Pipeline – 50 mile, 24” gas pipeline
2011 Chisholm Pipeline – 83 miles
Rich Eagle Ford Mainline (“REM”) Phase I – 160 miles
2012 Chisholm Plant, Kenedy Plant, and REM Phase II
Lone Star West Texas Gateway
2014 REM expanded to exceed 1 Bcf/d
Rio Bravo Crude Conversion
Eagle Ford Expansion Project
2015 Kenedy II Plant (REM II)
2014 Eaglebine Express
ETP Projects
SXL Projects
2017 Bakken Crude Pipeline (1)*
2013 Mariner West
2014 Mariner East 1 - Propane
2015 Allegheny Access
2016 Ohio River System(1)
Mariner East 1 – Ethane and Propane
NE PA Expansion Projects
2017 Mariner East 2*
Rover Pipeline (includes making PEPL/TGC bi-
directional(1)*
Revolution Pipeline*
2013 Permian Express 1
2014 Rebel Plant
Permian Express 1 expansion
2015 Permian Express 2
Mi Vida Plant
2016 Permian Longview & Louisiana Extension
Delaware Basin Extension
Orla Plant
Lone Star Express
Panther Plant*
2017 Trans-Pecos / Comanche Trail(1)*
Active in 9 of the top 10 basins by active
rig count with a rapidly increasing
footprint in the most prolific US onshore
plays
2009 Phoenix Lateral added to Transwestern
pipeline – 260-mile, 36” and 42” gas pipeline
One of the Largest and Most Dynamic Midstream MLPs
10
Enterprise Value ($bn)(1)(2)
Q3 2016 Annualized Adjusted EBITDA ($bn)(3)
(1) Enterprise Value includes GP value. Private GP value calculated as LP equity value / (1 – Gross GP / IDR Take Percentage) * (Gross GP / IDR Take Percentage). Pro forma SXL calculated
using the exchange ratio of 1.500x and SXL unit price as of 11/18/2016. Excludes Midstream C-Corps.
(2) Market data as of 11/18/16.
(3) Annualized adjusted EBITDA amounts derived from respective quarterly SEC filings of each company and multiplied by four. Reconciliations of the quarterly EBITDA amounts for each
company to generally accepted accounting principle metrics can be found in the respective SEC filings for each company.
(4) Pro forma annualized adjusted EBITDA for SXL derived from historical adjusted EBITDA for each of SXL and ETP for the 3rd quarter of 2016. As a result, this pro forma adjusted EBITDA
does not reflect any pro forma adjustments related to the proposed transaction between SXL and ETP.
(5) ETP standalone EBITDA excludes investment in Sunoco Logistics.
Credit
Rating:
Baa3/
BBB-/
BBB-
Baa3/
BBB-/
BBB
Baa2/
BBB/
BBB
Baa2/
BBB/
NR
Baa3/
BBB-/
BBB-
Baa3/
BBB/
BBB
Baa1/
BBB+/
BBB+
(4)
Baa3/
BBB/
NR
(5)
(5)
$77.4
$74.3
$56.7 $53.7
$34.1
$25.5 $25.3 $24.0
$19.8
EPD PF SXL SA ETP WPZ PAA SEP OKS EEP SA SXL
Equity Value Enterprise Value
$5.6
$5.0
$4.8
$4.3
$1.9 $1.8 $1.8 $1.7
$1.2
PF SXL EPD WPZ SA ETP OKS EEP PAA SEP SA SXL
Synergy Opportunities
Delaware Basin & Midland Basin opportunities
Better opportunity to fill capacity on underutilized
pipelines
• SXL’s Delaware Basin Pipeline has ability to
expand by 100 MBPD
• ETP has an idle 12” 100 MBPD pipeline in the
basin
ETP’s gathering system is very synergistic with
SXL’s recently acquired Midland crude oil platform
11
Permian Crude Gathering and Mainline Optimization Gulf Coast NGL Projects
ETP’s Lone Star presence in Mont Belvieu
combined with SXL’s Nederland terminal provide
opportunities for multiple growth projects
Potential ethane and ethylene projects delivering
Lone Star fractionated products to Nederland for
export
Marcellus Optimization Cost Reduction Opportunities
ETP’s Rover and Revolution system combined with
SXL’s NE Mariner system provide long-term growth
potential
Wellhead to market service offering
More efficient tax structure with SXL’s C-corp joint
ventures
Single public company cost
SG&A optimization
EXPECT THAT THE TRANSACTION WILL ALLOW FOR COMMERCIAL SYNERGIES AND COST SAVINGS IN
EXCESS OF $200 MILLION ANNUALLY BY 2019
SXL and ETP’s management teams have proven track records of successfully
integrating acquisitions:
Knowledge of respective assets and businesses will facilitate a smooth integration of:
Operations
Commercial
Risk Management
Finance / Accounting
Information Technology
Integration plan expected to be substantially complete by the time transaction closes
Proven Track Records of Successful Integration
12
2014 2012 2012 2011 2012 2015
Key Takeaways
13
• The transaction creates benefits for current ETP unitholders
– Long-term value potential from improved distribution growth profile and strong coverage
– Larger float and enhanced access to capital markets for larger pro forma entity
• SXL/ETP becomes the second largest MLP
– Pro forma SXL becomes a fully integrated midstream / liquids platform across North America with 71,000 miles of pipeline
– Operations in major high-growth oil and gas shales and basins, including Permian, Eagle Ford, Panhandle and Marcellus / Utica
• ETE benefits from size and strength of SXL’s more diversified platform
– A stronger MLP creates a stronger GP
– Clearly identified commercial synergy opportunities and cost saving initiatives
– Step toward simplifying ETE family structure
This transaction will make ETP stronger and better positioned for future strategic
opportunities
SXL benefits from further diversified basin exposure and enhanced liquids integration
ETE benefits from a larger, combined underlying MLP
Illustrative Transaction Timeline
14
• Integration plan will result in one functional organization at closing
November 2016
• Sign Agreement
• Announce transaction
• Begin drafting Proxy /
registration statement
• Begin regulatory approval
process
File proxy
statement / S-4
registration
statement
Q1 2017:
Transaction
Close
2 – 4 weeks
8 – 16 weeks
3 – 5 months expected timing from announcement to closing
Subject to SEC review & regulatory approval
ETP vote
Liquids Integration Opportunities
16
Fully Integrated Midstream / Liquids Platform
Across North America
Refined Products/NGL
Crude
Growth Projects
Sunoco Logistics
Facility
NGL Pipelines
Crude Projects¹
NGL Projects
Energy Transfer
LNG Facilities
Fractionator
The ability to integrate a producer liquids end-to-end solution will better serve customers and alleviate
bottlenecks currently faced by producers
Lone Star is the fastest growing NGLs business
in Mont Belvieu
• Fracs I, II, III and IV in service.
• Plot plan in place for an additional 3 Fracs on existing footprint (7 fractionators in total)
• Total Frac capacity potentially 800,000 bpd
• 2,000 miles of NGL pipelines with fully expanded capacity of 935,000 bpd
• Storage capacity of 53mm bpd
• 210,000 bpd LPG export terminal
• 80,000 bpd of diluent export capacity
Marcus Hook: The future Mont
Belvieu of the North
• 800 acre site: inbound and
outbound pipeline along with
infrastructure connectivity
• Logistically and financially
advantaged for exports being
1,500 miles closer to Europe,
significantly reducing shipping
cost.
• Advantaged to local and regional
markets
• No ship channel restriction,
compared to the Houston Ship
Channel
• 4 seaborne export docks can
accommodate VLGC sized
vessels
(1) Via joint ventures
ETP NGL Transportation & Services
Pipeline Transportation Fractionation and Processing
• ~53 million barrels NGL storage
• Permitted to drill additional 8 caverns*
• 2,000+ miles of NGL Pipelines
• ~ 580 Mbpd of raw make transport capacity
• Expanding capacity to 935 Mbpd
• 210 Mbpd LPG export terminal
• 80 Mbpd of Diluent export capacity
• Extensive Houston Ship Channel pipeline
network
• 533 miles of new 24” and 30” Lone Star
Express NGL pipeline
• Four fractionators at Mont Belvieu with
a total capacity of 420,000 bpd
• Ability to build a total of 7 Mont Belvieu
fractionators on current footprint*
NGL Storage
*Growth Projects
17
Baden Storage Godley Plant
Hattiesburg
Storage
Sea Robin
Plant
LaGrange/Chisholm
Plant Complex
Jackson
Plant
Mt. Belvieu
Fractionation
& Storage
Geismar
Fractionator
Sorrento
Plant
Chalmette
Plant
Kenedy Plant
ETP Justice
Storage Fractionation
Lone Star West Texas Gateway Expansion
ETP Spirit ETP Freedom
Plant
Existing Lone Star
Approved Lone Star Express
ETP-Copano Liberty JV
Mariner South
Nederland Terminal
Mariner South II opportunity would
connect ETP’s Mt. Belvieu fractionators
with SXL’s Nederland terminal
Mariner Franchise & Revolution System Projects
Revolution Project Map
• System is located in Pennsylvania’s
Marcellus/Utica Shale rich-gas area
• Rich-gas, complete solution system
• Currently 20 miles of 16” in-service
• Build out assets will include:
– 110 miles of 20”, 24” & 30” gathering
pipelines
– Cryogenic processing plant with de-
ethanizer
– Natural gas residue pipeline with direct
connect to ETP’s Rover pipeline
– Purity ethane pipeline to SXL’s Mariner
East system
– C3+ pipeline and storage to SXL’s
Mariner East system
– Fractionation facility located at SXL’s
Marcus Hook facility
• Expected in-service Q4 2017
Project Details
18
• Opportunity to connect ETP’s
Revolution system to SXL’s Mariner
East system to move additional NGL
volumes out of the Marcellus / Utica
• Potential to increase product flows to
SXL’s Marcus Hook
Bayou Bridge Pipeline Project
Bayou Bridge Project Map
• Crude oil transportation – joint venture
between Phillips 66 Partners (40%), SXL (30%
operator) and ETP (30%)
– Phillips 66 Partners = construction
manager for segment 1 – Nederland
to Lake Charles, Louisiana
– ETP = construction manager for
segment 2 – Lake Charles to St.
James, Louisiana
• 30” Nederland to Lake Charles segment
went into service in April 2016
• 24” St. James segment expected in-service
2nd half of 2017
• Light and heavy crude service
Project Details
19
Project highlights synergistic nature of
ETP and SXL crude platforms and
creates additional growth opportunities
and market diversification
Permian Crude Gathering and Mainline
Permian Crude Assets
• Better opportunity to fill capacity on
underutilized pipelines
• SXL’s Delaware Basin Pipeline has ability to
expand by 100 MBPD
• ETP has an idle 12” 100 MBPD pipeline in
the basin
• ETP’s gathering system is very synergistic
with SXL’s recently acquired Midland crude
oil platform
Integration Potential
20
Permian Express 1
Permian Crude to Nederland
2Q 2013
3 West Texas Crude Expansions
Permian Crude to multiple markets
2012 - 2014
Permian LV & LA Extension
Permian Crude to multiple markets
3Q 2016
Eaglebine Express
Eaglebine / Woodbine Crude to Nederland
4Q 2014
Granite Wash Extension
Granite Wash Crude to multiple markets
4Q 2014
Permian Express 2
Permian Crude to multiple markets
3Q 2015 Houston
Delaware Basin Extension
Delaware Basin Crude to Midland
3Q 2016
Energy Transfer
Permian Basin
Midstream¹
• Pecos Crossing System
– System Capacity: 100,000 bpd
– Currently flowing: ~40,000 bpd
– Adding interconnect to Advantage
Pipeline for access to Houston
markets
• Delaware Gathering Expansion
– 3 new oil gathering systems
consisting of 130 miles of pipeline
in Reeves, Loving and Lea
Counties
– Total Capacity: 120,000 bpd
– Delivery into SXL’s new Delaware
Basin Expansion Project
(1) Includes gas and crude gathering assets
Bakken Pipeline
21
• Dakota Access Pipeline will connect Bakken production to
Patoka, IL with interconnection to Energy Transfer Crude Oil
Pipeline (Trunkline conversion) to reach Nederland and the Gulf
Coast
– Supported by long-term, fee-based contracts with large,
creditworthy counterparties
– Currently expected to deliver in excess of 470,000 barrels
per day
– Expandable to 570,000 barrels per day
Note: Gross JV project cost where applicable
(1) 686 miles of converted pipeline + 68 miles of new build.
(2) Bakken Crude Pipelines owned 45% ETP, 30% SXL (operator), 25% P66 (post closing of Bakken
equity sale, ownership will be ETP and SXL- 38.25%, MarEn- 36.75%, and P66- 25%).
Project Details
1,172 miles of
new 30”
Trunkline Conversion 754
miles(1)
of 30” to crude service
Delivery Points
Origin Sites
Dakota Access Pipeline
Energy Transfer Crude Oil Pipeline
Bayou Bridge Pipeline
Nederland Terminal Project Average
Asset Cost Contract
Project Name Type Miles ($bn)
Ready for
Service Duration
Dakota Access (2) Crude pipelines 1,172
ETCO Pipeline (2) Crude pipelines 754(1)
1H 2016 $4.8 9 yrs
• ETP, SXL and Phillips 66 announced the successful completion of the
project-level financing of jointly-owned Bakken Pipeline Project
• ETP and SXL have signed an agreement to sell 36.75% of the Bakken
Pipeline Project to MarEn Bakken Company LLC (MarEn), an entity
jointly owned by Enbridge Energy Partners and Marathon Petroleum
Corporation, for $2 billion in cash
• Expected to close in the fourth quarter of 2016 or first quarter of 2017,
subject to certain closing conditions
• Upon closing, a subsidiary of Marathon Petroleum has committed to
participate in a forthcoming Dakota Access/Energy Transfer Crude Oil
Pipeline open season, and subject to the terms and conditions of the
open season, make a long-term volume commitment on the Bakken
Pipeline Project. The new open season was launched on August 12,
2016
• Upon closing, the ownership of the Bakken Pipeline Project will be:
ETP and SXL - 38.25%, MarEn - 36.75%, and Phillips 66 - 25%
Recent Developments
Project highlights synergistic nature of ETP and SXL crude
platforms and creates additional growth opportunities and
market diversification
Existing IDR Waivers
22
Existing ETP IDR
Reduction
Existing SXL IDR
Reduction
Total IDR Reduction
December 31, 2016 $137,500 $7,500 $145,000
March 31, 2017 $149,500 $7,500 $157,000
June 30, 2017 $154,500 $7,500 $162,000
September 30, 2017 $155,750 $7,500 $163,250
December 31, 2017 $165,750 $7,500 $173,250
2018 $138,000 $15,000 $153,000
2019 $128,000 -- $128,000
Total Through 2019 $1,029,000 $52,500 $1,081,500
(in thousands)