Increasing Assets
In June 2007, ETP and ETE announced quarterly distribution increases. ETP approved a new distribution of $0.80 per unit on outstanding limited partner interests for the quarter ending May 31, 2007, the company asserts.

In addition, ETE approved the new distribution of $0.37 per unit for outstanding interests for the same quarter, it adds. “We are pleased to announce another increase in our quarterly distributions to our unitholders,” ETP CFO Brian Jennings said in a statement. “As we continue to grow our assets, we are focused on maintaining our balance sheet strength as well as continuing to increase ETP and ETE unit holder value.”

Top Performer
This has been a year of growth and expansion for Energy Transfer, and its performance has been recognized industrywide. Energy Transfer Partners appeared on this year’s No. 13 on Barron’s top 500 list of the leading companies throughout the United States and Canada, according to the company.

Barron’s is a weekly financial magazine published by Dow Jones & Co., and its list of companies were ranked after examining return-on-investment, stock performance, cash flow and sales growth. ETP is appearing on the list for the second time, coming in at No. 13. This is a significant jump from its 2006 position, when it was placed at No. 107. “Energy Transfer Partner’s top ranking this year reflects the company’s exceptional growth and performance during the past year,” it says.

ETE is also a dominant player in the industry, and was listed on Fortune magazine’s list of the top-500 largest American companies based on annual revenues, it says. “We are very pleased about this recognition from both Barron’s and Fortune,” ETE President John W. McReynolds said. “These rankings evidence the success of our business strategy.”

‘Financial Flexibility’
In July 2007, ETP entered into a $2 billion revolving credit facility maturing July 2012, it says. This takes the place of the company’s former $1.5 billion credit facility. “The new credit facility enhances our financial flexibility, providing easier liquidity at a lower cost,” Jennings said. “Securing this facility provides access to capital to fund our multi-year pipeline expansion projects.”

This financial flexibility strengthens shareholders’ confidence in the organization, and the company continues to make strides in enhancing its financial stability, it says. Potential shareholders recognize the opportunities available at Energy Transfer. In March 2007, the company completed the placement of more than 5 million of its common units to a group of institutional investors.

“This private equity placement shows once again the tremendous level of confidence that institutional investors have in ETE,” McReynolds said in a statement. “Moreover, this equity issuance reflects our continuing commitment to maintaining a strong balance sheet at ETE as well as the other Energy Transfer family of companies. We believe that this equity issuance and debt repayment appropriately balances our capital structures at the present time.”

Rocky Mountain Expansion
In September, Energy Transfer acquired midstream company Canyon Gas Resources, which brings new opportunities and room for growth. The assets the company acquired are located in the Piceance-Uinta Basin in Colorado and Utah – one of the largest natural gas plays in all of North America. The system as a whole, the company says, includes more than 400,000 acres under contracts. “We are excited to have this opportunity to expand into the Rocky Mountains with such quality assets,” Vice President Mike Smith said in a statement. “The Piceance Basic” is one of the most active drilling regions and highest-potential basins in North America, and Canyon is the only significant third-party gas gathering system in this area.

“This is a natural extension of our western expansion following the acquisition last year of the Transwestern Pipeline, and is consistent with our strategy of adding bolt-on acquisitions to our existing assets,” he continued.

“We see a need to expand the takeaway capacity from this region, another strategy we have successfully implemented following our past acquisitions. Canyon’s employees have done a great job of developing these assets, and we look forward to working with them to capitalize on the tremendous growth opportunities for this system.”

Meeting Demands
Meeting the demanding scheduling requirements of its projects is not easy. This is complicated in today’s market, where demand for materials far exceeds supply. In response, Energy Transfer strives to maintain positive relations globally with pipe mills. “We have contacts with the majority of the mills worldwide,” Howard asserts. “Even though most pipe mills in the world are at capacity, we always try to get in line early to acquire the necessary materials.”

The firm consistently bids on 30-, 36- and 42-inch pipe, and works with a number of mills, rather than committing to only one. “We go out to five or more different mills and commit a portion to the ones that have space,” Howard says. “This way, if something happens at one mill, another can pick up the slack.”

Sourcing is not the only issue to contend with. Along with increased demand for materials comes a subsequent rise in their cost, Howard says. Due to the number of major pipeline expansions in the United States, production levels and manpower today are not as strong as they used to be, he says, causing prices for construction to increase.

With supply and demand issues affecting companies industry wide, it’s even more important to plan ahead for longer lead items. Energy Transfer works closely with vendors to develop a clear understanding of the necessary turnaround times. In recent years, the company has been forced to order materials 40 to 50 weeks in advance, Howard notes.