EquityResearch15October2019COREBarclaysCapitalInc.and/oroneofitsaffiliatesdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.PLEASESEEANALYSTCERTIFICATION(S)ANDIMPORTANTDISCLOSURESBEGINNINGONPAGE99.Restricted-InternalU.S.MLPs/U.S.DiversifiedNaturalGas3Q19Preview3Qlikelywon’tcontinuetrendofrecordearnings:Year-to-date,we’veseenthemorediversified,fullvalue-chaintypeofplayerspostingbeatstoconsensusandrecordhighfinancialresultsforacoupleofquarters.Wedon’texpectthistospilloverinto3QduetolowerNGLprices,narrowingbasisdifferentialsacrosstheboardasinfrastructurewasplacedintoserviceandethanerejectionthatwasmuchhigherduringthequarterasotherNGLswerepreferredfeedstocksforthepetchemindustry,whichwouldimpactNGLtransportationandfractionationthroughput.Crudetransportationvolumesrampedhigherthroughoutthequarter,althoughthein-serviceofnewPermianpipelineswillre-distributewhereandhowthevolumesflowrelativetopriorquarterswhilepreliminarydataseemstosuggestcrudeliftingswereflattishtodown.Increasedamountsofethanebeingsoldasmethanehasnothelpedthenaturalgassituationaspricescontinuetobepressuredbyabearishstoragepictureandawarmernear-termweatheroutlook.WebelievetheGulfCoastExpressstartedline-fillsometimeinearlySeptember,whichmayhavedivertedsomevolumesoffoflegacyPermiantakeawaywhilethosewhobenefitedfromspreadswillseethatmoderate,althoughthemorenotableimpactshouldbefeltin4Q.Focuson2020:Asweenterthefinalquarteroftheyear,wethinkmostoftheinterestwillcenteraround2020outlooksandcapitalspending,especiallygivenconcernsaboutapullbackinproductiongrowth.Whileproducerbudgetswon’tbecompletedforseveralmonths,EQM(one-off),ENBL,NS,PAA,LNG/CQP,ATOandUGItypicallygiveforwardyearguidanceinconjunctionwith3Qearnings.Forothernames,weexpectthelineofquestioningtofocusonhowcapexisshakingoutfor2020asitisoneofthe...
