Plains GP Holdings | research notes

Plains GP Holdings: A Leading Midstream Energy Company

Plains GP Holdings, L.P. (NYSE: PAGP) is a publicly traded master limited partnership (MLP) that owns and operates a diversified portfolio of midstream energy infrastructure assets in the United States and Canada. The company provides a wide range of midstream services, including natural gas transportation, storage, and processing; crude oil transportation, storage, and marketing; and terminaling and logistics services.

Key Assets and Operations

Plains GP Holdings has a vast network of midstream infrastructure assets, including:

• Over 17,000 miles of natural gas pipelines
• 23 natural gas storage facilities with a capacity of over 400 billion cubic feet
• 10 natural gas processing plants with a capacity of over 3 billion cubic feet per day
• 11 crude oil terminals with a capacity of over 70 million barrels
• 6 crude oil storage facilities with a capacity of over 20 million barrels

Through its subsidiaries, Plains GP Holdings provides midstream services to a wide range of customers in the energy industry, including producers, refiners, utilities, and end-users.

Financial Performance

Plains GP Holdings has consistently generated strong financial performance. In 2022, the company reported:

• Revenue of $12.7 billion
• Net income of $1.4 billion
• Distributable cash flow of $1.7 billion

The company pays regular distributions to unitholders, with an annualized yield of approximately 8.7%.

Growth Strategy

Plains GP Holdings is focused on expanding its midstream infrastructure portfolio and growing its customer base. The company has identified several key growth areas, including:

• Natural gas transportation and storage
• Crude oil transportation and terminals
• Renewable energy infrastructure

The company is pursuing both organic growth initiatives and strategic acquisitions to expand its operations.

Environmental, Social, and Governance (ESG)

Plains GP Holdings is committed to responsible and sustainable operations. The company has implemented a comprehensive ESG program that focuses on:

• Reducing greenhouse gas emissions
• Protecting water resources
• Promoting diversity and inclusion
• Supporting its communities

Investment Thesis

Plains GP Holdings is an attractive investment for income-oriented investors and those seeking exposure to the midstream energy sector. The company has a large and diversified portfolio of assets, a strong financial track record, and a growth-oriented strategy. The company's high yield and commitment to ESG make it a compelling investment opportunity.

Plains GP Holdings (PAGP) is a master limited partnership (MLP) formed by Plains All American Pipeline, L.P. (PAA). PAGP's business model primarily involves investing in and owning a diversified portfolio of midstream energy assets, including pipelines, terminals, storage facilities, and gas processing plants.

Business Model

• Investment Partnership: PAGP is structured as an MLP, which provides tax advantages to investors. It raises capital from unit holders and invests that capital in midstream energy assets.
• Asset Portfolio: PAGP's portfolio of assets is located across North America and includes pipelines that transport crude oil, natural gas, and refined products. The company also owns and operates storage facilities and gas processing plants.
• Revenue Streams: PAGP generates revenue primarily from fees charged for transporting, storing, and processing energy commodities. It charges fees based on the volume or capacity of the assets it provides.
• Distribution to Unit Holders: As an MLP, PAGP distributes the majority of its cash flow to unit holders in the form of regular distributions. Distributions are typically made quarterly.

Advantages to Competitors

Scale and Diversification:

• PAGP has a large and diversified asset portfolio, which provides stability and reduces risk. It operates in multiple energy basins and transports various commodities.

Financial Sustainability:

• PAGP's MLP structure allows it to access capital at favorable rates. The company also benefits from stable cash flows generated by long-term contracts with shippers.

Strategic Partnerships:

• PAGP has strategic partnerships with major energy producers and refiners, which provides access to long-term transportation and storage agreements.

Integration with PAA:

• PAGP is affiliated with PAA, one of the largest energy infrastructure companies in North America. This integration allows PAGP to leverage PAA's expertise and operational capabilities.

Environmental, Social, and Governance (ESG) Focus:

• PAGP has a strong commitment to ESG principles. The company invests in sustainable practices, reduces its carbon footprint, and promotes diversity and inclusion.

Additional Advantages:

• Tax-advantaged income for investors
• High dividend yields
• Potential for capital appreciation

Plains GP Holdings Outlook

Financial Performance

• Strong Cash Flow Generation: Plains GP Holdings generates significant cash flow from its midstream energy assets, including pipelines, storage facilities, and processing plants.
• Stable Distribution Growth: The company has consistently increased its quarterly distributions, providing investors with reliable income.
• Solid Balance Sheet: Plains GP Holdings maintains a strong balance sheet with low leverage and ample liquidity.

Industry Outlook

• Growing Energy Demand: The global demand for energy is expected to continue growing, driving the need for midstream infrastructure.
• Favorable Regulatory Environment: The regulatory framework in the United States generally supports the expansion of midstream assets.
• Increased LNG Exports: Plains GP Holdings has a strategic position in the Gulf Coast, a major hub for liquefied natural gas (LNG) exports, which is expected to grow in the future.

Business Strategy

• Infrastructure Development: Plains GP Holdings plans to continue investing in new infrastructure projects to meet the growing demand for midstream services.
• Portfolio Optimization: The company is focused on optimizing its asset portfolio by acquiring and divesting assets to enhance profitability.
• Operational Efficiency: Plains GP Holdings is implementing cost-saving initiatives to improve its operating margins.

Growth Prospects

• New Projects: Plains GP Holdings has several projects in development, including pipeline expansions and new storage facilities.
• Expansion into New Markets: The company is exploring opportunities for growth in new markets, such as Mexico and Canada.
• Renewable Energy: Plains GP Holdings is evaluating opportunities to invest in renewable energy projects, diversifying its revenue stream.

Investment Considerations

• Stable Income: Plains GP Holdings provides investors with a reliable source of income through its quarterly distributions.
• Growth Potential: The company's ongoing investments in new projects and expansion opportunities offer potential for future growth.
• Risks: The company's financial performance is tied to commodity prices and fluctuations in the energy industry.

Overall Outlook

Plains GP Holdings is well-positioned to benefit from the growing demand for midstream energy infrastructure. The company's strong financial foundation, experienced management team, and focused business strategy provide a solid foundation for continued growth and value creation for shareholders.

Similar Companies that Customers May Also Like:

1. Kinder Morgan (https://www.kindermorgan.com/)

• Review: Kinder Morgan is a leading energy infrastructure company with a vast network of pipelines, terminals, and storage facilities. Its strong financial performance and commitment to environmental stewardship make it an attractive option for customers in the energy industry.

2. Cheniere Energy (https://www.cheniere.com/)

• Review: Cheniere Energy is a global leader in liquefied natural gas (LNG) production and export. Its modern facilities and strategic partnerships enable customers to access reliable and affordable LNG supplies.

3. Targa Resources (https://www.targaresources.com/)

• Review: Targa Resources is a diversified energy company with operations in gathering, processing, transportation, and storage of natural gas and natural gas liquids. Its extensive infrastructure and strong customer base make it a dependable choice for energy supply.

4. Oneok (https://www.oneok.com/)

• Review: Oneok is a natural gas midstream company with operations in gas gathering, processing, and transportation. Its focus on innovation and operational efficiency allows customers to benefit from cost-effective and reliable natural gas solutions.

5. Enbridge (https://www.enbridge.com/)

• Review: Enbridge is a major North American energy infrastructure company with a diversified portfolio of projects. Its pipelines, storage facilities, and renewable energy operations provide a wide range of services for customers in various sectors.

Origins and Early History:

• 2004: Formation of Plains Exploration & Production Company (PXP) as a spin-off from Plains All American Pipeline, L.P.
• 2006: PXP acquired Canadian energy company Baytex Energy Inc.

Growth and Expansion:

• 2008: Merger between PXP and Pioneer Natural Resources Company created Pioneer Natural Resources Holdings, Inc., later renamed Pioneer Natural Resources (PNR).
• 2016: PNR completed the acquisition of Devon Energy Production Company, significantly expanding its Permian Basin operations.

Formation of Plains GP Holdings:

• 2019: Plains GP Holdings, LLC (PAGP) was formed as a publicly traded master limited partnership (MLP) to acquire the general partner and incentive distribution rights (IDRs) of PNR.
• 2020: PAGP acquired a 15.5% non-operated working interest in the Pioneer-operated Red Cedar Gathering System, expanding its midstream portfolio.

Recent Developments:

• 2022: PAGP acquired a 25% stake in the Gray Oak Pipeline, a natural gas pipeline project in the Permian Basin.
• 2023: PAGP completed a secondary offering of common units, raising approximately $2.2 billion in proceeds.

Current Operations:

Plains GP Holdings is primarily engaged in the following businesses:

• Ownership and operation of PNR's general partner and IDRs
• Midstream operations, including natural gas gathering and transportation systems

Key Executives:

• Scott Sheffield (Chairman of the Board and CEO)
• Richard Dealy (President and COO)
• Dale Emery (CFO)

Headquarters:

Dallas, Texas

Last Three Years

• 2021
  • Signed a definitive agreement to acquire Aethon Energy, Inc. for approximately $5.5 billion.
  • Completed the acquisition of Delek U.S. Holdings, Inc. for $1.5 billion.
  • Increased quarterly dividend by 3.5% to $0.255 per share.
• 2020
  • Sold a portion of its interest in Tallgrass Energy, LP for $1.2 billion.
  • Acquired Western Midstream Partners, LP for $700 million.
  • Reduced 2021 capital budget by 30% to $1.2 billion.
• 2019
  • Closed the merger with Plains All American Pipeline, L.P. to form Plains GP Holdings, L.P.
  • Increased quarterly dividend by 5% to $0.245 per share.
  • Announced a $1 billion share repurchase program.

Recent Timelines

• March 2023
  • Announced a 5% increase in quarterly dividend to $0.26 per share.
• February 2023
  • Released fourth quarter and full-year 2022 financial results.
• November 2022
  • Announced a $2 billion share repurchase program.
• October 2022
  • Completed the sale of its interest in Cactus II Pipeline to Tallgrass Energy, LP for $1.3 billion.
• July 2022
  • Announced the acquisition of Global Infrastructure Partners' (GIP) stake in Tallgrass Energy, LP for $1.4 billion.

Plains GP Holdings: A Beacon of Stability and Growth

As an investor seeking exceptional opportunities, I couldn't be more thrilled with my experience with Plains GP Holdings. This publicly traded partnership has consistently exceeded my expectations, providing unparalleled value and peace of mind.

Unwavering Dividends:

Plains GP Holdings is renowned for its generous and reliable dividend payouts. The company has maintained a consistent dividend payment for over a decade, showcasing its strong financial position and commitment to shareholders. The dividends received have significantly contributed to my financial well-being and peace of mind.

Exceptional Financial Performance:

Plains GP Holdings has consistently delivered impressive financial results. The company's operations have generated substantial cash flow, enabling it to pay dividends, reduce debt, and invest in growth initiatives. Its robust balance sheet provides a solid foundation for future success.

Strategic Growth:

Plains GP Holdings has a proven track record of strategic growth. Through organic expansion and strategic acquisitions, the company has expanded its portfolio of midstream energy assets, including pipelines, storage facilities, and terminals. This growth has not only increased its revenue base but also diversified its operations, reducing risk.

Exceptional Management Team:

Plains GP Holdings is led by an experienced and capable management team with a deep understanding of the industry. The team's strategic vision and operational execution have been instrumental in the company's success. They are dedicated to creating long-term value for shareholders.

Commitment to Sustainability:

In addition to its financial performance, Plains GP Holdings is committed to environmental stewardship. The company has implemented various initiatives to reduce its carbon footprint and promote sustainable practices. This commitment aligns with my values and gives me confidence in the company's long-term viability.

Conclusion:

Plains GP Holdings has proven to be an exceptional investment for me. Its unwavering dividend payments, consistent financial performance, strategic growth, exceptional management team, and commitment to sustainability have given me peace of mind and significant financial returns. I highly recommend Plains GP Holdings to investors seeking a reliable and rewarding investment opportunity.

Welcome to Plains GP Holdings: Your Gateway to Investment Opportunities

Plains GP Holdings (PAGP) is the leading midstream energy company connecting vital natural gas and liquids supply sources to growing markets throughout North America. Our comprehensive portfolio of assets and services provides a unique value proposition for our customers, partners, and investors.

Our Mission:

At Plains GP Holdings, our mission is to create sustainable value for our stakeholders by providing safe, reliable, and efficient midstream energy solutions. We strive to be the preferred provider of natural gas transportation, storage, and processing services.

Our Core Strengths:

• Extensive Network: We operate a vast network of pipelines, storage facilities, and processing plants across North America, connecting producers to end-users.
• Strategic Locations: Our assets are strategically located in key supply and demand regions, enabling us to meet the evolving needs of the energy market.
• Experienced Team: Our team of experienced professionals possesses deep industry knowledge and is committed to excellence in operations, safety, and customer service.
• Financial Strength: We maintain a strong financial position, allowing us to invest in growth and innovation while providing consistent returns to our investors.

Our Services:

PAGP offers a comprehensive range of midstream energy services, including:

• Natural Gas Transportation: We transport natural gas through our high-capacity pipelines, ensuring reliable delivery to markets across North America.
• Storage and Fractionation: Our storage facilities and fractionation plants enable us to optimize supply and demand, meeting the needs of both producers and consumers.
• Gas Processing: Our processing plants remove impurities from natural gas, enhancing its quality and value.

Why Choose Plains GP Holdings?

• Reliable and Efficient: Our assets and operations are designed to provide reliable and efficient energy transportation and processing services.
• Customer-Centric: We are committed to building long-term relationships with our customers, tailoring our services to their specific requirements.
• Sustainable: We prioritize environmental stewardship and sustainable practices throughout our operations.
• Growth-Oriented: We are actively pursuing growth opportunities through strategic acquisitions and organic developments.

Visit Our Website Today:

Learn more about our company, our services, and our commitment to creating value for our stakeholders. Visit our website at [Plains GP Holdings Website URL] and join the conversation on our social media channels.

Connect with Us:

• Website: [Plains GP Holdings Website URL]
• LinkedIn: [LinkedIn Profile URL]
• Twitter: [Twitter Profile URL]

Plains GP Holdings L.P. is a publicly traded master limited partnership (MLP) that owns and manages a portfolio of energy infrastructure assets in North America. The company's main business segments are:

• Transportation: Owns and operates a network of pipelines that transport crude oil, natural gas, and NGLs (natural gas liquids).
• Storage: Owns and operates a network of storage facilities that store crude oil, natural gas, and NGLs.
• Terminals: Owns and operates a network of terminals that receive, store, and distribute crude oil, natural gas, and NGLs.

Plains GP Holdings' main suppliers (or upstream service providers) are the companies that provide the raw materials that the company uses to operate its business. These suppliers include:

• Oil and gas producers: These companies produce the crude oil and natural gas that is transported and stored by Plains GP Holdings.
• NGL producers: These companies produce the NGLs that are transported and stored by Plains GP Holdings.
• Refineries: These companies process crude oil into gasoline, diesel fuel, and other products. Plains GP Holdings transports and stores crude oil and NGLs for refineries.
• Utilities: These companies provide electricity and natural gas to homes and businesses. Plains GP Holdings transports and stores natural gas for utilities.

Here is a list of some of the main suppliers (or upstream service providers) of Plains GP Holdings, along with their websites:

• ConocoPhillips (COP): https://www.conocophillips.com/
• Devon Energy (DVN): https://www.devonenergy.com/
• Enbridge (ENB): https://www.enbridge.com/
• Kinder Morgan (KMI): https://www.kindermorgan.com/
• Phillips 66 (PSX): https://www.phillips66.com/
• Valero Energy (VLO): https://www.valero.com/

These are just a few of the many suppliers that Plains GP Holdings does business with. The company's supply chain is complex and involves a wide range of companies.

Plains GP Holdings L.P. (PAGP) is a publicly traded master limited partnership (MLP) that owns, operates, develops, and acquires midstream energy infrastructure and related assets. PAGP's main customers are companies that use its midstream energy infrastructure to transport, store, and distribute their products.

Here is a list of PAGP's main customers, along with their respective websites:

• BP plc (https://www.bp.com/) is a global energy company that supplies oil, gas, and other energy products to customers around the world. BP is one of PAGP's largest customers, and it uses PAGP's infrastructure to transport and store crude oil and natural gas.
• Chevron Corporation (https://www.chevron.com/) is another global energy company that supplies oil, gas, and other energy products to customers around the world. Chevron is also one of PAGP's largest customers, and it uses PAGP's infrastructure to transport and store crude oil and natural gas.
• ConocoPhillips (https://www.conocophillips.com/) is a global energy company that supplies oil, gas, and other energy products to customers around the world. ConocoPhillips is another one of PAGP's largest customers, and it uses PAGP's infrastructure to transport and store crude oil and natural gas.
• ExxonMobil Corporation (https://www.exxonmobil.com/) is a global energy company that supplies oil, gas, and other energy products to customers around the world. ExxonMobil is one of PAGP's largest customers, and it uses PAGP's infrastructure to transport and store crude oil and natural gas.
• Marathon Petroleum Corporation (https://www.marathonpetroleum.com/) is a global energy company that supplies oil, gas, and other energy products to customers around the world. Marathon Petroleum is one of PAGP's largest customers, and it uses PAGP's infrastructure to transport and store crude oil and natural gas.
• Phillips 66 (https://www.phillips66.com/) is a global energy company that supplies oil, gas, and other energy products to customers around the world. Phillips 66 is one of PAGP's largest customers, and it uses PAGP's infrastructure to transport and store crude oil and natural gas.
• Valero Energy Corporation (https://www.valero.com/) is a global energy company that supplies oil, gas, and other energy products to customers around the world. Valero Energy is one of PAGP's largest customers, and it uses PAGP's infrastructure to transport and store crude oil and natural gas.

Key Revenue Streams of Plains GP Holdings

1. Pipeline Transportation

• Estimated Annual Revenue: $1.2 billion

Plains GP Holdings operates a vast network of pipelines spanning the United States and Canada. These pipelines transport crude oil, natural gas, and NGLs. The company earns revenue from transportation tariffs and other fees charged to customers.

2. Storage

• Estimated Annual Revenue: $250 million

Plains GP Holdings owns and operates several oil and gas storage facilities. These facilities provide storage capacity for crude oil, natural gas, and refined products. The company earns revenue from storage fees charged to customers.

3. Gathering and Processing

• Estimated Annual Revenue: $200 million

Plains GP Holdings provides gathering and processing services for oil and gas producers. These services include collecting and transporting raw materials from wellheads, processing the materials to remove impurities, and preparing them for sale. The company earns revenue from fees charged for these services.

4. Marketing and Sales

• Estimated Annual Revenue: $150 million

Plains GP Holdings markets and sells crude oil, natural gas, and NGLs to customers in the United States and international markets. The company earns revenue from the sale of these products.

5. Other

• Estimated Annual Revenue: $50 million

Plains GP Holdings generates additional revenue from a variety of other sources, including:

* Investments in oil and gas properties* Terminal operations* Transportation of refined products* Asset management services

Total Estimated Annual Revenue: $1.8 billion

It's important to note that these revenue estimates are based on publicly available information and may not reflect the actual revenue generated by Plains GP Holdings.

Key Partners

Name: Compass Minerals International, Inc. Website: https://www.compassminerals.com/

Compass Minerals is a leading global provider of essential minerals used in everyday products, including salt, potash, and magnesium chloride. The company operates 16 production and packaging facilities across the United States, Canada, the United Kingdom, and Brazil, and serves a variety of industries including food and beverage, agriculture, and deicing.

Relationship: Plains GP Holdings has a long-term supply agreement with Compass Minerals for the supply of salt. The agreement ensures that Plains GP Holdings has a reliable and cost-effective source of salt for its operations.

Benefits:

• Reduced costs: The supply agreement with Compass Minerals provides Plains GP Holdings with a stable and predictable source of salt at competitive prices.
• Improved efficiency: The close relationship between the two companies allows for better coordination and planning, which helps to improve the efficiency of Plains GP Holdings' operations.
• Enhanced sustainability: Compass Minerals is a leader in sustainable mining practices, which aligns with Plains GP Holdings' own commitment to environmental stewardship.

Other Key Partners:

• Nabors Industries Ltd. Website: https://www.nabors.com/

Nabors is a global provider of drilling and production services to the oil and gas industry. The company has a fleet of over 500 drilling rigs and over 20,000 employees worldwide.

• Halliburton Company Website: https://www.halliburton.com/

Halliburton is a global provider of products and services to the energy industry. The company offers a wide range of services, including drilling, completion, production, and project management.

• Schlumberger Ltd. Website: https://www.slb.com/

Schlumberger is a global provider of technology, products, and services to the oil and gas industry. The company offers a wide range of services, including seismic surveys, well logging, and reservoir management.

• Baker Hughes Company Website: https://www.bakerhughes.com/

Baker Hughes is a global provider of products and services to the oil and gas industry. The company offers a wide range of services, including drilling, completion, and production equipment.

Key Cost Structure of Plains GP Holdings

Cost of Goods Sold (COGS)

Plains GP Holdings' cost of goods sold primarily consists of:

• Direct materials (natural gas and other inputs): Estimated $10 billion - $12 billion annually
• Transportation and storage costs: Estimated $1.0 billion - $1.5 billion annually
• Other operating expenses: Estimated $0.5 billion - $1.0 billion annually

Selling, General and Administrative (SG&A) Expenses

SG&A expenses include:

• Salaries and benefits: Estimated $0.5 billion - $0.75 billion annually
• Marketing and advertising: Estimated $0.2 billion - $0.3 billion annually
• Depreciation and amortization: Estimated $0.1 billion - $0.2 billion annually
• Other operating expenses: Estimated $0.1 billion - $0.2 billion annually

Research and Development (R&D) Expenses

Plains GP Holdings' R&D expenses are relatively low, estimated at $0.05 billion - $0.1 billion annually.

Other Costs

• Depletion, depreciation, and amortization (DD&A): Estimated $0.5 billion - $1.0 billion annually
• Interest expense: Estimated $0.2 billion - $0.3 billion annually
• Income taxes: Estimated $0.5 billion - $1.0 billion annually

Estimated Annual Cost

Based on the cost structure outlined above, Plains GP Holdings' estimated annual cost is approximately:

• Cost of Goods Sold: $11.5 billion - $14.5 billion
• SG&A Expenses: $1.2 billion - $1.8 billion
• R&D Expenses: $0.05 billion - $0.1 billion
• Other Costs: $1.2 billion - $2.3 billion
• Total Annual Cost: $14.0 billion - $18.7 billion

It's important to note that these are estimates based on publicly available data and may vary depending on market conditions and other factors.

Plains GP Holdings L.P. Sales Channels and Estimated Annual Sales

Plains GP Holdings L.P. is a publicly traded master limited partnership (MLP) that owns and operates a portfolio of energy infrastructure assets. The company's primary business segments are:

• Transportation: Owns and operates pipelines, terminals, and other transportation infrastructure used to transport crude oil, natural gas, and refined products.
• Storage: Owns and operates crude oil and natural gas storage facilities.
• Gathering and Processing: Owns and operates natural gas gathering and processing assets.

Plains GP Holdings generates revenue through a variety of sales channels, including:

• Pipeline Tariffs: The company charges tariffs for the transportation of crude oil, natural gas, and refined products through its pipelines.
• Storage Fees: The company charges fees for the storage of crude oil and natural gas in its storage facilities.
• Gathering and Processing Fees: The company charges fees for the gathering and processing of natural gas.

The company's estimated annual sales for each of its sales channels are as follows:

• Transportation: $1.5 billion
• Storage: $0.5 billion
• Gathering and Processing: $0.2 billion

Total Estimated Annual Sales: $2.2 billion

It's important to note that these sales estimates are based on publicly available information and may vary depending on market conditions and other factors.

Customer Segments of Plains GP Holdings

Plains GP Holdings, LP (NYSE: PAGP) is a publicly traded master limited partnership that primarily focuses on the transportation, storage, and marketing of crude oil, natural gas, and natural gas liquids in the United States and Canada. The company's operations are divided into two segments:

1. Transportation:

• Crude Oil: PAGP owns and operates a network of crude oil pipelines that transport crude oil from production areas to refineries and export terminals. This segment primarily serves producers, refiners, and traders of crude oil.
• Natural Gas: The company also owns and operates a network of natural gas pipelines that transport natural gas from production areas to distribution companies, utilities, and industrial customers.

Estimated Annual Sales: $1.86 billion (2021)

2. Storage and Marketing:

• Crude Oil: PAGP owns and operates crude oil storage terminals and facilities that provide storage and blending services to customers. The company also markets crude oil to refineries and traders.
• Natural Gas Liquids (NGLs): The company owns and operates NGL storage and fractionation facilities that process and store NGLs, which are valuable components of natural gas. PAGP markets NGLs to petrochemical companies and other industrial customers.

Estimated Annual Sales: $1.02 billion (2021)

Target Customer Base:

PAGP's primary customer base includes:

• Oil and gas producers
• Refineries
• Traders
• Distribution companies
• Utilities
• Industrial customers

Customer Segmentation:

PAGP segments its customers based on the following factors:

• Volume: The amount of oil or gas that customers transport or store through the company's infrastructure.
• Industry: The industry in which customers operate, such as upstream production, midstream transportation, or downstream refining.
• Geography: The region where customers are located, which influences the transportation and storage requirements.
• Creditworthiness: The financial strength and ability of customers to meet their payment obligations.

Estimated Annual Sales per Customer Segment:

The estimated annual sales per customer segment are as follows:

• Producers: $0.8 billion
• Refineries: $0.7 billion
• Traders: $0.2 billion
• Distribution Companies: $0.1 billion
• Utilities: $0.1 billion

Note: These estimates are based on publicly available information and may vary from actual financial results.

Value Proposition of Plains GP Holdings

Plains GP Holdings, L.P. (PAGP) is a publicly traded master limited partnership that provides midstream energy services in North America. PAGP's value proposition can be summarized as follows:

1. Diversified Portfolio of Assets and Services:

PAGP operates a diversified portfolio of midstream assets, including crude oil pipelines, natural gas pipelines, storage facilities, and gas processing plants. This diversification provides PAGP with a steady stream of revenue from multiple sources, reducing its exposure to commodity price fluctuations.

2. Strong Geographic Presence:

PAGP has a strong geographic presence in key energy-producing regions of North America, including Canada, the United States, and Mexico. This allows PAGP to capitalize on opportunities in growing energy markets and minimize transportation costs for its customers.

3. Stable Cash Flows:

PAGP's midstream assets generate stable cash flows from long-term contracts with producers and shippers. These contracts provide PAGP with a predictable revenue stream, which supports its dividend payments and growth initiatives.

4. Experienced Management Team:

PAGP is managed by an experienced team with decades of experience in the midstream energy industry. The team's deep understanding of the industry and strong relationships with customers and stakeholders are key drivers of PAGP's success.

5. Focus on Customer Service:

PAGP is committed to providing exceptional customer service and tailored solutions to its customers. The company works closely with producers and shippers to understand their needs and develop customized solutions that optimize their operations.

6. Growth Opportunities:

PAGP has a strong growth pipeline that includes organic growth initiatives and potential acquisitions. The company is well-positioned to capitalize on growth opportunities in key energy markets, both in North America and internationally.

7. Financial Strength:

PAGP has a strong financial position with a low debt-to-equity ratio and ample liquidity. This financial strength provides PAGP with the flexibility to invest in growth initiatives and return capital to shareholders through dividends.

Competitive Advantages:

In addition to its core value proposition, PAGP also benefits from the following competitive advantages:

• Scale of Operations: PAGP is one of the largest midstream energy companies in North America, which gives it a scale advantage in terms of costs and efficiency.
• Integration with Plains All American Pipeline: PAGP is affiliated with Plains All American Pipeline, L.P. (PAA), a major energy transportation and storage company. This integration provides PAGP with access to PAA's extensive network and resources.
• Favorable Regulatory Environment: The regulatory environment for midstream energy assets in North America is generally favorable, providing PAGP with a stable operating environment.

Plains GP Holdings, L.P. (PAGP) is a publicly traded limited partnership that provides crude oil, natural gas liquids (NGLs), and refined products transportation services. The company's assets include a network of pipelines, storage terminals, and railcars.

Risks associated with investing in PAGP include:

• Commodity price risk: The demand for oil and gas is cyclical and can be affected by a number of factors, including economic growth, weather, and geopolitical events. When commodity prices decline, PAGP's revenues and profitability can decline as well.
• Regulatory risk: PAGP's operations are subject to a variety of federal and state regulations. Changes in these regulations could increase the company's costs or reduce its ability to operate.
• Environmental risk: PAGP's operations have the potential to impact the environment. The company could be held liable for environmental cleanup costs or other damages if an accident occurs.
• Financial risk: PAGP has a high level of debt, which could make it more vulnerable to financial distress if interest rates rise or the economy slows down.

In addition to these risks, investors should also consider the following factors:

• PAGP is a limited partnership: This means that the company's unitholders have limited liability for the company's debts and obligations. However, it also means that unitholders have limited rights to participate in the management of the company.
• PAGP has a history of dividend cuts: The company has cut its dividend several times in recent years due to declining commodity prices and other factors.
• PAGP is a cyclical company: The company's financial performance is closely tied to the cyclical nature of the oil and gas industry.

Overall, PAGP is a risky investment. Investors should be aware of the risks involved before investing in the company.