Energy Transfer 2013 Annual Report Download - page 23

Table of Contents
we will be best positioned to achieve our objectives. We balance our desire for growth with our goal of preserving a strong balance sheet, ample liquidity and
investment grade credit metrics.
Following is a summary of the business strategies of our core businesses:
Enhance profitability of existing assets We intend to increase the profitability of our existing asset base by adding new volumes under long-term producer
commitments, undertaking additional initiatives to enhance utilization and reducing costs by improving operations.
Engage in construction and expansion opportunities We intend to leverage our existing infrastructure and customer relationships by constructing and
expanding systems to meet new or increased demand for midstream and transportation services.
Increase cash flow from fee-based businesses We intend to increase the percentage of our business conducted with third parties under fee-based
arrangements in order to provide for stable, consistent cash flows over long contract periods while reducing exposure to changes in commodity prices.
Growth through acquisitionsWe intend to continue to make strategic acquisitions that offer the opportunity for operational efficiencies and the potential for
increased utilization and expansion of our existing assets while supporting our investment grade credit ratings.
Competition
Natural Gas
The business of providing natural gas gathering, compression, treating, transportation, storage and marketing services is highly competitive. Since pipelines
are generally the only practical mode of transportation for natural gas over land, the most significant competitors of our transportation and storage segment are
other pipelines. Pipelines typically compete with each other based on location, capacity, price and reliability.
We face competition with respect to retaining and obtaining significant natural gas supplies under terms favorable to us for the gathering, treating and
marketing portions of our business. Our competitors include major integrated oil companies, interstate and intrastate pipelines and other companies that
gather, compress, treat, process, transport and market natural gas. Many of our competitors, such as major oil and gas and pipeline companies, have capital
resources and control supplies of natural gas substantially greater than ours.
In marketing natural gas, we have numerous competitors, including marketing affiliates of interstate pipelines, major integrated oil companies, and local and
national natural gas gatherers, brokers and marketers of widely varying sizes, financial resources and experience. Local utilities and distributors of natural
gas are, in some cases, engaged directly, and through affiliates, in marketing activities that compete with our marketing operations.
NGL
In markets served by our NGL pipelines, we face competition with other pipeline companies, including those affiliated with major oil, petrochemical and
natural gas companies, and barge, rail and truck fleet operations. In general, our NGL pipelines compete with these entities in terms of transportation fees,
reliability and quality of customer service. We face competition with other storage facilities based on fees charged and the ability to receive and distribute the
customer’s products. We compete with a number of NGL fractionators in Texas and Louisiana. Competition for such services is primarily based on the
fractionation fee charged.
Crude Oil and Refined Products
In markets served by our refined products and crude oil pipelines, we face competition from other pipelines. Generally, pipelines are the lowest cost method for
long-haul, overland movement of refined products. Therefore, the most significant competitors for large volume shipments in the areas served by our pipelines
are other pipelines. In addition, pipeline operations face competition from trucks that deliver product in a number of areas that our pipeline operations serve.
While their costs may not be competitive for longer hauls or large volume shipments, trucks compete effectively for incremental and marginal volume in many
areas served by our pipelines.
We also face competition among common carrier pipelines carrying crude oil. This competition is based primarily on transportation charges, access to crude
oil supply and market demand. Similar to pipelines carrying refined products, the high capital costs deter competitors for the crude oil pipeline systems from
building new pipelines. Competitive factors in crude oil purchasing and marketing include price and contract flexibility, quantity and quality of services, and
accessibility to end markets.
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