Energy Transfer 2015 Annual Report Download - page 27

Table of Contents
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.
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.
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 Products
In markets served by our products and crude oil pipelines, we face competition from other pipelines. Generally, pipelines are the lowest cost method for long-
haul, overland movement of products and crude oil. 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 products 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 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.
Our refined product terminals compete with other independent terminals with respect to price, versatility and services provided. The competition primarily
comes from integrated petroleum companies, refining and marketing companies, independent terminal companies and distribution companies with marketing
and trading operations.
Retail Marketing
We face strong competition in the market for the sale of retail gasoline and merchandise. Our competitors include service stations of large integrated oil
companies, independent gasoline service stations, convenience stores, fast food stores, and other similar retail outlets, some of which are well-recognized
national or regional retail systems. The number of competitors varies depending on the geographical area. It also varies with gasoline and convenience store
offerings. The principal competitive factors affecting our retail marketing operations include gasoline and diesel acquisition costs, site location, product
price, selection and quality,
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