| | | Re SE - it is important to understand that SE main financing vehicle is SEP, it's MLP of which they own a minority stake, but more importantly the General Partner. SEP itself is very healthy and debt is one of the lowest in the MLP business ( 3.4x EBITDA, KMI's ratio stands at close to 6x right now) and the unit quite price is very healthy even right now. As long as SEP is in a good shape, keep growing and has access to equity and debt markets, SE is in a good shape as well.
SE and SEP business is mostly related to the NG demand side, which is booming with low NG prices. They do have some more commodity sensitive business's as well, which are via DPM and the service business's at SE itself, but they play a comparatively small role (and most of the downside has already occurred and is modeled in).
I think the above makes it clear, that SE is a special situation in the pipeline business, with a very safe business and conservative financial profile. Compared to this, KMI has more commodity exposure (CO2 business, gathering assets) and with 6x debt /EBITDA about 1.8 X as much leverage. |
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