Down but not defeated…

MLPs may be out of favour, but their potential cannot be ignored, says industry expert

The master limited partnership (MLP) investment structure has worked well for risk-averse small investors because its revenue streams are locked in for years and not tied to commodity prices. Some have questioned whether MLPs can insulate small investors from a turbulent energy market. But rumors of their demise have been exaggerated, says industry expert Basil M. Karatzas

Pipelines are an interesting type of investment since they require a lot of resources and the whole capital investment upfront, even before a barrel of oil can be shipped. But, once in place, they almost can guarantee to perpetuity predictable cash flows. Every time a barrel passes through the pipeline, a toll must be paid, even when the original pipeline was laid several decades ago.

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