Top 10 Practice Tips: Master Limited Partnerships

Summary

Following the adoption of the Tax Reform Act of 1986, integrated publicly traded companies began selling or spinning-off midstream assets to master limited partnership (MLP) to focus on core business. As the MLP product evolved, the MLP asset classes expanded to include marine transportation of petroleum products and in propane and fuel distribution. It further expanded to upstream oil and gas as well as downstream activities, coal production, frac sand production as well as certain service companies. Additionally, the MLP sponsor expanded from publicly traded corporations to private equity sponsors. Even some non-sponsored privately held companies have elected to go public through an MLP structure versus a traditional corporate structure.