What happened

Three master limited partnerships (MLPs) with double-digit yields — Magellan Midstream Partners (NYSE: MMP), Plains All American Pipeline (NYSE: PAA), and MPLX (NYSE: MPLX) — suffered double-digit price declines in September, according to data provided by S&P Global Market Intelligence.

The companies’ unit prices (the MLP version of share prices) lost out to the S&P 500, which only slipped 3.9% for the month. Meanwhile, Magellan’s unit price fell by 10%, MPLX’s was down 13.8%, and Plains’ dropped 15.5%. The year-to-date picture is even worse, with MPLX’s shares down more than 35% so far in 2020, while Magellan’s have fallen 44% and Plains’ a jaw-dropping 68.5% this year. 

An oil pipeline covered with icicles in a snowy landscape.

Image source: Getty Images.

So what

The three companies operate North American pipeline and storage-terminal networks for crude oil and other products. But within that universe, the companies are differentiated by what they transport and where it goes.

Magellan primarily deals with refined products through its extensive Midwestern pipeline network, plus a series of refined-product storage terminals in the Southeast. It also has a few long-haul crude pipelines in Texas, Oklahoma, and Kansas.

Plains All American, on the other hand, primarily operates crude oil pipelines and terminals. Its network is centralized in Texas, but its long-haul crude pipelines stretch all the way to the Province of Alberta in Canada.

MPLX transports crude oil and refined products through its pipelines, but also has natural-gas gathering systems and fractionation capabilities (basically, the natural gas equivalent of crude oil refining).

But when the entire industry is experiencing a downturn, exactly what oil and gas products a company’s network is transporting and storing doesn’t matter quite so much: Things are going to be bad. And in September, the downturn that has gripped the global oil and gas industry since March continued.