Green Plains Partners Lp
Green Plains Partners provides fuel storage and transportation services by
owning, operating, developing and acquiring ethanol and fuel storage facilities,
terminals, transportation assets and other related assets and businesses. We
were formed by Green Plains, a vertically integrated ethanol producer, to support
its marketing and distribution activities as its primary downstream logistics
provider.
We generate a substantial portion of our revenues under fee-based commercial
agreements with Green Plains Trade for receiving, storing, transferring and
transporting ethanol and other fuels, which are supported by minimum volume
or take-or-pay capacity commitments. We do not take ownership or receive any
payments based on the value of ethanol or other fuels we handle. As a result,
we do not have direct exposure to fluctuating commodity prices.
Our Relationship with Green Plains
Our parent is a vertically integrated producer, marketer and distributor of
ethanol and the second largest consolidated owner of ethanol plants in North
America. Our parent mitigates commodity price volatility by owning and operating
assets throughout the ethanol value chain, which differentiates it from companies
focused only on ethanol production.
We benefit significantly from our relationship with our parent. Our assets are
the principal method of storing and delivering the ethanol our parent produces.
Our commercial agreements with Green Plains Trade account for a substantial
portion of our revenues.
Our parent has a majority interest in us through the ownership of our general
partner, a 62.5% limited partner interest and all of our incentive distribution
rights. We believe our parent will continue to support the successful execution
of our business strategies given its significant ownership in us and the importance
of our assets to Green Plains’ operations.
We believe ethanol could become an increasingly larger portion of the global
fuel supply driven by volatile oil prices, heightened environmental concerns,
energy independence and national security concerns. We intend to further develop
and strengthen our business by pursuing the following growth strategies:
Generate Stable, Fee-Based Cash Flows. A substantial portion of our revenues
and cash flows are derived from our commercial agreements with Green Plains
Trade. Under these agreements, we do not have direct exposure to fluctuating
commodity prices. We intend to continue to establish fee-based contracts with
our parent and third parties that generate stable and predictable cash flows.
Grow Organically. We will collaborate with our parent and other potential third-party
customers to identify opportunities to construct assets that provide us long-term
returns on our investment. Plant expansion that increases our parent’s
production capacity also increases annual throughput at our facilities. Capital
expenditures associated with expansion are minimal since our ethanol storage
facilities have available capacity to accommodate volume growth.
Acquire Strategic Assets. We intend to pursue strategic acquisitions independently
and jointly with our parent to grow our business. Our parent has a proven history
of identifying, acquiring and integrating assets that are accretive to its business.
Under the omnibus agreement, we have a right of first offer, for a period of
five years from the date of the IPO, on any fuel storage, terminal or transportation
asset our parent owns, constructs or acquires and decides to sell. In addition,
we intend to continually monitor the marketplace to identify and pursue assets
that complement or diversify our existing operations, including fuel storage
and terminal assets in close proximity to our existing asset base.
Development of Downstream Distribution Services. Our parent will continue to
use its logistical capabilities and expertise to further develop downstream
ethanol distribution services that leverage the strategic locations of our ethanol
storage and fuel terminal facilities.
Conduct Safe, Reliable and Efficient Operations. We are committed to maintaining
safe, reliable and environmentally compliant operations and conduct routine
inspections of our assets in accordance with applicable laws and regulations.
We seek to improve our operating performance through preventive maintenance,
employee training, and safety and development programs.