Good day, ladies and gentlemen and welcome to the Energy Transfer Partners’ Third Quarter 2013 Earnings Conference Call. At this time, all participants are in listen-only mode. Later we will conduct a question-and-answer session. (Operator Instructions) I’d now like to turn the conference over to your host for today Mr. Martin Salinas, Energy Transfer Partners Chief Financial Officer. Please proceed.

Thank you, operator, and good morning, everyone. Welcome to Energy Transfer's third quarter 2013 earnings call. I’m accompanied by Kelcy, Mackie, John McReynolds, Jamie Welch and other members of our senior management team who are available to help answer your questions after our prepared remarks. On today's call, I’ll be making a few remarks about some of our recent accomplishments as well as an update on our growth projects. I will also walk through our third quarter results, before opening up the call to take your questions. And during the call I’ll make forward-looking statements within the meaning of Section 21E of the SEC Act of 1934 based on our beliefs, as well as certain assumptions and information available to us. Let me start by saying how extremely pleased we’re to have announced an increase in ETP’s quarterly distribution. This has been a goal of the entire management team we pass these past few years. We’ve worked hard to diversify our partnership and improve our financial strength and now that distribution growth has resumed, we expect to continue delivering incremental value to our stakeholders in a sustainable manner. By turning to some of our other accomplishments since our last call, we’ve completed the sale of Missouri Gas Energy to Laclede effective September the 1st and expect the remaining portion of that transaction, the pending share of New England Gas to close in the fourth quarter of this year. As we’ve mentioned in the past, proceeds from these sales were earmarked the debt repayment. We are also closing the exchange of roughly 50 million ETP common units previously owned by ETE, the new Class H Units issued by ETP that track 50% of the underlying economics of GP in IDRs of SXL. And as you might see our LNG liquefaction facility…

Thank you, Mr. Salinas. Ladies and gentlemen, our question-and-answer session will now begin. (Operator Instructions). Okay, we do have a few questions. The first question is from the line of Stephen Maresca of Morgan Stanley. Please go ahead. Thank you.

Thanks. Good morning, Martin, and everyone there. Great to see that distribution rate is at ETP obviously. Wanted to talk first on your brief update on the Trunkline oil conversion and if you could talk what's your latest thinking on moving forward on this project with or without Enbridge or without any minor volume commitments? And when do you think we could hear more details surrounding this?

Hi, Steve. This is Mackie. We will continue to move forward. We expect to have the abandonment approval from FERC soon to be any day now. We are continuing to do everything we can to meet the timing to flow crude early as late '15 but probably sometime in 2016. We did have a significant interest in the project going to St. James, however, the outcome of the open season did not justify us building a line down to St. James, so with several customers we are in negotiations to transport that crude to another market and we continue to be very optimistic that we will ultimately fill up that pipeline with crude sometime in late 2016.

Okay. And Enbridge is still a partner with you on this?

No. Enbridge continues to figure out a way to deliver volumes from Western Canada down to Patoka, so certainly we would welcome interconnect with them once we're in service and provide transportation for their customers as well as other pipelines that come into the Patoka area.

Okay. And has anything changed on the CapEx front with respect to that project in terms of what you guys would be potentially committing?

At such time that we have the commitments, we will of course design the pump stations and everything to meet those commitments. So it remains to be seen on exactly the market that we'll go to and how we'll size the pipe, but we hope to be able to talk much more openly by our next analyst call and our next earnings call to update you on that question.

Okay, thanks. And quickly just moving to Lone Star Frac II that came online, can you just talk about expectations for filling that plant to the 200,000 barrels a day? And then just the dynamics of the market right now, how viable is the potential third frac?

We continue to be just elated with our Louie Dreyfus purchase. Lone Star has been the one with better acquisitions that we've made as we settle our bag [ph] and we're diversifying our business. We are also very pleased with the timing of Frac II not only being early but also under budget and the way we contracted that is approximately 90% demand. It will Tier up throughout 2014 into 2015 and we're actually in negotiations on our third and possibly fourth frac.

Okay. Final one from me just on the distribution front, is it fair to think about the recent increases this quarter that the ETP and ETE is something that we can expect every quarter for the next several quarters, and do you expect ETE coverage to trend back to 1.0 times over the next few quarters as well?

Yes. This is Martin. I'll talk about ETP and then hand over to Jamie to talk about ETE. Obviously, we're very excited about resuming distribution rate growth at ETP. I think the power of the SXL unit swap combined with just what we've done over the course of last several years puts us in a very good position to not only start the resumption of distribution rate growth but continue that. And as Mackie just stated, we still see a lot of growth in our midstream NGL platform. I think retail will continue to deliver strong results. So that really sets us up for I think some nice growth and distributable cash flow and in turn rewarding our unitholders. They've supported us for so long and we got even more excited about being able to now increase that distribution rate and bring value to our unitholders again.

Steve, its Jamie Welch. On the ETE side, as I look out over the course of the next five quarters, I see RGP obviously and SXL as we think about growth that will certainly get us comfortable with getting to a 1.0 coverage. So while we're a little light for the third quarter, overall 0.93. I think what we see is we easily catch it up. We were very deliberate on the number that we increased. I think we were very deliberate with all the partnerships as to what we think is the right sort of distribution increase and we came up with numbers that we think we believe hopeful and sustainable. So with that in mind, we've obviously – I look forward and I really see a lot of concern about getting the 1.0 coverage and that's putting aside any potential net benefit from the refinancing that we're currently undertaking in ETE.

Okay, great guys. Thanks a lot for the call. See you soon.

Thanks, Stephen.

We still have a few questions. Our next question is from the line of Darren Horowitz of Raymond James. Please go ahead.

Morning, guys. Just a couple of questions from me. Martin, I appreciate the update on the Lake Charles LNG facility and recognize that you guys are going to get into a lot more detail pretty soon here, but Jamie I just had a quick question. I know that you had talked about possibly the ability to move quicker with those non-FTA permits there. So can you just give us a little bit more color on that? And also in terms of adding the successive trains beyond that 2019 date, has anything changed there in terms of accelerated time?

No, Darren. As far as non-FTA we've got our 50 million tons per annum approved beginning of the [indiscernible] 20-year duration which is consistent with what DOE has done for each of the projects just given the EIA forecast that they base it on. Our current viewpoint is actually driven more by finalizing technologies, so the decision between APCI which is their products and Optimized Cascade which is the Phillips alternative, then deciding on what as the actual design and then filing with the FERC. The FERC will take us about 12 months and we're anticipating that we will file after FERC approval at the end of the first quarter of '14. That would then put us into 12 months from that point for seeking final approval from FERC and then obviously looking to actually close, have financial closing and financial investment decision or FID as they call it. That would then put you in midst of 2015 which I think we had been pretty consistent about. At the earliest you could see 40 months. I mean lot of people would tell you different things, certainly the guys, (indiscernible) and Michael Smith and others. 40 months is probably the earliest you can see it trying to get done, which will put you in like 2018, much likely its 48 months which is actually probably what we get as the guarantee completion date from our contractor. 48 months from mid 2015 puts you at mid 2019. Nine months a click for each train. So train 1 mid 2019 in the first quarter for 2020 for train 2 and then train 3 1-1-2021. That would be at least literally reading all the contracts and saying this is exactly what it is and get doing now better, but obviously you try to incentivize the contractor and try to do better. We’d like to sort of add gas and oil if we could, a lot of that would just be depending upon what happens over the full-year as we’re building the plan.

Okay. I appreciate the color, that’s helpful. And then, and final question for me Mackie, I am just curious with regard to all of the liquids growth that you guys see coming out of the Permian, I mean, I know that you got the opportunity to move some of that to Godley and then if you want to go south to Kennedy and possibly Jackson and of course there are expansions there, but it seems like what's going on with Jackson obviously is going to be fed by everything coming out of the South Texas Eagle Ford. So, I’m wondering as you guys take more vertically integrated, getting more wide grade into Belvieu possibly feeding a third or as you mentioned Mackie maybe even a fourth frac. How do you think about handling the Permian volumes?

Well, that is one of the decisions we regret. We built the 16-inch; we should have built a 20-inch. We continue to, as we do across our entire network in the United States look at repurposing other pipelines for example gas pipelines, the NGL service. So we certainly are very on top of and aware of the volume growth that’s anticipated not only NGL, but also crude out of West Texas and we are planning ways to address that. In the meantime over the next year and half, two years our plans are to ramp up and fill up our 16-inch in our North Texas line and then meet additional needs as we concentrate contracts for those needs.

If you add more hydraulic pressure, can you get north of that 210,000 barrels a day on that 16-inch West Texas Gateway line?

You can. You’ve got some economic issues from electricity cost. We however can more economically loop and add 50,000 or 60,000 barrels fairly easily depending on where those barrels enter the system. So, we will continue to analyze the hydraulics on that system, in all of our systems so that we can optimize and move as much volume as economically possible as we can.

Okay. Thanks, Mackie.

Thank you for your questions. Next question is from the line of Ethan Bellamy of Baird. Please go ahead with your question.

Hi, guys, good morning. With respect to LNG; Kelcy do you see LNG exports longer term reopening Texas gas differentials? And then secondly, beyond Trunkline; do you have an appetite to own more of the U.S. export LNG market?

Yes to both, and then -- then I’ll elaborate how. If you look at Cheniere’s facility which is real being built, if you look at Freeport, it's real, it's being built and you loop forward and then you, and just think like its hot water. If you hydraulically examine how the heck, we get gas to those facilities and then you add Lake Charles to that, there’s no question basis will expand, there’s no question. I’m not suggesting that there’s any rep that the supply will not be there. I’m not suggesting that it will be. It's just a hydraulic challenge to deliver that much gas to those locations compounded with there’s tremendous growth along the Gulf Coast right now in the petrochemical market, and also we believe that -- and we think we’ll demonstrate this but there will be growth in exports to Mexico. So, we are very optimistic that basis comes back. And I’m glad you asked that question because that’s kind of a forgotten thing around here. Everybody, and then rightfully so believes that this will be steady state. But if basis comes back, I think you know that what that means to ETP. And then the next question. Absolutely; we are looking at the possibility of growing the LNG export business. Of course as Jamie answered a moment ago; we have a long way to go, we don’t have a project yet. So that’s getting the cart ahead of the horse a little bit, but we’re very open minded to expanding that side of our business only if it is structured in a manner which would not financially stress ETP in any way, and I believe we have a good plan for that.

Thanks, Kelcy. And then one more, is Penn Virginia the restart of an M&A trend or is that a one off opportunistic trade?

No, and thank you for that question. I can’t really talk about, and I really mean this. We take the complex very seriously with Regency. I’m pleased with what I am seeing from Regency, in Virginia acquisition I think that was the right thing to do for them. I think it's good for the unit holders long-term. And I think they’ll prove that’s the market I’m confident they will. So, I’m very pleased with that. We are back in the M&A business at ETP as well. Now, what does that mean? We’re probably not going to hit you with $19 billion of acquisitions the way we did over the past three years, but good they’ll still see some strategic, very strategic moves on ETP’s part over the next 12 months suddenly and we’re working hard in that area now to have -- and everybody I think on this call knows, you really can’t run them off incorrectly, and those who try to do it will fail. You can’t run it with organic growth. Everybody loves that, it's a great story and we do too. You get to a certain size, you got to have the right mix of M&A activity with organic growth or you shouldn’t be in this business. And ETP recognizes that and we will be back in M&A business.

Always appreciate the candor Kelcy. Thank you.

Thank you.

Thank you for your questions. The next question is from the line of Ross Payne with Wells Fargo. Please go ahead. Hi, Mr. Payne your line is live. Please go ahead and ask your question. Hi, Mr. Payne we can’t hear you.

Hello. Can you hear me?

Yes we can.

We hear you now.

Okay, sorry about that. On Trunkline with Enbridge being involved in that, are they still going to be at 50% partner in that transaction in terms of the CapEx?

Well, the open savings that we had that we ran concurrent with Enbridge had ended. As we mentioned before they had their infrastructure of course from Canada all the way down to Cushing and looking to expand that from Flanagan down to Patoka. So we will continue to be in dialogue with them and their customers to receive volumes off of their system. But we’re -- Trunkline we’re working on our own of ETP to fill up that project for multiple sources to different markets around the Gulf Coast.

Okay. Thanks, Mackie. I appreciate it.

Okay.

Okay, thank you for your question. Ladies and gentlemen that concludes the question-and-answer session. I’d now like to turn the conference back to Mr. Martin Salinas for closing remarks. Thank you.

Great. Again, thanks everyone for your time this morning and have a great day.

Thank you all for joining ladies and gentlemen. That concludes today's conference call. You may now disconnect your lines. Have a good day. Thank you.