Risk Management (Tables)

9 Months Ended

Sep. 30, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

As of September 30, 2012, we had entered into the following outstanding commodity forward contracts to hedge our forecast energy commodity purchases and sales:

	Net open position long/(short)
Derivatives designated as hedging contracts
Crude oil	(20.5) million barrels
Natural gas fixed price	(27.6) billion cubic feet
Natural gas basis	(27.6) billion cubic feet
Derivatives not designated as hedging contracts
Natural gas fixed price	(0.6) billion cubic feet

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The following table summarizes the fair values of our derivative contracts included on our accompanying consolidated balance sheets as of September 30, 2012 and December 31, 2011 (in millions):

Fair Value of Derivative Contracts
		Asset derivatives				Liability derivatives
		September 30, 2012		December 31, 2011		September 30, 2012			December 31, 2011
	Balance sheet location	Fair value		Fair value		Fair value			Fair value
Derivatives designated as hedging contracts
Energy commodity derivative contracts	Current-Fair value of  derivative contracts	$	58	$	66	$	(39	)	$	(116	)
	Current-Assets held for  Sale / Accrued other  current liabilities	1		—		—			—
	Non-current-Fair value  of derivative contracts	52		39		(15		)	(39		)
Subtotal		111		105		(54		)	(155		)
Interest rate swap agreements	Current-Fair value of  derivative contracts	—		3		—			—
	Non-current-Fair value  of derivative contracts	652		593		—			—
Subtotal		652		596		—			—
Total		763		701		(54		)	(155		)
Derivatives not designated as hedging contracts
Energy commodity derivative contracts	Current-Fair value of  derivative contracts	1		3		(2		)	(5		)
	Non-current-Fair value  of derivative contracts	1		—		—			—
Total		2		3		(2		)	(5		)
Total derivatives		$	765	$	704	$	(56	)	$	(160	)

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The following two tables summarize the impact of our derivative contracts on our accompanying consolidated statements of income for each of the three and nine months ended September 30, 2012 and 2011 (in millions):

Derivatives in fair value hedging relationships	Location of gain/(loss) recognized in income on derivatives	Amount of gain/(loss) recognized in income on derivatives and related hedged item(a)
		Three Months Ended September 30,						Nine Months Ended September 30,
		2012			2011			2012			2011
Interest rate swap agreements	Interest expense	$	28		$	437		$	109		$	501
Total		$	28		$	437		$	109		$	501
Fixed rate debt	Interest expense	$	(28	)	$	(437	)	$	(109	)	$	(501	)
Total		$	(28	)	$	(437	)	$	(109	)	$	(501	)

___________

(a) Amounts reflect the change in the fair value of interest rate swap agreements and the change in the fair value of the associated fixed rate debt, which exactly offset each other as a result of no hedge ineffectiveness.

Derivatives in cash flow hedging relationships	Amount of gain/(loss) recognized in OCI on derivative (effective portion)(a)					Location of gain/(loss) reclassified from Accumulated OCI into income (effective portion)	Amount of gain/(loss) reclassified from Accumulated OCI into income (effective portion)(b)						Location of gain/(loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)	Amount of gain/(loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)
	Three Months Ended September 30,						Three Months Ended September 30,							Three Months Ended September 30,
	2012			2011			2012			2011				2012			2011
Energy commodity derivative contracts	$	(90	)	$	387	Revenues-Natural gas sales	$	2		$	—		Revenues-Natural gas sales	$	—		$	—
						Revenues-Product sales and other	—			(51		)	Revenues-Product sales and other	(5		)	8
						Gas purchases and other costs of sales	8			2			Gas purchases and other costs of sales	—			—
Total	$	(90	)	$	387	Total	$	10		$	(49	)	Total	$	(5	)	$	8
	Nine Months Ended September 30,						Nine Months Ended September 30,							Nine Months Ended September 30,
	2012			2011			2012			2011				2012			2011
Energy commodity derivative contracts	$	99		$	289	Revenues-Natural gas sales	$	4		$	1		Revenues-Natural gas sales	$	—		$	—
						Revenues-Product sales and other	(31		)	(203		)	Revenues-Product sales and other	(8		)	10
						Gas purchases and other costs of sales	17			13			Gas purchases and other costs of sales	—			—
Total	$	99		$	289	Total	$	(10	)	$	(189	)	Total	$	(8	)	$	10

____________

(a) We expect to reclassify an approximate $25 milliongain associated with energy commodity price risk management activities and included in our Partners’ Capital as of September 30, 2012 into earnings during the next twelve months (when the associated forecasted sales and purchases are also expected to occur), however, actual amounts reclassified into earnings could vary materially as a result of changes in market prices.

(b) No material amounts were reclassified into earnings as a result of the discontinuance of cash flow hedges because it was probable that the original forecasted transactions would no longer occur by the end of the originally specified time period or within an additional two-month period of time thereafter, but rather, the amounts reclassified were the result of the hedged forecasted transactions actually affecting earnings (i.e., when the forecasted sales and purchase actually occurred).

Derivative Credit Risk

The maximum potential exposure to credit losses on our derivative contracts as of September 30, 2012 was (in millions):

	Asset position
Interest rate swap agreements	$	652
Energy commodity derivative contracts	113
Gross exposure	765
Netting agreement impact	(39		)
Cash collateral held	—
Net exposure	$	726