INVESTOR DAY – Altagas Limited

Altagas Limited · Nov 13, 2013 · 112 slides

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AltaGas Ltd. Investor Day 2013
AltaGas Ltd. Sustainable value creation & significant growth Investor Day 2013 1
Forward-looking information This presentation contains forward-looking statements. When used in this presentation the words may, would, could, will, intend, plan, anticipate, believe, seek, propose, estimate, expect, and similar…
Agenda 1:45 - 1:50 p.m. Welcome 1:50 - 3:00 p.m. Strategic overview David Cornhill, Chairman & Chief Executive Officer Creating value from our strong base business David Harris, Chief Operating Officer 3:00 - 3:15 p.m. Break 3:15 -…
Strategic overview David Cornhill Chairman and Chief Executive Officer 4
We have a clear vision To be a leading North American energy infrastructure company with a focus in Canada and the northern and western United States See forward-looking statements & information 5
We are realizing our vision 8 billion enterprise Normalized EBITDA value1 Gas Utilities 34% 2 Bcf/d of natural gas 39% transacted Power 27% 2013 TTM3 1,372 MW of power generation in 5 fuel types2 US 5 Utilities serving nearly…
We execute our strategy and deliver results TSR We understand the landscape 1999 2013 We seize opportunities = 874%2 We respond nimbly 6.7 B We are financially disciplined TSR 2.6 B 2013 1994 Total assets 1.0 B 4.4 B 37 K 437…
Our success is driven by people Our people are our greatest We build long-term asset: relationships and provide sustainable benefits to Over 1,500 employees in 64 the communities in which offices in Canada and the US we operate…
It was all about clean energy and abundant natural gas Our midstream Gas infrastructure processes and moves natural gas to key markets Natural gas renaissance Our natural gas Our power assets utilities deliver clean…
We deliver on our commitments Billion 5 Adding over 4 billion in 4 growth since 2009 3 2 1 0 2009 2010 2011 2012 2013 TTM1 2013 TTM 1 Asof September 30, 2013 10 See forward-looking statements & information
We deliver results Normalized EBITDA Total shareholder return2 Annual dividend 50% 485M 1.53 40% 337M 30% 1.40 266M 20% 1.33 10% 0% 2011 2012 2013 2013 2011 2012 20132 2011 2012 20133 2013 TTM1 TTM* -10% 2011:…
Strong base for dividend growth Increasing our dividend and decreasing our payout 55% 1.55 1.53 1.5 50% 1.45 1.4 45% 1.40 1.35 1.33 1.3 40% 1.25 35% 1.2 1 2011 2012 2013 Dividend ratio2 Payout Ratio 1 Annualized…
We deliver stability and predictability /Mmbtu AECO natural gas /MWh Alberta pool price Cumulative YOY TSR 6.00 120 prices 140% 120% 5.00 100 100% 4.00 80 80% 3.00 60 60% 2.00 40 40% 1.00 20 20% 0.00 0 0% 2009 2010…
Clear line of sight to EPS & FFO growth Earnings per share3 Funds from operations3 2.50 600 500 2.00 398 M 400 1.50 300 1.00 200 0.50 100 0.00 0 2012 2012 2013 2013TTM 2014F2 2014 2016F2 2016 2012 2013 TTM* 2013…
It still is all about clean energy and abundant natural gas Our midstream Gas infrastructure processes and moves natural gas to key markets Natural gas renaissance Our natural gas Our power assets utilities deliver clean…
Abundant natural gas supply driving growth in Gas Significant growth Liquids-rich New markets for in reserves production our customers 30 Tcf per year of natural 2/3 of processing capacity Increased energy logistics gas production…
Demand for clean energy driving growth in Power Alberta1 California2 MW MW 10,000 16,000 9,000 14,000 8,000 12,000 7,000 6,000 10,000 5,000 8,000 4,000 6,000 3,000 4,000 2,000 2,000 1,000 0 0 Forecasted Expected New…
Demand for clean energy driving growth in Utilities Our Utilities deliver clean and Rate base growth through volume affordable energy across North America demand and system betterment1 Million 1,000 800 600 400 2012…
Significant growth between 2014 - 2018 Gas Power Utilities 2.5 billion in base business growth opportunities See forward-looking statements & information 19
Natural gas renaissance driving energy exports New global markets offer higher prices1 The US is becoming energy self-sufficient2 US/Mmbtu Tcf 20 40 18 35 16 30 14 25 12 20 10 15 8 10 6 4 5 2 0 0 -5 20052005M12…
The west coast advantage Closest gateway to Asia Lower temperatures for efficient operation Competitive and stable supply Vast resource Less political risks See forward-looking statements & information 21
AltaGas energy export advantage Extraction capacity A global leader in the Logistics network of and access to WCSB supply of energy, over 1,500 rail cars supply petroleum, lubricants and 24 rail and truck and petrochemical…
2 - 5 billion in energy export opportunities See forward-looking statements & information 23
On our way to 10 billion 2.5 billion Gas Power Utilities in base business growth 2 5 billion Gas Power Utilities energy exports See forward-looking statements & information 24
10 billion and beyond Billion 11 Future investment 10 opportunity: 9 4.5 - 7.5 billion 8 7 6 5 4 3 2 1 0 2009 2010 2011 2012 2013 2014 2018 2014 2015 See forward-looking statements & information 25
We deliver strong growth and yield TSR growth 1999 20131 874% We deliver on our promises Weve increased shareholder value We have significant opportunities for future growth 1 Asof October 31, 2013 TSR based on 100…
Creating value from our strong base business David Harris Chief Operating Officer 27
Delivering certainty through operational excellence Power Safety & Talent Operations environment management management Gas Utilities Asset Capital Driving synergies optimization effectiveness across our business See…
AltaGas Gas portfolio Liquids-rich. Long-term. Contracted. Gas processing: Touching over 2 Bcf/d Processing capacity: 2/3 serving liquids-rich areas Growth: . Focused on maximizing asset utilization, building new infrastructure to…
Gas strategy driven by strong natural gas supply growth Canadas natural gas resources1 Canadas natural gas production average2 Bcf/d 25 20 15 10 5 700 1,300 TCF 0 2011 2020 1 Source:Canadian Society for…
Well positioned in the WCSB region Significant drilling activity in liquids-rich plays AltaGas has strategically positioned facilities Drilling continues to be active in the Montney Duvernay is showing very promising early…
Our gas business has evolved 2011 - 2013 2,953 Mmcf/d processing capacity Asset Capacity Year added (Mmcf/d)1 Gordondale 120 2012 Harmattan Co-stream 250 2012 Blair Creek + Marlboro 44 2012 expansions Gilby acquisition 32…
Expanding North American market reach Fort. St. John Grande Prairie Slave Lake Clair Redwater Ft. Saskatchewan Edmonton Ft. Saskatchewan East Lochearn Gooseberry Sundre Harmattan Rosedale Empress Yahk Calgary Regina Tatagwa…
Increasing throughput at JEEP Gilby and Sylvan Lake plants to be connected to JEEP via TransCanadas NGTL system JEEP will be debottlenecked to utilize full processing capacity and process additional gas from the NGTL system…
Increasing utilization at Cold Lake Expansion announced in August 2013 Providing gas supply to SAGD heavy oil projects near Cold Lake, AB Underpinned by long-term take-or-pay agreements Base case will double utilization of the…
Key takeaways for our Gas business Focused on safety, environmental stewardship, reliable and efficient operations Co-stream, Gordondale and Blair Creek are strategically positioned to capitalize on liquids-rich gas plays Long-term…
AltaGas Power portfolio Providing clean energy across North America Power generation: 1,372 MW1 5 fuel types: Wind, hydro, biomass, gas and coal Growth: -Cogen III -Forrest Kerr -Volcano -McLymont TTM EBITDA: 139M2 1Includes 277 MW…
Our power business has more than doubled 2011 - 2015 1,372 MW1 Asset MW2 Added to portfolio: Harmattan Cogen III 15 2015 McLymont 66 2015 Volcano 16 2014 Forrest Kerr 195 2014 Blythe 507 2013 Busch Ranch 14 2012 500 MW…
Alberta power market update 4.2 percent forecast average load growth over the next 5 years 3.6 percent forecast average load growth over the next 10 years 2.7 percent forecast average load growth over the next 20 years Aging coal…
Cogen III Delivering organic growth Provides strong 15 MW expansion at Harmattan facility for a total of 45 MW returns and capitalizes on Meeting the increased power demand synergies at the at Harmattan Harmattan Potential to…
Meeting the demand for clean energy in California Consistent with AltaGas strategy of increasing its clean energy portfolio 507 MW natural gas-fired combined cycle power plant First major acquisition Seven-year PPA EBITDA 50 million…
Forrest Kerr Overview Powerhouse Mechanically complete by end of 2013 195 MW capacity 60-year fully indexed EPA with BC Hydro Capital cost estimate: 725 million 100 million annualized EBITDA Commercial in-service estimate:…
Forrest Kerr underground powerhouse Fall 2012 November 2013 43
Forrest Kerr weir January 2013 May 2013 44
Forrest Kerr intake July 2012 November 2013 45
Strong capacity factor of 55 to 60 percent Estimated annual Predictable, sustainable hydrology EBITDA forecast1 Discharge (M3/s) 900 Water flow used for generation 800 700 600 500 400 300 200 Design discharge of…
Forrest Kerr: Ahead of schedule and on budget Milestone Status Turbine generator installation In progress Mechanically complete Q4 2013 Switchyard complete Q1 2014 Install transmission line Q1 2014 Mechanical and electrical fit out Q2…
Volcano Creek Overview Powerhouse 16 MW capacity 60-year fully indexed EPA with BC Hydro In-service 2014, two years ahead of schedule See forward-looking statements & information 48
Completing Volcano Creek Powerhouse Headrace canal Weir 49
Volcano Creek powerhouse March 2013 November 2013 50
Volcano Creek: Ahead of schedule and on budget Milestone Status Construct powerhouse building Complete Complete weir and headrace canal Complete Install penstock Q2 2014 Install transmission line Q3 2014 Install electrical and mechanical…
McLymont Creek Overview Tunnel 66 MW capacity 60-year fully indexed EPA with BC Hydro In-service estimate moved up to Mid-2015 See forward-looking statements & information 52
McLymont Creek Power tunnel Power tunnel Intake access road 53
McLymont Creek power tunnel April 2013 November 2013 54
McLymont Creek bridge construction January 2013 April 2013 55
McLymont Creek: Ahead of schedule and on budget Milestone Status Complete intake access road Q1 2014 Complete 2.7 km tunnel Q3 2014 Construct transmission line and switch gear Q3 2014 Construct powerhouse and tailrace Q3 2014 Construct…
Key takeaways for our Power business Focused on safety, environmental stewardship, reliable and efficient operations Diversified portfolio by generation type and geography deliver long-term stable cash flow Demand for clean energy…
AltaGas Utilities portfolio Delivering clean and affordable energy to homes and businesses Alberta AUI: Albertas second largest natural gas utility British Columbia PNG: Only natural gas pipeline in the BC LNG corridor Nova Scotia…
Utilities strategy driven by North Americas demand for clean and affordable energy Provide safe, reliable and cost-effective natural gas distribution Grow existing infrastructure through infill and expansion of services Continue to…
Our Utilities have more than doubled 2013 rate base = 1.3 billion 2011 rate base = 500 million See forward-looking statements & information 60
Utilities expansion driving earnings growth First full year exceeded expectations Million SEMCO EBITDA 140 Q3 2013 120 Q2 2013 100 80 Q1 2013 60 40 20 Q4 2012 0 See forward-looking statements & information 61
Demand for clean and affordable energy drives strong rate base growth Growing volumes Rate base growth1 Greenfield expansion Million 1,000 Fuel switching Natural gas-fired power 800 generation 600 400 2012 2013F 2014F 2015F…
Strong rate base growth drives earnings growth 500 million increase in rate base over Million next five years 600 500 400 300 200 100 0 2014 2015 2016 2017 2018 Capital Spend Depreciation See forward-looking…
CINGSA expansion opportunity The only natural gas storage facility serving Cook Inlet utility customers Current capacity of 11 Bcf; potential opportunity to expand to 17-18 Bcf Expansion subject to regulatory approval See…
Key takeaways for our Utilities business Focused on safety, environmental stewardship, reliable and efficient operations Stable regulated returns drive earnings and cash flow stability Focused on growing our utilities infrastructure…
Clean energy and abundant natural gas Our midstream Gas infrastructure processes and moves natural gas to key markets Natural gas renaissance Our natural gas Our power assets utilities deliver clean Utilities Power generate…
Delivering on the next phase of growth John Lowe Executive Vice President Corporate Development 67
Clean energy and abundant natural gas With growing demand for Gas clean natural gas and abundant supply, we have ample opportunities to grow our Gas business Natural gas With abundant renaissance With growing and affordable…
Abundant liquids-rich natural gas supply drives growth in Gas Liquids-rich production drives growth in Map will be redesigned midstream infrastructure Drilling plans support independent midstreamers Strategically located Blair…
Natural gas demand drives storage opportunity Construct and operate natural gas storage facility (50 percent ownership) Meets growing demand for natural gas in the area Brings price stability and supply security to the region…
Vast opportunities for regional LNG Market size in AltaGas core regions The equivalent of 16 - 18 million gallons of LNG is used per day in AltaGas core regions = Targeting 5 10 percent over next decade Source: US Energy…
Significant value proposition Customers LNG value chain1 25 to 40 percent savings to diesel Payout 2 to 5 years Value proposition Competitive advantage by reducing energy cost AltaGas Material EBITDA and returns Product diversity…
Demand for clean power drives growth North American net North American electricity Billion KWh electricity generation1 GW generating capacity by type1 7,000 800 6,000 700 600 5,000 500 4,000 400 3,000 300 2,000 200…
Demand for clean energy in California drives growth Expected retirements support the MW Blythe expansion opportunity1 16,000 14,000 12,000 10,000 Over 14,000 MW 8,000 expected 6,000 to be retired 4,000 2,000 0 2013 2014…
Blythe Energy Center Consistent with AltaGas strategy of increasing its clean energy portfolio Opportunity for expansion Strategically located with access to California and Arizona Many major utilities located in the region Gas…
Alberta power market opportunity 4.2 percent forecast average load growth over the next 5 years 3.6 percent forecast average load growth over the next 10 years 2.7 percent forecast average load growth over the next 20 years Aging…
Significant growth between 2014 - 2018 Gas Power Utilities 2.5 billion in base business growth opportunities See forward-looking statements & information 77
World demand for LPG drives export opportunity Extraction capacity and access to WCSB supply Track record of delivering large scale infrastructure Access to key infrastructure and logistics networks Global marketing…
Unlocking the value of LPG Alberta propane supply Thousand bbls/d 120 100 80 60 40 20 0 2014 2015 2016 2017 2018 2019 2020 Total AB propane demand Remainder available for export Total AB propane production Source:…
Strong capability to deliver LPG exports Access to NGL suppliers and markets Aux Sable Petrogas Keyera Dow Chemical Canada Petrogas storage, truck and rail terminals located in the heart of Fort Sask., Sarnia and US…
Idemitsu opens the door to new markets Idemitsu Kosan: Global leader in the supply of energy International LPG experience 51 percent ownership of Astomos Energy Astomos Energy: One of the largest LPG suppliers in the world Handles…
Building blocks for LPG export opportunity Ample propane supply Rail and logistics via Petrogas Market through Astomos and other off-takers Floating LPG pre-FEED in progress Site options on west coast being evaluated June 2014…
World demand for natural gas drives LNG growth US/mmbtu 18 16 14 12 10 8 6 4 2 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Japan liquified natural gas Europe natural gas US natural gas U.S. Source:…
The west coast advantage Bcf/d 18 Closest LNG 16 gateway to Asia 14 Lower temperatures 12 450 percent increase in unconventional for shipping 10 gas supply from 2013-2030 Low cost supply 8 6 Growing supply 4 Stable…
PNG pipeline expansion PNG pipeline expansion Increase capacity of PNG system to 750 Mmcf/d from current 115 Mmcf/d Reduced tolls expected to existing customers Transportation Reservation Agreements backstop development…
Building blocks for PNG expansion Ample supply of natural gas Transportation Reservation Agreements PNG FEED and permitting cost supported by shippers PNG project description filed with BC EAO Section 11 order issued First…
Floating LNG advantages Smaller environmental footprint Potentially shorter lead time for development Cost control advantages Lower site remediation Enhanced mobility See forward-looking statements & information 87
Building blocks for LNG exports NEB application filed by AIJV October 29 Site options being evaluated Pre-FEED studies in progress Competitive price to Gulf Coast and west coast advantages Receptive Japanese market June 2014…
AltaGas strategic assets Supply See forward-looking statements & information 89
Benefits of LNG opportunities on base business New demand Gas for processing capacity LNG New demand export Power for gas-fired initiatives generation Increasing our Utilities pipeline capacity See forward-looking…
We have significant opportunities for future growth See forward-looking statements & information 91
Disciplined financing Debbie Stein Senior Vice President & Chief Financial Officer 92
Disciplined financing supports our strategy Ensure strong access to capital markets Maintain investment grade credit ratings Maintain competitive cost of capital Maintain ample liquidity, balance sheet strength and flexibility…
Executing our finance strategy Maintaining strong credit ratings Supports access to capital markets Competitive cost of capital Entity Rating agency Debt and preferred rating(s) Outlook DBRS BBB/Pfd-3 Stable AltaGas S&P BBB/P-3…
Manageable debt maturity profile 20091 20132 Million Million 250 600 500 200 400 150 300 100 200 50 100 0 0 AltaGas Ltd. AltaGas Ltd. SEMCO PNG 1 Asof December 31, 2009 2 Asof September 30, 2013 95 See…
Creating significant shareholder value Net income1 FFO1 EBITDA1 /share /share /share 1.60 4.00 5.00 4.50 1.40 3.50 4.00 1.20 3.00 3.50 1.00 2.50 3.00 0.80 2.00 2.50 2.00 0.60 1.50 1.50 0.40 1.00 1.00 0.20 0.50 0.50 0.00…
Delivering growth and security Dividend growth Dividend payout3 1.53 51% 47% 1.40 41% 1.33 2011 2012 2013 2013 1 TTM* 2011 2012 2013 TTM2 2013 TTM* 1 Annualized dividend based on 0.1275 per month 2 As of September 30,…
Second to one Current dividend payout as a percentage of 2013F AFFO1 100% 75% 50% 25% 0% 1 Source:TD Equity Research as of October 2013 98 See forward-looking statements & information
Our growth has translated into significant investor value Total return on 1001 350 324 AltaGas Ltd. (CAGR = 27%) 300 250 S&P/TSX Composite Index (CAGR = 12%) 200 171 150 100 50 1 Asof October 31, 2013 Source:…