INTRODUCTION Sanjay Lad, Director Investor Relations, Enbridge Energy Partners and Midcoast Energy Partners
STRATEGIC OVERVIEW - EEP Mark Maki, President, Enbridge Energy Partners
Key Messages Distribution sustainable Coverage strengthens as projects enter service; highly certain cash flows Strong and aligned general partner Annual distribution growth target: 2% to 5% Unrivaled Liquids Pipeline asset position…
Investment Highlights Strong Investment Commercially Enterprise Value - Grade (S&P, Moodys) secured organic Low-risk transformative Large-Cap MLP growth underway growth underway Highlights Total Shareholder Return One of the…
Strength of GP Enbridge Inc. ENB: North American leader in energy delivery Owner and operator of largest crude oil pipeline system 37 billion equity market cap Strong investment grade (A-, Baa1) Proven track record: industry…
Strategic Position Market Access Programs Bolster Strategic Position Fort McMurray Liquids Pipeline System Edmonton Competitive Advantages: Hardisty Kerrobert Scale post-2017: 2.85 million bpd Regina +300 Cromer Gretna…
Commercial Structure & Risk Profile Crude oil projects progressively transform EEP to lower risk business model (Unconsolidated view) 100.0% 24% 80.0% 59% Fee-Based 60.0% 40.0% 18% Commodity Sensitive 76% 20.0%…
Strengthening Distribution Coverage Secured growth projects deliver highly certain cash flows 1.25x Long Range 1.00x Coverage Target 0.75x Accretive growth underway Coverage* Backed by long-term, low risk commercial…
Executing on Funding Plan Manageable funding outlook 2013 Financing Actions General Partner is aligned with Preferred Unit Private Placement +1.2 Billion and invests in EEP Midcoast Energy Partners IPO +675MM* Enhanced financing…
Drop-Downs Bolster Funding Program Near Term First Drop-Down to MEP mid-2014 (300500 million) Drop-down remaining interests in gas business to MEP within five years Gas-Focused Operations Liquids-Focused Operations Current…
Growth Outlook Liquids Pipelines organic growth program underway New infrastructure, expansion and market access Highly certain returns and long term cash flows Execute on growth program Deliver projects on-time and on-budget…
Long-Term ENB Liquids Drop-Down Potential: 10 Billion + Distributable Cash Examples: Capital Cost/ Pipeline System Upsize Option Book Value* Eastern Access 0.4 (2016/2017) 1.5 Mainline Expansion 0.4 (2016/2017) 1.4 Alberta…
Operational Reliability & Project Execution Operational Project Reliability Execution Project Development Third Party Damage Avoidance and Incident Response Detection Capacity Supply Chain Management Leak Detection Employee…
Key Takeaways Strategic position supported by strong business fundamentals Secured Liquids projects collectively further transform the Partnership to even lower risk business model Coverage strengthens as projects enter service…
Corporate Structure Enbridge Inc. owns Enbridge Inc. 21% of EEP 11.7% of listed shares (NYSE: ENB) 100% voting interest (Baa1 / A-) Enbridge Energy Management, L.L.C. 2% GP interest 88.3% of (NYSE: EEQ) 16.3% LP interest…
LIQUIDS PIPELINES Guy Jarvis, President, Liquids Pipelines, Enbridge Inc.
Key Messages Strong North American crude oil supply fundamentals Market access program bolsters competitive position Lakehead system ideally positioned Enbridge will continue to be premier liquids pipeline system to provide access…
North American Crude Oil Supply Growth (2013 2025) + 7 MMbpd by 2025 MMbpd 4.0 Cardium, Viking, Duvernay 3.5 Niobrara 3.0 Other 2.5 Permian Basin 2.0 Oil Sands Eagle Ford 1.5 1.0 0.5 Bakken 0.0 Heavy Light Sources:…
US Refining Crude Coverage North American Production Displaces Waterborne Imports MMb/d 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 2013F 2015 2020 2025 US Production Waterborne Imports Imports from Canada Sources:…
North American Crude Oil Price Fundamentals Significant Infrastructure Investment Opportunities Light Differentials Asia Brent WTI 6 112 94 Alberta Light LLS WTI 3 102 79 WCS Asia WTI 12 WTI Bakken 6 94 Bakken WTI - Alberta…
WCSB Supply Forecast vs. Pipeline Takeaway Capacity* MMb/d 9.0 Keystone XL Supply Forecast ENB Northern Gateway 8.0 TransMountain Expansion Energy East 7.0 6.0 5.0 4.0 3.0 ENB 2.0 1.0 OTHER 0.0 2013 Enbridge Forecast 2013…
Bakken Crude Oil Supply vs. Pipeline Takeaway Capacity MMb/d 2.5 2.0 Range of External 1.5 Supply Forecasts 1.0 Enbridge Sandpiper* Plains Bakken North Baker Take-away (Platte) 0.5 Enbridge Berthold Rail ND Enbridge…
Strategic Position Competitive Advantages Norman Wells Refiners Access to multiple crude streams Producers Zama WCSB Access to multiple premium markets Fort McMurray Edmonton Flexible system Hardisty Size and scale…
Providing New Market Access Opening New Markets for up to 1.7 million barrels per day + 1.0 MMbpd of Heavy and + 0.7 MMbpd of Light Norman Wells Eastern Access Light Oil Market Zama Fort McMurray +250 kbpd Light Access +50…
Market Access Eastern Access Linking North American crude supply growth to eastern refining centers Hardisty Montreal 1 5 Superior 4 Westover Sarnia 1. 1 Line 5 Expansion +50 Mb/d (In-Service) Chicago 2. 2 Spearhead North…
Market Access US Gulf Coast Linking North American crude supply growth to USGC refining centers 4 5 EEP/ENB Funded ENB Funded Refining center Chicago/ Flanagan Seaway Pipeline 400 Mb/d (In Service) 2 1 2 Flanagan South…
Bakken Infrastructure EEP pipeline takeaway will reach 580 kbpd with next phase of expansion Enbridge Mainline Saskatchewan System (ENF) North Dakota System (EEP) 210 Mb/d Bakken Pipeline (EEP, ENF) Manitoba 145 Mb/d Bakken…
Bakken Expansion Sandpiper Pipeline Hardisty Regina Gretna Montreal Clearbrook Superior Sandpiper (2.6 B) Westover Scope: 610 mile, 24/30 pipeline Sarnia Capacity: 225 kbpd/375 kbpd Target in-service: Early 2016 Toledo…
Line 3 Replacement Line 3: Part of Enbridge mainline system Replace all remaining segments from Hardisty to Superior with latest available high strength steel and coating technology EEP Capital Investment: border to Superior 2.6…
Growth and Project Integration Market Access Programs Bolster Lakehead System Utilization Fort 2013 McMurray Bakken Pipeline Expansion+ Berthold Rail - EEP Line 5 Expansion (+50 kbpd) - EEP Line 62 Expansion (+105 kbpd) - EEP…
Safety and Operational Reliability Risk Management Risk Policy, Risk Framework, Risk Culture Survey + Training Inline inspection (ILI) Significant dig program 3,400 pipe joints examined followed with non-destructive testing…
Key Takeaways Strong North American crude oil supply fundamentals Market access program bolsters competitive position Lakehead system ideally positioned Enbridge will continue to be premier liquids pipeline system to provide access…
MAJOR PROJECTS Byron Neiles, Senior VP, Major Projects, Enbridge Inc.
Key Messages 31B portfolio represented by 35 projects 11B EEP portfolio represented by 11 projects Scalable workforce, strong supply chain relationships Effective permitting approach Unwavering commitment to safety Proven…
Major Projects A Core Competency President & CEO Al Monaco Senior VP Major Projects Byron Neiles VP CDN Liquids VP Offshore & VP U.S. Liquids VP U.S. Liquids VP CDN Oil VP EPC and & Green Gas Execution Execution Execution…
Project Development Expertise Well known corridors Comprehensive historic project and market cost data Reliable cost estimating and schedules Standardized designs Team of technical experts 4
Secured Supply Chain & Resources Enbridge Pipe vs. Market Pricing Multi-year frame agreements US / Short Ton Pipe Enbridge Market Growing & diversifying supply chains Jan-10 Apr-10 Jan-11 Jan-12 Oct-10…
Regulatory and Permitting Effectiveness Received 100% of permits applied for since 2010 Proactive stakeholder engagement Thorough and transparent land and environmental reviews Emphasis on integrity & safety 6
Path to Zero Safety Culture MP Historical Safety Performance 10,000+ temporary workforce 3.0 MP TRIF Frequency 3 Year Rolling Avg 2.5 2.0 50% Record field hours 1.5 1.0 1.50 1.28 0.5 1.04 1.00 Significant focus on leading…
Proven Execution Track Record Disciplined control: cost, schedule and quality Rigorous risk identification and mitigation Extensive governance and reporting Repeatable execution Experienced teams 8
Eastern Access Phases 1 & 2 The Project: Line 6B 210 mile pipe replacement New pump stations, tankage and terminal upgrades Line 62 Horsepower Expansion Cost: 2.1 Billion* In-service date: Range of ISDs 2013 2014 Status: 160…
U.S. Mainline Expansion The Project: Ph. 1: Line 67 450 kbpd to 570 kbpd Line 61 450 kbpd to 560 kbpd Ph. 2: Line 61 560 kbpd to 1,200 kbpd Ph. 3: Line 67 570 kbpd to 800 kbpd Cost: U.S. Portion: 1.9 Billion* Status: In-service…
Sandpiper The Project: In-service date: Capacity 375 kbpd for 238 miles, 30 pipe 2016 Capacity 225 kbpd for 317 miles, 24 pipe Status: Capacity 250 kbpd for 57 miles, 24 pipe Right-of-Way acquisition ahead of plan 4 pump stations…
Line 3 Replacement The Project: Replace 1,031 miles of 34 pipeline with 36 pipeline Cost: U.S. Portion: 2.6 Billion* In-service date: 2017 Status: Reassembled successful Alberta Clipper project team Securing supply chain…
Beckville Plant The Project: 150 MMcf/d Cryogenic Natural Gas Processing Plant near Beckville, Texas Cost: 0.1 Billion* In-service date: 2015 Status: Key components procured early Construction contract awarded Construction…
Key Takeaways Executing with confidence Dedicated, scalable construction capability Rigorous controls and governance Disciplined processes Majority of projects tracking on time and budget Proven track record 14
STRATEGIC OVERVIEW - MEP Greg Harper, President, Gas Pipelines & Processing, Enbridge Inc. Principal Executive Officer, Midcoast Energy Partners, L.P.
Key Messages Execute growth strategy First drop-down post-IPO expected mid-2014 100% debt-funded Deliver target distribution growth rate Secure new growth opportunities Strengthen underlying business performance Deliver on…
Corporate Structure Enbridge Inc. owns Enbridge Inc. 21% of EEP (NYSE: ENB) (Baa1 / A-) 2% GP interest 16.3% LP interest (indirect) Enbridge Energy Partners, L.P. (NYSE: EEP) (Baa2 / BBB) 2% GP interest Public 52% LP…
Attractive Investment Proposition Peer Group Investment Highlights 39% interest in Midcoast 10% Operating 9% Remaining interest available for 8% MEP: 6.1% drop-down 3 billion (2) 7% Valuation to improve as we 6% execute on growth…
Enhanced Natural Gas & NGL Midstream Strategic Focus Gas-Focused Operations Liquids-Focused Operations Energy Partners, L.P. Pure-Play Natural Gas & NGL Midstream Enhances Strategic Focus of Partnership Increases Ability to…
Drop-Down of Natural Gas Business 100% Natural Gas business ownership 61% 39% IPO IPO 2014 NTM 9/30/14 2017e 2017E MEP EBITDA Growth Through. MEP to Acquire 100% of Midcoast Operating within 5 years 1st Drop-down…
Growth and Development Aligned and Supported by Sponsors Enbridge Inc. (ENB) A-/Baa1 37 billion equity market capitalization Enbridge Energy Partners, L.P. (EEP) BBB/Baa2 11 billion equity market capitalization Support of…
Lower 48 Natural Gas Production Forecast 110 100 90 BCF/day 80 70 60 50 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Enbridge Jan 2014 PIRA Oct 2013 Wood MacKenzie Nov 2013 CERA Dec 2013…
Natural Gas Demand Forecast 70 4 557 266 533 1,770 139 546 223 199 6 3 1,592 2,161 996 35 79 2013-2025 (mmcfd) 354 Coal retirements = 6,617 Industrial = 2,916 Midcoast assets located in single largest…
North American LNG Exports to Asia Increase Gas Demand North American LNG Exports 2016 LNG Exports to Asia 16.00 14 14.00 Asian Contract Price (13.43) 12 BC exports 3.07 Netback 2.68 12.00 Shipping 10 10.00 1.35 LNG Shrinkage…
Strong Production Growth Drives Infrastructure Investment US Midstream Infrastructure Requirements Base Case 120 45 40 100 35 80 30 Billions 25 Bcf/d 60 20 40 15 10 20 5 0 0 2014 2015 2016 2017 2018 2019 2020…
North American Production Growth Evolving Change in flows between 2013 and 2018 1.0 WCSB (0.5) 0.5 Rockies Appalachia 2.1 0.5 1.6 LNG Exports 1.2 0.6 (0.5) Red = Decrease Mid Continent (0.5) Blue = Increase 0.4 1.7…
Large-Scale, Diversified Business Key Assets Natural Gas Deliveries 2.5 bcf/d Anadarko System Gathering and Transportation Pipelines 11,400 miles Processing Capacity (26 plants) 2.3 Bcf/d Treating Capacity (11 plants) 1.3 Bcf/d…
Growth Outlook Secure and execute on growth opportunities Leverage existing asset base and pursue step-outs in close proximity Expand processing capabilities Pursue accretive acquisitions Complement and diversify existing asset…
Strategic Priorities First drop-down post-IPO expected mid-2014 Position for future drop-downs Aggressively pursue and secure organic growth Enhance value-added services to increase competitiveness of existing supplies Pursue new…
Key Takeaways Deliver target distribution growth First drop-down post-IPO expected mid-2014 Pursue and secure organic growth Strengthen underlying business performance Manage and pursue new opportunities - Reduce volume and…
NATURAL GAS Terrance McGill, President , Midcoast Energy Partners
Key Messages Enhance the profitability of our existing assets Leverage our large and strategically located asset base to pursue attractive organic growth opportunities Enhanced access to capital positions business to respond to…
Rich Gas Continues to Drive Production in our Regions /MMcf Illustrative Production Value 14.00 12.93 11.96 12.00 10.00 8.00 6.17 6.00 4.25 4.00 Nymex = 4.25 2.00 - East Texas East Texas Anadarko North Texas Cotton…
Supply Growth Driven by Liquids Plays Haynesville Production Forecast Barnett Production Forecast Anadarko Production Forecast 10 10 10 Annual Average (Bcf/d) Annual Average (Bcf/d) Annual Average (Bcf/d) 8 8 8 6 6 6 4 4…
NGL Production Growth Strong NGL supply outlook supports continued infrastructure and services growth Source: PIRA Global NGL Markets and the Growing Role of North America (Oct 10, 2013) 5
NGL Demand Outlook 1,800 1,600 Ethane 2,000 Propane exports 1,400 ethylene feedstock 1,200 1,500 1,000 MB/D industrial and other exports MB/D 800 markets 1,000 ethylene feedstock refinery propylene to chem 600…
Natural Gas and NGL Midstream Business Anadarko System Ajax Processing Plant in service 3Q 2013 Texas Express NGL System East Texas System In service 4Q 2013 Beckville Processing Plant expected in service 1Q 2015 CLINE SHALE…
Rig Counts Holding Steady Anadarko 6-County Rig Count, 52-Weeks (RigData) 160 Rigs Well Starts Permits 140 120 100 80 60 40 20 - APR 12 SEP 06 SEP 27 MAR 22 MAR 14 JUL 05 JUL 26 NOV 08 NOV…
Anadarko System Strategically Located in Texas Panhandle and Western Oklahoma Processing Plant Highlights Treater Plant Gas Pipeline Active rigs 53 rigs(1) Liquids Pipeline Texas Express Rigs drilling on 18 rigs(2) dedicated…
East Texas System Extensive Footprint in East Texas: Haynesville & Cotton Valley Processing Plant Highlights Treater Plant Active rigs 58 rigs(1) Gas Pipeline Rigs drilling on dedicated Liquids Pipeline 21 rigs(2) acreage Miles…
North Texas System Extensive Asset Footprint Processing Plant Highlights Gas Pipeline Liquids Pipeline Active rigs 42 rigs(1) Texas Express Rigs drilling on dedicated 4 rigs(2) acreage Miles of natural gas gathering and…
Texas Express NGL System Description of Assets Strategic Benefits NGL Mainline System Addresses Mid-Continent, Rockies and West Texas NGL constraints JV with Enterprise Products Partners (35%, operator), Enhances our competitive…
Understanding Volume Trends Substituting rich gas for dry gas Producers drilling wells, delaying completions Illustrative Production Values 10,000 1,400 10,000 1,200 Type Curve (Mcf/d) Type Curve (Mcf/d) Type Curve…
Business Opportunities: Gathering, Processing & Transportation Actionable Growth Opportunities Capture rich gas opportunities New pipeline laterals, NGL laterals, and compression projects Expand processing capabilities System…
Business Opportunities: Logistics & Marketing TexPan Rail Growth Oriented Value Added Midstream Solutions Expand takeaway solutions for customers Bundled service offerings Access premium markets to enhance customer netback…
Organic Projects Support Distribution Growth Incremental Growth Expected Description Cost Timing 2014 2015 2016 2017 150 MMcf/d cryogenic processing plant with In-service in a 2,000 Bpd condensate stabilizer 230 million Ajax…
Safety and Operational Reliability Comprehensive Integrity Management Program Increased line patrols, in-line inspections and incident response capabilities Control center enhancements Installation of EFRD (emergency flow…
Key Takeaways Enhance the profitability of our existing assets Enhance value of first and prospective drop-downs Leverage our large and strategically located asset base to pursue attractive organic growth opportunities Enhanced…
FINANCE EEP Steve Neyland, Vice President, Finance
Key Messages Long term value proposition Attractive yield combined with significant tax deferral Sustainable distribution Strong investment grade credit rating Secured Liquids projects collectively further transform the…
Delivering Prudent Growth - Liquids Attractive suite of low risk, fee-based organic growth secured Net Capital Capital Target EBITDA (MM) Cost EEP In-Service multiple (4) Risk Profile Bakken Growth Projects Long-term…
Risk Profile Lower Risk Business Model Crude oil projects progressively transform EEP to lower risk business model Unconsolidated View 2017e 32% 2015e 2013 27% 2008 18% Cost of Service/Take-or-Pay: Contribution from…
Capital Forecast and Liquidity Position Manageable capital expenditures outlook complemented by strong liquidity position Net Capital Forecast (2014- 2017) * Liquidity Position 12/31/2013 5,000 0.4 3,000 2,628 0.3 2,500 165…
Joint Funding Agreements Joint funding enhances Partnerships financing flexibility Enbridge Inc. Joint Funding EEP Funded ENB Funded MPC Funded Eastern Access and US Mainline Expansions Eastern Access 1,225 Enbridge Inc. to fund…
2014 EBITDA Guidance (unconsolidated) Strengthening results supported by strong fundamentals & market access projects cash flows Strong supply & demand 250 outlook Full year 2013 projects 1,300 88 2014 projects in-service 1,000…
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