March 2014 Analyst Conference – Enterprise Products Partners LP

Enterprise Products Partners LP · Mar 18, 2014 · 175 slides

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Enterprise Products Partners L.P. Analyst Conference Houston, Texas March 18, 2014 All rights reserved. Enterprise Products Partners L.P.
Meeting Agenda 1. Michael Creel Welcome and Opening Remarks 2. Jim Teague EnterpriseMaking a Difference 3. Tony Chovanec Supply / Demand Fundamentals 4. Bill Ordemann Crude Oil and Offshore 5. Keith Masterson Natural Gas Assets and…
Welcome and Opening Remarks Mike Creel Chief Executive Officer All rights reserved. Enterprise Products Partners L.P.
Key Investment Considerations EPD is one of the largest U.S. publicly traded energy partnerships with an enterprise value of nearly 80 billion 64th on Fortune 500 One of the largest integrated midstream energy systems Diversified…
Simple is Better EPCO & Public Affiliates 36.4% L.P. Non-economic GP 63.6% L.P. Interest Interest Enterprise Products Partners L.P. (NYSE: EPD) Note: as of February 28, 2014 All rights reserved. Enterprise Products…
Geographic and Business Diversification Provide Multiple Earnings Streams 4.8 Billion Gross Operating Margin 4 Year Growth Capital Allocation 20132016E(1) For 12 months ended December 31, 2013 10.1 Billion 16% 19% 13% 52% 57%…
2013: Another Record Year Successful Execution in Construction of Capital Projects Since 2009, completed 70 major capital projects totaling 10 billion of gross investment approximately 3% under budget 4% 2% 2.6% 0% % Over /…
2013: Another Record Year Solid Operating Performance(1) 16 Natural Gas Pipeline Volumes Liquids Pipeline Volumes 5.0 5.0 14.3 14.5 14 13.6 12.7 4.5 11.9 4.3 12 4.2 Million BPD TBtu/d Offshore 4.0 4.0 4.0 10 Onshore…
2013: Another Record Year Led to Strong Financial Results Gross Operating Margin 4.5 Distributable Cash Flow (DCF) 5.0 4.8 4.1 3.8 3.8 4.5 4.4 3.5 4.0 3.9 3.7 Billions Billions 3.5 3.3 2.5 2.3 3.0 2.8 3.0 2.9 1.6 2.2 1.5…
EPD and AMZ MLP Index Attractive Total Return vs. 9 Other Asset Classes 15-Year 10-Year 5-Year 3-Year 2006 2007 2008 2009 2010 2011 2012 2013 1 1 1 1 CAGR CAGR CAGR CAGR REIT Commodities IG Bonds MLP Index EPD EPD EPD EPD REIT Small…
2014: Another Year of Focus on Execution and Continued Growth Strong financial flexibility to fund growth capital investment in 2014 Prefunded 553 million of equity with November 2013 offering Began 2014 with 4.1 billion of liquidity…
EnterpriseMaking a Difference Jim Teague Chief Operating Officer All rights reserved. Enterprise Products Partners L.P.
Organization Announcements Chief Operating Officer Jim Teague Business Management Asset Optimization Operations Management NGL Frac & Unregulated P/Ls Business Management, Regulated Engineering Support Services Group SVP,…
Making A Difference ATEX Texas Express and Front Range Seaway Reversal and Looping ECHO / Crude Distribution Eagle Ford Aegis LPG PDH Exports Under Construction All rights reserved. Enterprise Products Partners…
Where are We GoingNo Surprises Diversification, Stability and Growth NGLs: continuing to expand our unparalleled footprint along the entire NGL value chain; continue as the U.S. leader in the rapidly expanding U.S. NGL business Crude:…
Where are We GoingNo Surprises Diversification, Stability and Growth Exports: export activities will span multiple commodities, with a leading position in each Propane: EPD to remain the largest export service provider in the U.S. and…
Export Capacity: Linking U.S. Supplies to Growing Global Demand Beaumont Beaumont Mont Sealy Belvieu Houston OTI Morgans Point ECHO Texas City Dock Terminal Pipeline Corridors Freeport / NGLs Jones Creek Refined…
Linking U.S. Supplies to Growing Global Demand Beaumont Freeport Texas City Morgan's Point All rights reserved. Enterprise Products Partners L.P. 7
Linking U.S. Supplies to Growing Global Demand Site of PGP Export Facility LPG Export Facility All rights reserved. Enterprise Products Partners L.P. 8
Mont Belvieu 1981 to Current A Tribute to Dan Now World Class Facility 8 Fractionators (700 MBbl/s) 100 MMBbls NGL Storage 6 Splitters with 95 MBbl/s (5.35 Billion lb. capacity) 3 Isomerization Units 9 Deisobutanizer Units Octane…
Supply / Demand Fundamentals Tony Chovanec Vice President All rights reserved. Enterprise Products Partners L.P.
Decades of DrillingDecades of Production POTENTIAL YEARS OF DRILLING Bakken 35 years 70k locations 7MM acres Utica 95 years 60k locations Mancos / Niobrara 13MM acres 45 years 80k locations Marcellus 110 years 10MM acres 160k…
U.S. Still in the Early Innings Stacked Pays & Technology Will Increase Supply limestone shale sandstone shale sandstone 1,000 shale limestone shale sandstone Source: U.S. National Park Service All rights reserved.…
Most Plays Have Potential for Multiple Stacked Horizontal Laterals 4 4 5 4 3 4 2 5 LEGEND EPD Gas 7 EPD Crude Oil EPD Liquids 2 3 9 Oil & Rich Gas Oil / Rich Gas / 4 Lean Gas Lean Gas 0 100 200 300 400 Source:…
Plentiful Supply of Natural Gas Available Below 5 Approaching 4 Potential Net Gas Additions 24 to 45 Bcf/d by 2025 1 to 4 6 Bcf/d Average Well Best 25% of Wells 5 2 to 4 0 to 1 5 to 8 Bcf/d 0 to 1 Bcf/d /MMBtu For 20% BFIT 2…
U.S. Natural Gas Supply Potential Assuming Sufficient Markets (Bcf/d) 1 OTHER ROCKIES 17 31 APPALACHIAN 18 MID-CONTINENT Base High PERMIAN Case Case Region Current 2020 2020 Potential Gulf Coast 26 31 39 7 Year 2020…
U.S. NGL Supply Potential Assuming Sufficient Markets (MBPD) 128 OTHER ROCKIES 923 1,181 APPALACHIAN 661 MID-CONTINENT PERMIAN NGL Components 4Q 2008 Current 2020 Potential 1,026 Ethane* 686 1,275 2,509 Year 2020 Propane…
New Crudes and Changing Flows EPDs Assets Are At The Center Of It All Bakken Light Canada Heavy 1.5 3 0.9 1.5 2013 2020 2013 2020 Light Imports Eagle Ford & Permian Light 0.8 0.1 5 2013 2020 2.6 ECHO 2013 2020 Heavy…
Value of NGLs Little Changed from 2013 Rich Gas Value per Mcf of Gas Forward 12 Month Strip (Mar 13 Value: 6.26) 7.0 6.49/Mcf 6.5 5% Ethane 0.29 6.0 Nat. Gasoline 0.44 (Mar 13 Value: 4.83) 5.5 5.19/Mcf Iso Butane 0.51 (Mar 13…
Industry is No Stranger to Low Ethane Margins Gross Processing Margins C2+ vs. C3+ 120 C2+ Margins C2+ Margins C3+ Margins C3+ Margins High C2 Margins 100 High C2 Margins 80 Cents per Gallon 60 40 Low C2 20…
U.S. EthaneGlobally Significant, Globally Superior 70 Mar-2013 Current Cash Cost (U.S. cents per pound) 60 50 U.S. Ethane Cost Advantage 40 30 20 10 0 U.S. U.S. U.S. W. Europe Far East Asia (Ethane) (Propane)…
Ethane Supply Potential / Demand Expected to Remain Chronically Oversupplied MBPD 3,000 450700 MBPD excess before rejection 2,500 2,000 200250 MBPD rejection in 2013 1,500 1,000 500 0 2012 2013 2014 2015 2016 2017…
LPGA Growing Surplus MBPD 1,250 MBPD Excess 3,000 2,500 2,000 1,500 1,000 500 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 LPG Demand Current LPG Exports Growing Surplus LPG Supply Source: EPD Fundamentals…
Global Shale Activity Structural Roadblocks to Development Remain Russia China Political risk. Large oil resource Disappointing gas activity thus in high-cost Siberia. far. Little activity in oil areas. Europe Canada NIMBY…
Liquid Hydrocarbons Demand Growth: Dominated by Emerging Markets MMBPD World Liquid Hydrocarbon Consumption by Region 40 Non-OECD Asia 35 30 25 USA & Canada 20 Africa & Middle East 15 Europe Latin America 10 OECD Asia…
The Importance of Exports Critical in Maintaining Gas, NGL and Crude Oil Production U.S. Propane Inventory: 2013 Export Scenarios MMBPD (excludes Propylene) 160 140 Without exports, inventory overhang would be devastating to rig…
Onshore Crude Oil and Offshore Bill Ordemann Group Senior Vice President All rights reserved. Enterprise Products Partners L.P.
Onshore Crude Oil Weve Only Just Begun All rights reserved. Enterprise Products Partners L.P.
Onshore Crude Oil Assets 1.5 MMBPD Expected by Year-End Pipeline Throughput Oklahoma Enterprise Terminal 1,600 Eagle Ford Terminal (JV) 1,338 Cushing 1,175 Seaway Pipeline (JV) 1,200 Seaway Loop Line (JV) Red River Gathering…
Seaway Crude Oil Pipeline Down the Home Stretch Cushing Seaway JV (ENB) reversed flow and expanded capacity to provide Gulf Oklahoma Coast access for Mid-Continent, Bakken Arkan and Canadian crude oil Jones Creek to ECHO Lateral: 65…
Seaway Tariff Filing Update Cost of Service Case FERC reversed the ALJs Initial Decision on 2/28/14 and remanded the case to the ALJ for re-issuance of a new Initial Decision based on the existing evidentiary record New Initial…
Eagle Ford / South Texas Crude Oil Substantial Growth Continues Mont Belvieu Pipeline Throughput Sealy 400 389 330 Katy ECHO 300 MBPD 200 173 100 71 82 Marshall 0 2010 2011 2012 2013 2014E Milton Source: 2014 estimate…
ECHO Terminal Today ECHO Storage Terminal links growing oil supplies from inland Mid-Continent, Canada, Gulf of Mexico, waterborne imports with Gulf Coast refineries representing 8 MMBPD demand Expansion increasing storage capacity to…
ECHO Terminal Mid2015 (Artists Rendition) Three tanks in service today Phase I expansion expected in service 2Q 2014 Seaway tanks expected in service 4Q 2014 Phase II expansion expected in service 2Q 2015 Phase 2 Highway 3…
ECHO Distribution System Access to 8 MMBPD Refining and Water From Cushing Galena Park 24 Katy VLO H.R. PRSI Shell Pasadena Bertron Rancho 24 36 18 Motiva VLO TOT XOM Genoa ECHO Baytown Rancho II XOM 30 30 Beaumont 18…
Permian Crude Oil System Positioned For Significant Growth Existing Assets 674 miles of crude oil gathering and pipeline transmission Hobbs 2.1 MMBbls storage, Lynch including 1.4 MMBbls at Midland Jal Midland Cline Shale Play…
Midland Terminal Today Throughput volumes: 335 MBPD 1.4 MMBbls storage capacity Connectivity to all major pipelines All rights reserved. Enterprise Products Partners L.P. 11
Midland Terminal Whats Possible Permian Basin oil volumes projected to reach 2.7 MMBPD by 2020 (1 MMBPD growth from today) All rights reserved. Enterprise Products Partners L.P. 12
Offshore The Rebound Continues All rights reserved. Enterprise Products Partners L.P.
Gulf of Mexico Crude Oil Production Poised for Growth Gulf of Mexico Oil Forecast 3,000 High Expected 2,500 2,000 MBPD 1,500 1,000 500 Forecast 1.0 to 1.4 MMBPD increase by year end 2020 0 2009 2010 2011 2012 2013…
The Deepwater The Driver of GOM Production Growth Enterprise can provide unified 48 deepwater rigs active compared to 44 pre-Macondo; solutions for oil, gas and NGLs 16 more are expected by year end 2015 Deepwater yields medium…
EPD Offshore Assets Well Positioned to Handle GOM Growth BHPs Shenzi producing 100 MBPD. Cum. 150 MMBO since online March 2009 BP running 2 rigs to fill EPD NGLs Atlantis 200 MBPD capacity EPD Natural Gas EPD Crude Oil All…
Lucius Crude Oil Export Pipeline Coming Soon Southeast Keathley Canyon Pipeline Company (EPD / Genesis JV) Design capacity of 115 MBPD New 18 pipeline and 900 ton equipment module on South Marsh Island 205 platform complete 46…
Poseidon SM 205 Platform Before and After July 2012 September 2013 All rights reserved. Enterprise Products Partners L.P. 18
Natural Gas Assets and Marketing Keith Masterson Senior Vice President All rights reserved. Enterprise Products Partners L.P.
Gulf Coast Natural Gas Market Overview Our Strategic Placement Shale gas continues its push to market Appalachian gas supply directed to Gulf Coast Industrial expansion within existing Texas / Louisiana corridors Liquefaction…
Natural Gas (NG) Marketing: An Asset Based Approach Lead with the Pipe Strategic Asset Placement Physical supply and customer service With 10% of the national population, Texas Producer Driven: supply growth and Louisiana combined…
Texas Natural Gas Pipeline Network Where Production Meets Market The Asset Base 8,556 miles of gathering and lean gas transmission pipelines Carthage 12.9 Bcf working storage Currently working Waha 340+ connected end-users 29…
South Texas Gas Processing Eagle Ford Position: Strength in Motion Residue Market Header The Asset Base Ten 3rd Party Pipelines 2.7 Bcf/d Deliverability 20102013 invested 4+ billion in Eagle Ford development projects Yoakum…
South Texas Gas Processing Legacy Plants: Established Footprint The Asset Base Excluding Yoakum, operate 8 South Texas Legacy processing plants Processing 1.4 Bcf/d Producing approximately 90 MBPD mixed NGLs Gathering network able…
South Texas Gas Processing Yoakum: First in Class Largest NGL Production Train-3 Facility in North Train-2 America Cryogenic Installed as (3) 350 MMcf/d Train-1 Units identical units Treating and March 2013: 3rd Train in…
Louisiana Natural Gas Pipeline Network Supply Header for the River Corridor Louisiana Intrastate Systems The Asset Base Natural Gas Volumes 2.5 1,621 miles of gathering and lean 2.0 2.1 2.1 2.1 gas transmission pipelines 1.5…
Gulf Coast Natural Gas Market Overview Charging Its Way to Consumption Enterprise 1.01.5 Supply Demand 8,556 miles of Texas / 0.51.0 Louisiana Gulf Coast 1.0 Bcf/d Pipeline 2.0 440 direct connected end-users 41 direct connected…
Unregulated NGLs Russ Kovin Senior Vice President All rights reserved. Enterprise Products Partners L.P.
EPD Western Assets A Franchise from Wellhead to Markets Franchise gathering and processing assets located in Green River Basin, Piceance Wyoming Basin and San Juan Basin Pioneer Plant Green River 3.0 Bcf/d cryogenic processing…
Carlsbad Production and Gathering Resurgence in the Delaware Basin Top drillers include OXY, P66, BOPCO, Anadarko and BHP Chaparral Indian Cryo Plant EPD is in advanced discussions to gather Basin Plant and process additional rich…
Recent Y-Grade Pipeline Additions All Roads Lead to Mont Belvieu Capacity Pipeline Name (MBPD) Eagle Ford 450 Texas Express 250 SkellyBelvieu Expansion 15 All Enterprise 715 Others 915 Total 1,630 All rights reserved.…
EPD Mont Belvieu NGL Fractionation Worlds Largest NGL Complex Fracs VII & VIII Currently 670 MBPD of Frac VI fractionation capacity Frac V 1.1 MMBPD fractionation Frac IV Companywide Expansion possibilities Our Mont Belvieu…
EPDs Mont Belvieu Storage Complex Largest NGL Storage Complex in the World 35 existing wells (over 110 MMBbls) North Storage Caverns storing over 20 different products Over 100 pipeline interconnects Pipeline connected to every major…
EPD Mont Belvieu Storage Rings of Reliability North Storage 10 Wells Frac 28 MMBbls Area East Storage West Storage 15 Wells 10 Wells 66 MMBbls 16 MMBbls Map Data 2012 Google All rights reserved. Enterprise Products…
EPD LPG Export Facility Premier LPG Export Facility in the U.S. 14,000 bph under current configurations, using two dedicated pipes (16 and 14) from Mont Belvieu (7.5 MMBbls/month) 2,500 bph planned expansion in 1Q 2015 (1.5…
LPG Expansion Capabilities Significant Expansions Expected in 2015 Existing: (14 kbph) 1Q15: (2.5 kbph) 4Q15: (11 kbph) LPG Docks: 1 4 5 6 7 All rights reserved. Enterprise Products Partners L.P. 9
NGL Marketing and Supply Al Martinez Senior Vice President All rights reserved. Enterprise Products Partners L.P.
NGL Marketing Services Providing Creative Solutions Producers EPD Assets Consumers All rights reserved. Enterprise Products Partners L.P. 2
NGL Marketing Provide Marketing solutions to a growing customer base Producers: flow assurance and market choices for producers in the U.S. and Canada EPD Assets: ensure EPD assets are more fully utilized Consumers: provide a growing…
Increasing Customer Services Supports Growth of Asset Base Fees Paid by NGL Marketing to EPD Assets 1,400 1,238 1,202 1,200 1,167 1,057 1,000 935 806 in Millions 800 664 608 600 474 400 367 200 - 2007 2008…
Propane Export Destinations U.S. Exported 112 MMBbls in 2013 Europe / North Africa 21 MMBbls Far East 19% of U.S. Exports 13 MMBbls 11% of U.S. Exports Americas 78 MMBbls Top Propane Exporters in 2013 120 70% of U.S. Exports…
Propane Export Destinations / Market Share: EPD Loaded 87 MMBbls in 2013 Europe / North Africa 130 MMBbls 11% EPD Far East 238 MMBbls Mexico, Caribbean 5% EPD & Central America 57 MMBbls 54% EPD South America 58 MMBbls…
Utilization of LPG Export Facility Capacity 1,958 Cargos Scheduled Through 2024 100% 80% Dock Capacity Booked 60% 40% Q1 2014 20% Q4 2012 0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 All rights…
NW Europe and Asia Offer New Markets for U.S. Ethane NW Europe Current Feedstock Mix 8% Ethane 22% Other 70% Naphtha 300 MBPD ethane demand generated by converting 1/4th of operating capacity to ethane feedstock Feedstock…
Petrochemicals and Refined Products R.B. Herrscher Senior Vice President All rights reserved. Enterprise Products Partners L.P.
Petrochemicals Propylene & C4 Olefins All rights reserved. Enterprise Products Partners L.P.
Petrochemical Integration Refinery Suppliers NGL Fractionation Petrochemicals C3 / C3= C2 PDH (RGP) Ethane Propane DeHydro On-purpose Propylene C3 / C3= C3 LE C3 Gas Propane Liquids Isomerization C3= Isobutane iC4…
By the Numbers 60 sources of RGP in 2013 Refinery Suppliers Pipeline, ship, barge, rail and truck Reliable take-away service C3 / C3= 4 RGP storage caverns (RGP) 2 in Mont Belvieu and 2 in Louisiana Supply reliability for…
PDH Update 1.65 billion pounds per year of PGP Consuming 35 MBPD of propane Mechanical completion expected 4Q 2015 and commercial operation expected in 1Q 2016 Equipment on-schedule and on-budget 100% of capacity is contracted…
Other Propylene Complex Expansions 8 EPD Owned Propylene Capacity Splitter IV: 2013 added 500 million pounds per year production capacity. After PDH, 6 Billion Lbs. the total EPD production capacity in Mont 4 Belvieu is expected to…
International Reach Our terminal located on the Houston Ship Channel is the only operating PGP Export Terminal in the United States Long-term commitment to export markets Contract extended to 2032, and through 2042 at EPD option…
Isobutylene: MTBE (Octane Enhancement) Extension of EPD Butane value chain ensures utilization and margins for our assets On-purpose Isobutylene MTBE Today All MTBE sales are for export, FOB U.S. Gulf Coast Margin is locked…
Isobutylene: Shrinking Supply + Growing DemandSound Familiar Extension of EPD Butane value chain ensures utilization and margins for our assets On-purpose Isobutylene Isobutylene Mix iC4 / iC4= Feedstock for Polyisobutylene EPD…
Isobutylene: Supplying the Demand EPD is advantaged with our existing On-purpose Isobutylene production. How do we produce more to grow the business Short Term: a significant reliability / expansion project for the existing Isobutane…
Refined Products All rights reserved. Enterprise Products Partners L.P.
Refined Products: Asset Overview 4,215 miles of pipe and 20 MMBbls of storage Southern Complex Southern Complex 9 pipelines with 5.8 MMBbls of storage Directly connected to 8 refineries and IAH airport Bi-directional between Houston…
The U.S. Has Shifted to a Net Exporter of Refined Products IEA expects U.S. demand for Refined Products to decline steadily: 0.60% annual decline for Mogas Demand 0.40% annual decline for Distillate Fuel Oil Demand 0.50% annual…
And the U.S. Gulf Coast is the Export Gateway MBPD Petroleum Products Net Exports The IMF forecasts Latin America to grow 3.54.0% 2,500 per year from 2013 to 2018 2,000 1,500 Latin American demand is increasing annually by 1,000…
EPD Beaumont Terminal Well Positioned ExxonMobil Capabilities Panamax Vessels: 300 MBbls; 750 x 108 x 40 EPD Beaumont Terminal Load rates up to 15,000 Bbls/hr EPD Beaumont 2.9 MMBbls storage; fungible and dedicated Tank Farm…
Petrochemicals and Refined Products The Propylene business is expanding from every point of view production, connectivity and storage, supported by significant capital investment to meet long term contracted demand The C4 Olefins…
Regulated Businesses Mike Smith Group Senior Vice President All rights reserved. Enterprise Products Partners L.P.
Regulated NGL / Refined Products Systems Over 19,000 miles of regulated NGL / Refined Products Pipelines Over 1,600 miles in service in past year Serving majority of U.S. onshore natural gas liquids plays and providing access to…
Shale Plays Source Rock 750,000 Well LocationsDecades of Drilling EPD Pipelines Gas Crude Oil Liquids (NGL & Products) Shale Plays Existing North American Production 0 250 500 Oil Miles Gas Sources: EPD Fundamentals; USGS…
Western Y-Grade Expansions Inbound All rights reserved. Enterprise Products Partners L.P. 4