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UBS MLP One on One Conference – MPLX Lp

MPLX Lp · Jan 12, 2016 · 61 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. UBS MLP One on One Conference – MPLX Lp – slide 1
    UBS MLP One-on-One Conference January 12, 2016
  2. UBS MLP One on One Conference – MPLX Lp – slide 2
    Key Investment Highlights U.S. NGL volume growth creates a need for incremental infrastructure Completed transformative combination with MarkWest Energy Partners, L.P. creating large-cap, diversified, high-growth master limited…
  3. UBS MLP One on One Conference – MPLX Lp – slide 3
    U.S. Natural Gas Production Growth Largely from Shale 18 Actual Forecast U.S. natural gas supply 16 to grow by 3.3 MMBOED 14 (18 BCFD) by 2030 2015 EIA forecast lower 12 due to less LNG exports MMBOED Shale Gas 10 Lower…
  4. UBS MLP One on One Conference – MPLX Lp – slide 4
    U.S. NGL Volume Growth Creates a Need for Incremental Infrastructure 7 Supply growth will not be Actual Forecast derailed by lower prices 6 Rejected Ethane Total NGL production growth: 5 4.9% annually through 2020 4 Purity…
  5. UBS MLP One on One Conference – MPLX Lp – slide 5
    U.S. Natural Gas and NGL Trade Flows Changing 2000 2020 Paradigm shift from U.S. Northeast being a significant importer to a significant exporter Driven by Marcellus and Utica production growth Infrastructure continuing to…
  6. UBS MLP One on One Conference – MPLX Lp – slide 6
    Leveraging Strengths Across the Hydrocarbon Value Chain Crude Oil and Refined Products Natural Gas and NGLs Refining Gathering Logistics Processing Fuels Distribution Fractionation Large and growing The right assets, in the…
  7. UBS MLP One on One Conference – MPLX Lp – slide 7
    Shale Crudes Strengthen Octane Market U.S. summer octane values were strong Lighter crude runs produce more light naphtha, increasing demand for octane Shale crudes yield a lower quality reformer feed Octane generation capacity…
  8. UBS MLP One on One Conference – MPLX Lp – slide 8
    Strategic Relationship with Sponsor Marathon Petroleum Fortune 25 company Investment grade credit profile Fourth largest U.S. refiner Largest in Midwest 2014 Revenues and other income: 98.1 B 2014 Net income attributable to MPC:…
  9. UBS MLP One on One Conference – MPLX Lp – slide 9
    Growing More Stable Cash-Flow Business Segments Speedway Corporate 2016 Capital Budget 4.2 B & Other 3% MPC 2.5 B MPLX 9% Refining Sustaining Refining & Marketing, excluding Capital Midstream 1,145 MM 16% Midstream* 828 MM 41%…
  10. UBS MLP One on One Conference – MPLX Lp – slide 10
    Extraordinary Backlog of Organic Growth and Drop-down Investment Opportunities of 27 - 33 B to Support High Distribution Growth MPC Drop-down Capital (Assumes 8-10x EBITDA 13 - 16 B multiple) MPLX Organic Capital through 2018*…
  11. UBS MLP One on One Conference – MPLX Lp – slide 11
    Growing MPCs Drop-down Inventory Provides Visibility to Significant Growth MPC Drop-down Capital (Assumes 8-10x EBITDA multiple) 13 - 16 B 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 5,400 miles of additional pipelines…
  12. UBS MLP One on One Conference – MPLX Lp – slide 12
    MPC Investing in Significant Growth Projects North Dakota System (Sandpiper) Logistics equity investment MPC Length, size: 610 Mile, 24/30 + North Dakota Classic System and Bakken Pipeline U.S. Capacity: 580 MBD In-Service: 2017…
  13. UBS MLP One on One Conference – MPLX Lp – slide 13
    MPC Investing in Significant Growth Projects Southern Access Extension (SAX) Logistics equity investment MPC Length, size: 165 Mile, 24 Capacity: 300 MBD In-Service: Late 2015 MPC Investment: 330 MM Canadian MPC Equity: 35%…
  14. UBS MLP One on One Conference – MPLX Lp – slide 14
    Marine Business Overview Fully-Integrated Marine Transportation and Service Provider Marine Transportation Premier inland service provider with best-in-class assets 18 towboats and 201 tank barges moving light Annual EBITDA 120 MM…
  15. UBS MLP One on One Conference – MPLX Lp – slide 15
    Legacy MPLX has Attractive Organic Growth Backlog Estimated to Generate 125 MM of EBITDA MPLX Organic Capital through 2018(1) 0.8 B 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 Cornerstone and Utica Build-out Pipeline and Tank…
  16. UBS MLP One on One Conference – MPLX Lp – slide 16
    MarkWest is One of the Largest NGL and Natural Gas Midstream Service Providers Processing 75% of Total Rich-Gas Production from the Marcellus and Utica Interstate and Pipeline Quality Intrastate Gas Natural Gas to Transmission…
  17. UBS MLP One on One Conference – MPLX Lp – slide 17
    Growth Driven by Customer Satisfaction MarkWest has received the No.1 rating for total customer satisfaction in every EnergyPoint Research survey since its inception in 2006 18
  18. UBS MLP One on One Conference – MPLX Lp – slide 18
    MarkWests Best-in-Class Service Creates Significant Value for Producer Customers Consistent Approach Leads to Superior Execution Commercial Strategy Develop a deep understanding of our customers business Create unique solutions and…
  19. UBS MLP One on One Conference – MPLX Lp – slide 19
    The Marcellus/Utica Resource Play is the Leading U.S. Natural Gas Growth Play 65 28 Marcellus & Utica account for Marcellus & Utica Billion Cubic Feet per Day (BCF/D) 64 over 20% of total U.S. Gas Supply Rest of U.S. Billion…
  20. UBS MLP One on One Conference – MPLX Lp – slide 20
    MarkWest has the Premier Position in the Marcellus and Utica We operate 41 processing and fractionation facilities in the Marcellus and Utica shales and have 10 additional facilities currently under construction We currently…
  21. UBS MLP One on One Conference – MPLX Lp – slide 21
    Expanding Southwest Position to Support Growing Production in High Performance Resource Plays Cana-Woodford Permian Expanding into the Cana-Woodford to Executed definitive agreements with support Newfield Explorations Cimarex and…
  22. UBS MLP One on One Conference – MPLX Lp – slide 22
    MarkWest has Robust Portfolio of Growth Projects Expected to Deliver 1 B of EBITDA Southwest Northeast MarkWest Organic Capital 2016 to 2020 (1.5 B annual run-rate) 7.5 B 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 Organic…
  23. UBS MLP One on One Conference – MPLX Lp – slide 23
    Leveraging Premier Positions Across the Value Chain with Substantial Incremental Combined Opportunities MarkWest/MPLX/MPC Synergistic Capital 6-9B 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 Opportunity Investment 1…
  24. UBS MLP One on One Conference – MPLX Lp – slide 24
    Butane to Alkylate (BTA) Developing Mt. Belvieu Capabilities in the Northeast: 1.5 - 2 B of Opportunity Alkylate is an ideal gasoline blending Enhancing the gasoline component that will become increasingly blendstock value chain…
  25. UBS MLP One on One Conference – MPLX Lp – slide 25
    Northeast and Long-Haul NGL Pipeline and Related Infrastructure Development with 1 1.5 B in Opportunities NGL/Light Products EAST COAST 1 to East Coast BLENDING - Large-scale East Coast LPG export 1 TERMINALS terminal MarkWest -…
  26. UBS MLP One on One Conference – MPLX Lp – slide 26
    Develop Infrastructure to Support the Emerging Rogersville Shale and Other Unconventional Northeast Reservoirs with up to 1 B of Opportunity Highly prospective play in West Virginia and Kentucky West Virginia Siloam MarkWest…
  27. UBS MLP One on One Conference – MPLX Lp – slide 27
    Expanding Dry Gas Gathering in Ohio, Pa., and W.Va. with 500 MM - 1.0 B of Opportunity The Utica Shale is potentially the most economically viable dry gas play in the U.S. Existing Ohio gathering system is critical for development…
  28. UBS MLP One on One Conference – MPLX Lp – slide 28
    Overall Midstream Growth Investments of over 9 B Contributing Approximately 1.3 B EBITDA(1) MarkWest Growth Investments - Cash Flow Return Profile 24 to 36 months 7.5 B of forecasted 1 B of Mid-2022 7.0x Cash Flow growth capital…
  29. UBS MLP One on One Conference – MPLX Lp – slide 29
    Consistent History of Peer-Leading Distribution Growth at MPLX to Continue 0.50 24% CAGR Since IPO 0.45 0.40 /Unit 0.35 0.4700 0.4400 0.4100 0.30 0.3825 0.3575 0.3425 0.3275 0.3125 0.25 0.2850 0.2975 0.2625*…
  30. UBS MLP One on One Conference – MPLX Lp – slide 30
    Strong Sponsor has Many Options to Support Distribution Growth MPC is a Fortune 25 Company with 30 B market cap that has a large, investment grade balance sheet and significant liquidity/free cash flow Incubate growth projects at the…
  31. UBS MLP One on One Conference – MPLX Lp – slide 31
    MPLX has Strong Financial Flexibility to Manage and Grow Asset Base Committed to maintaining investment grade credit profile and financial flexibility Expected pro forma debt of 5,474 MM(1) at close Anticipated leverage of 4.3x(2) at…
  32. UBS MLP One on One Conference – MPLX Lp – slide 32
    Appendix 33
  33. UBS MLP One on One Conference – MPLX Lp – slide 33
    MPCs Fully Integrated Downstream System Refining and Marketing Seven-plant refining system with 1.8 MMBPCD capacity One biodiesel facility and interest in three ethanol facilities One of the largest wholesale suppliers in our market…
  34. UBS MLP One on One Conference – MPLX Lp – slide 34
    MPLX Downstream Assets are Integral to MPC 35
  35. UBS MLP One on One Conference – MPLX Lp – slide 35
    Other Major MPLX Downstream Assets Pipeline Tank Farm Storage Assets Both crude oil and products located in Patoka, Wood River and Martinsville, Ill., and Lebanon, Ind. Approximately 3.3 MM barrels of available capacity Wood…
  36. UBS MLP One on One Conference – MPLX Lp – slide 36
    MPC/MPLX Executing a Comprehensive Utica Strategy Links Marcellus and Utica condensate and natural gasoline with Midwest refiners Leverages existing MPC/MPLX pipelines and right of way Need map components Allows diluent broken up…
  37. UBS MLP One on One Conference – MPLX Lp – slide 37
    MPC/MPLX Executing a Comprehensive Utica Strategy Phased infrastructure investment Canton crude truck unload Antrim Shale Utica crude trucking fleet Wellsville truck to barge project Utica Shale Utica barge expansion Marcellus…
  38. UBS MLP One on One Conference – MPLX Lp – slide 38
    MPLX Developing a Comprehensive Utica System Cornerstone Pipeline and Additional Opportunities Industry solution, 16-inch pipeline connecting Utica Shale region to East Sparta, Ohio, tank farm Late 2016 completion East and West…
  39. UBS MLP One on One Conference – MPLX Lp – slide 39
    MarkWest Utica Operations(1) Gathering Capacity 1.0 BCF/D Hopedale Complex Processing Capacity 1.3 BCF/D Cadiz Complex 0.5 BCF/D Seneca Complex 0.8 BCF/D Fractionation Capacity(2) 160 MBD Cadiz Complex 40 MBD Hopedale…
  40. UBS MLP One on One Conference – MPLX Lp – slide 40
    MarkWest Marcellus Operations Gathering Capacity 1.0 BCF/D Houston Complex Houston System 0.8 BCF/D Keystone System 0.2 BCF/D Processing Capacity 4.0 BCF/D Keystone Complex 0.4 BCF/D Houston Complex 0.6 BCF/D Majorsville Complex 1.1…
  41. UBS MLP One on One Conference – MPLX Lp – slide 41
    MarkWest Northeast Operations Gas Processing Siloam Complex 620 MMCF/D Capacity Boldman Complex 70 MMCF/D Cobb Complex 65 MMCF/D Kenova Complex 160 MMCF/D Langley Complex 325 MMCF/D Fractionation Capacity 24 MBBL/D Siloam Complex…
  42. UBS MLP One on One Conference – MPLX Lp – slide 42
    MarkWest Southwest Operations Gathering Capacity 2.1 BCF/D Carthage Complex East Texas East Texas System 0.6 BCF/D Western Oklahoma System 0.8 BCF/D Southeast Oklahoma System 0.6 BCF/D Eagle Ford & Other Systems 0.1 BCF/D…
  43. UBS MLP One on One Conference – MPLX Lp – slide 43
    MPCs Priorities for Continued Value Creation Strategic Objective How We Get There Maintain top tier safety and Continued focus on safety and environmental environmental performance stewardship license to operate Return free cash…
  44. UBS MLP One on One Conference – MPLX Lp – slide 44
    MPC Key Valuation Considerations Value of integrated management for MPC and MPLX Disciplined, balanced approach to capital allocation and capital return Growth potential for midstream assets and MPLX Premier refining system balanced…
  45. UBS MLP One on One Conference – MPLX Lp – slide 45
    MPC Returning Capital to Shareholders Consistently Growing Base Dividend 0.35 +28% 350 0.32 0.30 300 +19% 0.25 0.25 250 +20% 0.21 0.20 +40% 200 /Share MM 0.175 171 171 0.15 +25% 141 138 136 136 150 129 126 123…
  46. UBS MLP One on One Conference – MPLX Lp – slide 46
    MPC Returning Capital to Shareholders Continuing share repurchases Cumulative Share Repurchases 8,000 Since July 2011 6,000 10 B share repurchases authorized 7.05 B returned MM 4,000 to shareholders through repurchases…
  47. UBS MLP One on One Conference – MPLX Lp – slide 47
    MPC Peer Leading Return on Capital 20% Return on Capital Employed 16% Execution on highest 15% return projects 15% 15% 13% Disciplined approach 11% to capital spend 10% 10% Peer leading asset efficiency and utilization 5%…
  48. UBS MLP One on One Conference – MPLX Lp – slide 48
    MPC Creating a More Diversified Portfolio 2020E EBITDA Midstream R&M 2015E EBITDA(1) Midstream Speedway Speedway R&M Source: MPC estimates (1) Includes one month of MarkWest EBITDA 49
  49. UBS MLP One on One Conference – MPLX Lp – slide 49
    Reaching Higher-Value Markets Increasing Finished Product Export Capacity 600 Export Capacity 510 500 115 395 400 345 30 320 20 MBD 300 200 100 0 2013 2014 2015E 2018E Base Garyville Galveston Bay 50
  50. UBS MLP One on One Conference – MPLX Lp – slide 50
    South Texas Asset Repositioning (STAR) Program Creating a World-Class Refining Complex 2.0 B of total investment Increase residual oil (resid) processing Expand resid hydrocracker Improve gas oil recovery Revamp crude unit…
  51. UBS MLP One on One Conference – MPLX Lp – slide 51
    Investments Growing EBITDA Investments of 2.9 B contributing approximately 1 B EBITDA Growth Investment Incremental EBITDA 1,000 1,200 1,000 800 800 600 MM MM 600 400 400 200 200 0 0 Prior to 2016E 2017E 2018E…
  52. UBS MLP One on One Conference – MPLX Lp – slide 52
    Speedway Growing Stable Cash Flow Top tier performer in convenience store industry Accelerating organic growth strategy Convenience stores Commercial fueling locations Pursuing high quality acquisition growth Realizing benefits…
  53. UBS MLP One on One Conference – MPLX Lp – slide 53
    Pursuing Attractive and Accretive Acquisitions Primary objectives Leverage MPCs supply and logistical network Increase assured sales Optimize terminal utilization Fill market voids in Speedway footprint High quality assets…
  54. UBS MLP One on One Conference – MPLX Lp – slide 54
    Following Through on Goals for Acquired Locations Invest 570 MM in conversions, remodels and maintenance Convert 1,245 stores to Speedway brand and technology platforms Remodel approximately 700 locations to drive marketing…
  55. UBS MLP One on One Conference – MPLX Lp – slide 55
    Speedway Summary Driving EBITDA Growth Top tier performer in convenience store industry 1 in EBITDA/store/month vs. public peers Accelerating growth through organic projects Filling in existing markets Commercial fueling lane…
  56. UBS MLP One on One Conference – MPLX Lp – slide 56
    MPC Consistently Delivering Strong Results (MM, except where Thru noted) 2011 2012 2013 2014 3Q 2015* Earnings** 2,389 3,389 2,112 2,524 2,665 Cash from Operations 3,309 4,492 3,405 3,110 3,253 ROCE 19% 25% 15% 16% 20% Capital…
  57. UBS MLP One on One Conference – MPLX Lp – slide 57
    Investments Drive Significant EBITDA Growth Growth Investments Incremental EBITDA 3,500 3,500 3,000 3,000 2,500 2,500 2,000 2,000 MM MM 1,500 1,500 1,000 1,000 500 500 0 0 2016E 2017E 2018E 2019E 2020E 2016E…
  58. UBS MLP One on One Conference – MPLX Lp – slide 58
    Opportunity Set for Investment is Expanded Multiple Funding Options - Extensive Financial Flexibility MPC Sponsor Support for MPLX Capital Sources Capital Sources Earnings Equity Earnings MLP Distribution Incubate Projects Equity…
  59. UBS MLP One on One Conference – MPLX Lp – slide 59
    Disciplined Approach to Capital Allocation Prioritization and discipline around capital spending opportunities across the enterprise Investments must achieve or exceed risk-adjusted hurdle rates Target Business Hurdle Rate…
  60. UBS MLP One on One Conference – MPLX Lp – slide 60
    Reconciliations Speedway Segment EBITDA to Segment Income from Operations (MM) 2011 2012 2013 2014 2015E Speedway Segment Income from Operations 271 310 375 544 686 Plus: Depreciations and Amortization 110 114 112 152 254 Speedway…
  61. UBS MLP One on One Conference – MPLX Lp – slide 61
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