ENTERPRISE PRODUCTS PARTNERS L.P. ANALYST CONFERENCE March 8, 2017 ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
MEETING AGENDA 1. Randa Duncan / Jim Teague Welcome and Opening Remarks 2. Tony Chovanec Supply / Demand Fundamentals 3. Graham Bacon Engineering, Managing Costs, Safety and Environmental 4. Brent Secrest Liquids Marketing 5.…
WELCOME AND OPENING REMARKS Jim Teague Chief Executive Officer ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
CURRENT MACRO ENERGY OUTLOOK SupplySide Entering 3rd year of low commodity prices Is recent OPEC agreement an inflection point to support 50+ crude How fast will global GDPs grow Will U.S. production grow faster than global demand…
CURRENT MACRO ENERGY OUTLOOK DemandSide Dominates This Part of the Cycle Demandside pull U.S. petchems consumed a record 1.6 MMBPD of NGLs in 2016 Significant increase in demand for U.S. NGLs from new petchem facilities 20172020…
HOW WE THINK ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
EPD: NATURAL GAS, NGLS, CRUDE OIL, PETROCHEMICALS AND REFINED PRODUCTS Asset Overview Connectivity Pipelines: 49,300 miles of natural gas, NGL, crude oil, petrochemicals and Fully integrated midstream energy company refined…
PERMIAN BASIN NATURAL GAS GATHERING LOW BARRIER TO ENTRY Sources: EPD Fundamentals and Drilling Info ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 6
PERMIAN BASIN CRUDE OIL GATHERING LOW BARRIER TO ENTRY Sources: EPD Fundamentals and Drilling Info ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 7
EPD CRUDE AND CONDENSATE ASSETS O K L A H O M A Terminal Eagle Ford Terminal (JV) Cushing Seaway (JV) Strategically linked Red River Gathering terminals are critical West Texas Gathering for supply aggregation, Basin (JV)…
ENTERPRISE NATURAL GAS PIPELINE NETWORK: MARKET RICH SYSTEMS 12,000 miles of pipelines in Texas and Louisiana; gas processing, treating and compression tailored to customer needs 400+ interconnects (30 Bcf of…
NGLs: ALL ROADS LEAD TO MONT BELVIEU AND BEYOND Source: EPD Fundamentals ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 10
NGLs TO PETROCHEMICALS EXTENDING THE VALUE CHAIN MTBV Complex PDH iBDH ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 11
PETROCHEMICALS NOT NEW TO ENTERPRISE FIRST PROPYLENE ASSET Completed in 1979 Built backed by contract from Mobil Oil Tallest structure north of I10 in Houston when constructed; towers stand in excess of 300 feet tall Red…
ROOM TO GROW In 2011 Enterprise purchased 1,729 acres for expansion of plants and brine capacity. PDH, iBDH and Frac IX are being built on this acreage. Frac IX iBDH PDH ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS…
PREPARING TO EXPORT VIRTUALLY EVERYTHING WE TOUCH Source: EIA MBPD U.S. Exports LPGs MBPD U.S. Exports Refined Products 1,400 4,000 1,200 3,000 2,000 1,000 1,000 800 600 (1,000) 400 (2,000) 200 (3,000) Jan00…
FUNDAMENTALS OVERVIEW Tony Chovanec Senior Vice President ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
IS IT ABOUT MONEY OR MARKET SHARE Arab Gulf cash flows assuming reducing production by 1 MMBbls/d increase prices by 5 and 10/Barrel; Saudi Arabia, Kuwait and UAE currently produce 17 MMBPD The economics are even more compelling for…
GLOBAL BALANCES: MOST ANALYSTS EXPECT MARKET TO BALANCE BY 2H 2017 Demand / Supply Balance until 2Q17 OECD Total Oil Stocks Supply/Demand (MMBPD) Stock Change (MMBPD) Oil demand growth remains robust, especially in emerging…
OIL PRICES ARE FLATAND DISCOUNTED /Bbl WTI Real and Nominal Prices 2017 2018 2019 60 Forward Market 03/01/17 55 55 55 Consultant 1 02/28/17 60 67 Consultant 2 10/07/16 54 62 80 56 Bank 1 12/08/16 59 63 66 Bank 2 12/12/16 50 66 80…
HISTORY OF CRUDE OIL FORWARDS: FLAT CURVES ARE UNCOMMON (UNSTABLE) 120 Jul 2013 100 Flat 80 Oct 2014 June 2015 60 Flat Feb 2017 March 2015 40 Dec 2015 Feb 2016 20 May12 Dec15 Jul13 Oct14…
ALL MAJOR U.S. CRUDE OIL BASINS HAVE SOLID RETURNS IN CORE ACREAGE 100% 80% Rate of Return 60% 40% 20% 0% DJ Niobrara HZ Midland Basin HZ Eagle Ford Oil Delaware Basin HZ Eagle Ford Cond Bakken Assumes 55/Bbl…
ALL MAJOR U.S. NATURAL GAS BASINS HAVE SOLID RETURNS IN CORE ACREAGE 100% Rich Lean 80% Rate of Return 60% 40% 20% 0% Rich Scoop Rich Marcellus Pinedale Rich Utica Lean Haynesville Lean Utica Fayetteville Stack…
U.S. OIL & CONDENSATE SUPPLY POTENTIAL ASSUMING SUFFICIENT MARKETS (MBPD) AK & CA 1,000 750 1,012 926 500 901 250 0 Current 2020 2022 2,200 ROCKIES 2,000 1,800 1,957 2,053 1,600 1,714 200 APPALACHIAN 1,400 150 Current 2020…
U.S. NGL SUPPLY POTENTIAL ASSUMING SUFFICIENT MARKETS (MBPD) AK & CA 150 100 130 124 122 50 0 current 2020 2022 Current ROCKIES 1,000 983 941 800 APPALACHIAN 824 600 1,000 1,263 1,095 current 2020 2022 500 794 Total…
U.S. NATURAL GAS SUPPLY POTENTIAL ASSUMING SUFFICIENT MARKETS (BCF/D) 4 AK & CA 2 1 1 1 0 16 ROCKIES Current 2020 2022 12 13 13 13 8 4 0 APPALACHIAN Current 2020 2022 30 29 31 20 22 10 MIDCONTINENT 0 12 Current 2020…
IS 55/BBL THE NEW 85/BBL U.S. Oil and Condensate Forecast MBPD EPD Forecasts 2014 vs. 2017 14,000 12,000 3 year lag 10,000 8,000 6,000 3 year lag 4,000 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023…
PERMIAN BASIN CRUDE OIL TAKEAWAY EXPECTED TO TIGHTEN Permian Crude Oil Balances (Using Capacities at 100% Load Factor) 4,500 4,000 Other Expansions 3,500 PE2 3,000 Midland to Sealy Cactus Expansion 2,500 MBPD…
TO MATCH REFINERS PREFERRED FEED SLATE: LIGHT OIL EXPORTED & HEAVY / MEDIUM IMPORTED We expect EPD assets to handle exports, imports, batching and blending of various crude oil grades and qualities MMBPD Potential Exports: 22…
PROPANE DAYS OF SUPPLY: THE U.S. IS NOW STORING LPGs FOR THE GLOBAL MARKET Inventories increasing but because of increased exports days of supply are unchanged 140 120 Propane Stocks 120 Days of Supply (Domestic & Exports) 100…
LPG DOCK SPACE EXPECTED TO TIGHTEN MBPD 3,500 Export Capacity at LPG Supply 3,000 85% Operating Rate 2,500 2,000 1,500 1,000 500 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 LPG Domestic Demand…
THE CHEMICALS INDUSTRY IS MAKING LARGE INVESTMENTS BASED ON U.S. ETHANE American Chemistry Council (ACC) analysis shows 164 billion in capital spending could lead to 105 billion per year in new chemical output Global petrochemical…
NEW U.S. CRACKERS BUILT TO CRACK ETHANE; OTHER FEEDSTOCKS LITTLE CHANGED MBPD U.S. Ethylene Feedstocks: 20102020 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Ethane Propane Butane Naphtha 2010 2015 2020 Assumes 90%…
CRACKING ETHANE HAS A HIDDEN COST (OPPORTUNITY): FEW HEAVIER OLEFINS Production Ethylene Propylene Butylene Butadiene Other Ethane 78% 0% 1% 2% 19% Propane 42% 17% 1% 3% 37% Feedstock Butane 40% 17% 7% 3% 33% Naphtha 31% 16%…
GLOBAL PROPYLENE DEMAND EXPECTED TO GROW AT 1.2x GLOBAL GDP Propylene Demand World GDP (Billion, (kmt) constant 2010 prices) 120,000 120,000 110,000 110,000 100,000 100,000 90,000 90,000 80,000 80,000 70,000…
U.S. GULF COAST ETHANE BALANCES All Regions West of Appalachia Appalachia MBPD Supply Potential MBPD Supply Potential 800 2,400 120 600 278 1,800 120 (1) +50 234 (1) 120 400 Utopia Export 259 1,200 233 200 410 460 1,898 205…
NATURAL GAS: U.S. GULF COASTCENTRIC DEMAND & FORECASTED FLOW PATTERNS Canada +3 Bcf/d 2016 to 2022 Change in NG Flow Bakken +0.5 1 Bcf/d Canada RC & E.G. +1.5 +1.0 Demand Rockies Marcellus & Utica Other Western…
U.S. GAS TO CRUDE RATIO DRIVES GLOBAL COMPETITIVENESS U.S. Natural Gas is Very Competitive with European and Asian Markets 11.0 Brent Crude 9.0 7.0 UK LNG /MMBtu Asian LNG 5.0 U.S. Ethane 10.0 cpg 3.0 1.0 APR…
OPERATIONS AND ENGINEERING Graham Bacon Executive Vice President, Operations and Engineering ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
OPERATIONS AND ENGINEERING OVERVIEW Safety Cost Management Project Execution Regulatory Outlook ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 2
COST MANAGEMENT 7% year over year reduction in fixed operating costs How did we do it Our People Every Dollar Matters Supply Chain Management Technical capability Payoff in maintenance management investments What we did not…
MARKET UPDATE: EQUIPMENT AND LABOR ERW Pipe (1624) & Steel HRC Pricing Equipment lead times for 1,400 1,200 pumps, valves and 1,000 motors remained steady 800 /Ton 600 throughout 2016 and its 400 increasing slightly in…
MAJOR PROJECTS HIGHLIGHTS A successful year in 2016 4% under budget Morgans Point Ethane Export Facility South Eddy Gas Plant Delaware Basin Gas Plant Beaumont Terminal and West Dock Expansion BEF Revamp and Turnaround ALL…
MAJOR PROJECTS UPDATE 2017 Another Busy Year PDH Midland to Sealy Crude Pipeline Louisiana RGP Pipeline Orla Gas Plant and Pipelines In Construction iBDH Engineering / Permitting Frac IX ALL RIGHTS RESERVED. ENTERPRISE…
REGULATORY RISK UNCERTAINTY REPLACED BY PUBLIC ADVOCACY ISSUES Green House Gas Regulatory Action White House Strategy Change Rollback of BLM and EPA Methane Reduction Regulations Pipeline Safety Rule Update Hazardous Liquids…
NGL, CRUDE & REFINED PRODUCTS MARKETING Brent Secrest Senior Vice President ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
ENTERPRISE MARKETING Marketings role: Optimize Enterprises vertically integrated asset base to create value Optimize Minimize Assets Risk Gathering Processing Flat book policy Fractionation no price speculation Pipelines…
UTILIZING THE ASSETS Marketing Fees Paid to EPD Assets 2,500 2,000 in Millions 1,500 1,000 500 0 2012 2013 2014 2015 2016 ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 3
THE FIRST AND LAST MILE Trucks and barges are often the first and last steps in the value chain Annual Truck Volumes Annual Barge Utilization 60,000 120 100% 120 50,000 100 100 80% 40,000 80 80 Mbbls 60% 30,000 60 60…
MARKETING STRATEGIES Across all marketing groups, we focus on three main strategies: Product Upgrade Time Location ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 5
A DAY IN THE LIFE OF NGL MARKETING Does a market supply less desirable barrels Product Does a market demand Natural Gas Mixed NGLs Upgrade upgraded premium barrels What assets do we have to connect the markets Product…
PRODUCT UPGRADE Gas Processing (C2 Recovery) Fractionation Raw Purity Products Debutanizer Non Raw Finished Specialty Fungible Supply Purity Products Deisobutanizer Products (HPIC4) OffSpec Fungible Isomerization…
TIME 40,000 160 30,000 120 Mbbls cpg 20,000 80 10,000 40 0 0 Jan14 Jul14 Jan15 Jul15 Jan16 Jul16 Enterprise NGL Inventory Time Spread Volume Belvieu NON TET C3 Price Sources: MTBV NTET C3 Month Avg. OPIS Price…
LOCATION Market Flows of Propane Seasonal Movements Summer Propane Winter Propane Rockies Midwest Marcellus MidContinent Southeast Permian Mont Belvieu Gulf Coast Mexico South Texas Exports ALL RIGHTS…
LOCATION LPG Loadings: Historical and Committed vs. Capacity 1,150 Cargos Contracted from 20172020 16,000 14,000 12,000 10,000 Mbbls/Month 8,000 6,000 LPG Export Capacity: 14.0 MMbbls/Month 4,000 2,000 0 2010 2011…
ENTERPRISE LPG EXPORT DESTINATIONS EPD Loaded 49% of 2016 U.S. LPG Exports 50% Enterprise LPG Far East 155.4 MMbbls 76.4 MMbbls 14% Europe / Africa 23% 21.3 MMbbls North America 35.1 MMbbls Top LPG Exporters in 2013,…
ETHANE EXPORTS Shipbuilders Response Contracted 3rd Party Volumes* 35 Capacity (MBbls) New Ships 4,000 250 Contracted Option MP Operational Capacity 30 3,500 Average Annual (MBPD) 200 of New Vessels 3,000 25 2,500 150…
A DAY IN THE LIFE OF CRUDE MARKETING Midland WTS WTI Terminal Does a market supply less desirable barrels Product Does a market demand Upgrade upgraded premium barrels WTI What assets do we have to connect the markets…
PRODUCT UPGRADE Midland Cushing Blend West Texas Sour into Blend a basket of crudes to West Texas Intermediate create a higher value crude Blend Spreads Gulf Coast 12.00 10.00 Blend condensate into 8.00 South Texas Sweet…
TIME Utilize Storage in West Texas, MidCon and Gulf Coast 6,000 120 5,000 100 4,000 80 Mbbls /bbl 3,000 60 2,000 40 1,000 20 0 0 Jan14 Jul14 Jan15 Jul15 Jan16 Jul16 Time Trade Volume Time Spread Volume Price of…
LOCATION Market Flows MidContinent Hub Location Spreads 1.00 0.00 (1.00) (2.00) (3.00) (4.00) Aug16 Apr17 Dec17 Aug18 WTX vs. MC MC vs. GC WTX vs. GC West Texas Gulf Coast Eagle Ford Sources: Argus and Link…
LOCATION How Crude Marketing Participates O K L A H O M A Terminal Eagle Ford Terminal (JV) Cushing Seaway (JV) Red River Gathering West Texas Gathering Basin (JV) Midland to Sealy (Under Construction) NEW Eagle Ford Pipeline…
A DAY IN THE LIFE OF REFINED PRODUCTS MARKETING Butanes Does a market supply less Refinery Natural Gasoline desirable barrels Product Does a market demand Upgrade upgraded premium barrels Alkylate What assets do we have to…
PRODUCT UPGRADE Blend gasoline in tank on the Gulf Coast Natural Gasoline Butanes Alkylate Motor Gasoline Raffinate Reformate Naphtha ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 22
LOCATION How Refined Products Marketing Participates Connectivity allows us to bridge dislocated markets ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 24
EPD CRUDE OIL, REFINED PRODUCTS, NATURAL GAS LIQUIDS AND NATURAL GAS ASSETS Bill Ordemann Executive Vice President, Commercial ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
THE LEADERSHIP TEAM Laurie Argo Senior Vice President, Crude Oil, Refined Products and Unregulated NGL Assets Brad Motal Senior Vice President, Natural Gas Assets Craig Murray Senior Vice President, Regulated Business and…
EPD CRUDE OIL ASSETS ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
CRUDE OIL SYSTEM Aggregation, Pipelines, Terminals and Docks O K L A H O M A Terminal Eagle Ford Terminal (JV) Cushing Seaway (JV) Strategically linked Red River Gathering terminals are critical West Texas Gathering for supply…
DELAWARE BASIN EXPANSION Strategic Supply Aggregation Terminal Red Hills Midland Loving County ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 5
MIDLAND CRUDE OIL TERMINAL Growing to 4 MM Barrels with Connectivity Centurion Cushing Wichita Falls Colorado City MESA Mesa Plains / Basin Centurion Sunoco SunVit PE II LONGHORN CACTUS Garden City EPD Crane…
MIDLAND TO SEALY CRUDE OIL P/L SEGMENT From Permian Supply Hub to Multiple Markets O K L A H O M A 400mile, 24 pipeline from Midland Cushing to Sealy segment connects to Sealy storage facility NEW MEXICO Sealy connected to…
CRUDE OIL DISTRIBUTION SYSTEM Connectivity to 4 MMBbls Refining Capacity Moore Road Cushing 36/24/24 EHSC 45 draft Galena Park 24 30/30/24 Sealy XOM Baytown 24 VLO H.R. PRSI Shell Beaumont Katy 24 24 SDP Junction 30…
EPD REFINED PRODUCT ASSETS ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
UNREGULATED REFINED PRODUCTS Southern Complex Connectivity ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 10
EPD MARINE TERMINALS AND DOCKS ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
U.S. GULF COAST MARINE TERMINALS Significant Export Capabilities and Experience ENTERPRISE EXPORT SERVICES Over 35 years of experience Extensive supply aggregation capabilities Access to diverse supply Multiple terminals and docks…
HOUSTON SHIP CHANNEL TERMINAL Best in Class EHSC Crude & Products EHSC Connectivity Storage Connectivity Over 24 MMBbls of storage EPD ECHO KMCC Room to grow by more than 4 MMBbls Terminal Zydeco HOHO on 58 acre Port of Houston…
HOUSTON SHIP CHANNEL TERMINAL Continuing Growth Four 390 MBbl crude tanks currently under construction (inservice 1Q 2018) Room for additional expansion of up to 3.1 MMbbls of storage Completed Marketlink connection (40 MBPH)…
HOUSTON SHIP CHANNEL TERMINAL Premier LPG Export Facility in the U.S. Docks 8 & 9 Docks 6 & 7 PreExpansion Docks 4 & 5 14,000 bph Jr. Expansion Dock 1 2,500 bph Online March 2015 Sr. Expansion 11,000 bph Room to Grow…
MORGANS POINT ETHANE EXPORT TERMINAL The Worlds Largestand Room to Grow Dock 8 Dock 7 Train 1 Train 2 Combined operating loading rate of 200 MBPD across two docks 18 miles of 24 P/L MTBV to Morgans Point Operational…
BEAUMONT TERMINALS Beaumont (BEA), West (BMW) and East (BME) BMW / BEA BME Docks 12.4 MMBbls of Crude, Refined Products, C5, Condensate, MeOH, MTBE, Blendstocks Refined Products, Refinery 1 Ship Dock, 1 Barge Dock Feedstocks, and…
BEAUMONT TERMINALS Continuing Growth Refined Products 30 ULSD & 20 gasoline export pipeline connections BMW BME Expanded BEA dock connectivity through integration with BMW marine facilities 20 Interterminal transfer pipeline…
MONT BELVIEU COMPLEX Main Plant Area iBDH PDH Frac IX Fracs IVVIII BEF Splitter I Fracs IIIII Isoms / DIBs ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 22
MONT BELVIEU COMPLEX Room to Continue to Grow Enterprise purchased 1,729 acres in 2011 for expansion of process plants and brine capacity ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 23
DEMONSTRATED GROSS NGL FRACTIONATION CAPACITY Frac IX on the Horizon 1400 IX 1200 1000 Frac Capacity (MBPD) 800 600 400 200 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 LA S. TX Hobbs MTBV ALL RIGHTS…
MONT BELVIEU STORAGE COMPLEX Three Linked Locations for Reliability North Storage Expansion Area 10 Wells 30 MMBbls Main Complex East Storage 17 Wells 83 MMBbls West Storage 10 Wells 17 MMBbls Rings of Reliability…
MONT BELVIEU STORAGE COMPLEX 130 MMBbls and Growing Brine: Additional 10 MMBbls of brine capacity scheduled in service in 2017 (30 MMBbls total pit capacity) Growing Existing Wells: Four wells under development for an…
NATURAL GAS ASSETS ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
ENTERPRISE NATURAL GAS PIPELINE NETWORK: MARKET RICH SYSTEMS 12,000+ miles of pipelines, gas processing, treating and compression in New Mexico, Texas and Louisiana tailored to meet our customer needs 400+ interconnects…
LOUISIANA NATURAL GAS PIPELINE NETWORK Growth in Supply and Markets 1,700 miles of pipelines connecting our customers to market demand 100 connected endusers with daily requirements 3.4 Bcf/d Capacity into our Mississippi…
TEXAS AND NEW MEXICO NATURAL GAS PIPELINE NETWORK Positioned to Capitalize on Market Growth 10,000 miles of pipelines Gas processing, treating and compression Supply Diversity: 340 market & pipeline connections Permian 16…
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