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Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP

Enterprise Products Partners LP · Feb 28, 2017 · 50 slides

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Slides

  1. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 1
    ENTERPRISE PRODUCTS PARTNERS L.P. MORGAN STANLEY MLP / DIVERSIFIED NATURAL GAS CONFERENCE February 28, 2017 ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
  2. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 2
    KEY INVESTMENT CONSIDERATIONS One of the largest integrated midstream energy companies Integrated system enables EPD to reduce impact of cyclical commodity swings Large supply aggregator and access to domestic and international…
  3. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 3
    SIGNIFICANT INSIDER OWNERSHIP / DEEP BENCH Supportive GP with significant ownership EPCO and affiliates own 32% of LP units EPCO & Facilitated elimination of IDRs in a Affiliates nontaxable transaction through (EPCO 100% only)…
  4. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 4
    SUCCESSFUL EXECUTION THROUGHOUT CYCLES Increased Cash Distributions for 50 Consecutive Quarters MLP Equities: Higher Correlation to Crude for Last 30 Months EPD Has Delivered Consistent Results Throughout Cycles 400% 1,600 160 350%…
  5. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 5
    EPD: NATURAL GAS, NGLS, CRUDE OIL, PETROCHEMICALS AND REFINED PRODUCTS Asset Overview Connectivity Pipelines: 49,000 miles of natural gas, NGL, crude oil, petrochemicals and Fully integrated midstream energy company refined…
  6. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 6
    DIVERSIFIED SOURCES OF CASH FLOW BACKED BY FEEBASED BUSINESS MODEL 5.2 Billion Total Gross Operating Margin Natural Gas Gathering & Processing Diminishing for 12 months ended December 31, 2016 Contribution to Total Gross Operating…
  7. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 7
    SUPPLY / DEMAND FUNDAMENTALS ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
  8. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 8
    CURRENT MACRO ENERGY OUTLOOK SupplySide Entering 3rd year of low commodity prices Is recent OPEC agreement, an inflection point to support 50+ crude E&P still living within cash flow; selective in capital allocation Capital markets…
  9. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 9
    CURRENT MACRO ENERGY OUTLOOK DemandSide Demandside pull dominates this part of the cycle U.S. petrochemical industry consumed a record 1.6 MMBPD of NGLs in 2016 U.S. began exporting ethane by water in 2016 Record U.S. LPG exports…
  10. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 10
    LOW GAS TO CRUDE SPREAD CONTINUING TO DRIVE U.S. NGL ADVANTAGE Indicative U.S. Ethylene Cracker Profit Margin by Feedstock U.S. Ethylene Cracker Feedstocks 90 U.S. Ethylene Cracking Capacity 1,200 40% Growth Billion lb/year…
  11. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 11
    RIG COUNTS IN CRUDE OIL PLAYS 600 500 400 300 200 100 0 Jan12 Jul12 Jan13 Jul13 Jan14 Jul14 Jan15 Jul15 Jan16 Jul16 Jan17 Permian Eagle Ford DJ Basin Bakken…
  12. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 12
    THE SUPPLY TREADMILL: 1/3 OF GLOBAL OIL PRODUCTION MUST BE REPLACED BY 2020 Oil and Gas Industry Needs to Replace Declines and Satisfy Demand Growth MMBPD of Oil 2016 2017 2018 2019 2020 Declines of Existing Fields 5.0 5.0 5.0…
  13. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 13
    HISTORY OF CRUDE OIL FORWARDS: FLAT CURVES ARE UNCOMMON (UNSTABLE) 120 Jul 2013 100 Flat 80 Oct 2014 June 2015 60 Feb 2017 Flat March 2015 40 Dec 2015 Feb 2016 20 May12 Jul13 Oct14 Dec15…
  14. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 14
    GLOBAL BALANCES: MOST ANALYSTS EXPECT MARKET TO BALANCE BY 2H 2017 Oil demand growth remains robust, especially in emerging markets 2016 2017 2018 IEA OMR, Jan 2017 +1.6 MMBPD +1.4 MMBPD PIRA +1.9 MMBPD +1.7 MMBPD +1.6 MMBPD…
  15. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 15
    NATURAL GAS: U.S. GULF COASTCENTRIC DEMAND & FORECASTED FLOW PATTERNS Canada 2016 to 2022 Change in NG Flow +3 Bcf/d Bakken +0.5 1 Bcf/d Canada RC & E.G. +1.5 +1.0 Demand Rockies Marcellus & Utica Other Western…
  16. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 16
    U.S. GULF COAST LNG PROJECTS Natural Gas Loading Est Completion Company Owners Location Capacity (MMcf/d) Date Sabine Pass LNG Cheniere Energy 3,500 Sabine Pass, LA 20162019 Freeport LNG Freeport LNG 2,000 Freeport, TX 20182019…
  17. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 17
    IS 55 THE NEW 85 EPD Crude Oil Production Forecast (2014 vs. 2017) MBPD U.S. Oil and Condensate Forecast 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…
  18. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 18
    LPG DOCK SPACE WILL NOT BE IN EXCESS FOREVER MBPD 3,500 Export Capacity at LPG Supply 85% Utilization 3,000 2,500 2,000 1,500 1,000 500 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 LPG…
  19. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 19
    U.S. THE LARGEST EXPORTER OF LPG LPG Exports by Destination through December 2016 2016 EPD LPG Exports by Destination Region: 155.4 MMBbls % of Cargos Loaded EPD% of Destination Market North America / Caribbean 23% 58% Central & South…
  20. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 20
    LPG LOADINGS Committed Loadings vs. Capacity 1,150 Cargos Scheduled from 20152020 16 Average Commitments per Year Avg Monthly Loadings Per Year (As of Aug2015) Operational Capacity 14 12 10 MMBbls 8 6 MONT 4…
  21. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 21
    NGLs: U.S. GULF COAST IS SHORT NGLs; PRODUCERS NEED PRICE SIGNAL TO PRODUCE / TRANSPORT 20162020 (MBPD) OTHER ROCKIES 131 769 759 APPALACHIAN +100 MIDCONTINENT 426 PERMIAN 900 Total Demand Current Supply 1,111…
  22. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 22
    U.S. GULF COAST ETHANE BALANCES MBPD Appalachia All Regions West of MTBV Supply Potential MBPD 800 Supply Potential +50 2,000 261 120 (1) Utopia Export 400 (1) 217 1,500 120 383 233 178 0 1,000 1,624 Current 2020 500…
  23. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 23
    THE CHEMICALS INDUSTRY IS MAKING LARGE INVESTMENTS BASED ON U.S. SHALES American Chemistry Council (ACC) analysis shows 164 billion in capital spending could lead to 105 billion per year in new chemical output Much of new…
  24. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 24
    PROJECT UPDATES ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
  25. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 25
    VISIBILITY TO GROWTH: 6.7B OF MAJOR CAPITAL PROJECTS BY INSERVICE DATE PDH facility Butane recovery facility MidlandtoECHO pipeline Propylene pipeline expansion Crude oil infrastructure 3.0 NGL pipeline expansions 2.8 Permian…
  26. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 26
    ETHANE TAKEAWAY SOLUTIONS PROVIDES ACCESS TO GULF COAST MARKETS ATEX C2 Contracted Volumes ATEX Pipeline 150 120 Current capacity of 125 MBPD MBPD 90 Expandable to 265 MBPD; would require 60 131 104 116 81 30…
  27. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 27
    EXPANDING FOOTPRINT IN DELAWARE BASIN Bringing Gas Processing Capacity to 800 MMcf/d South Eddy cryogenic gas processing facility and related pipelines 200 MMcf/d natural gas; 25 MBPD NGLs Constructed 90 miles of new gathering…
  28. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 28
    MIDLAND TO SEALY CRUDE OIL P/L SEGMENT From the Permian Supply Hub to Multiple Markets 400mile, 24 pipeline from Midland O k l a h o m a Cushing to Sealy segment connects to Sealy storage facility Sealy connected to ECHO by…
  29. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 29
    CRUDE DISTRIBUTION SYSTEM Interconnectivity: The Enterprise Business Model Seaway JV EHSC System Chambers South TX Crude System Moore Rd Jct EDS Header Third Party Pipeline Dashed lines indicate under construction EHSC 24…
  30. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 30
    ETHANE EXPORT FACILITY Largest of Its Kind Average Annual Contracted Volumes Shipbuilders Response to Increased Ethane Demand 200 Estimated Ethane / Ethylene Vessel Capacity (1) 150 12 29 10 14 Capacity (MMBbls) MBPD…
  31. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 31
    LONG TERM PROPYLENE MARKET STRONGER THAN EXPECTED 6 of 8 previously PDH projects cancelled or indefinitely delayed Propylene supplies have declined with ethylene cracker utilizing lightend feedstock International demand for…
  32. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 32
    PDH FACILITY Produce up to 1.65 billion lbs/year (25 MBPD) of PGP Consume 35 MBPD of propane 100% of capacity subscribed under feebased contracts with investment grade companies averaging 15 years No contractual volume ramp…
  33. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 33
    ISOBUTANE DEHYDROGENATION (iBDH) Extending the Butane Value Chain EPD Assets Motor Crude Gasoline YGrade Nbutane Isobutane Isobutylene Additives iBDH Isomerization (existing) Crude Gas Plants Fractionation Isobutylene…
  34. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 34
    PROJECT UNDER DEVELOPMENT: Potential Northeast NGL Product Takeaway Project Centennial Pipeline 800mile, 26 / 24 northbound refined products pipeline from Beaumont, TX to Bourbon, IL; idle since 2011 2 MMBbls of refined products…
  35. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 35
    FINANCIAL UPDATE ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
  36. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 36
    SOLID OPERATING PERFORMANCE 5.5 Onshore Liquids 5.3 150 Equity NGL Production 5.5 5.2 Pipeline Volumes(1) 5.0 & Feebased Processing 5.0 130 5.0 Equity NGL Production Feebased Processing 4.7 4.9 Million BPD 4.5 4.3…
  37. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 37
    MARINE TERMINAL / DOCK ACTIVITY (1,2) (1) Crude Oil & Condensate Petrochemical & Refined Products 389 750 691 400 355 103 600 481 557 97 495 300 270 366 286 MBPD MBPD 450 328 97 258 200 300 210 173 100 150 172 210…
  38. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 38
    STRONG FINANCIAL RESULTS (1) Total Gross Operating Margin (Total GOM) Distributable Cash Flow (DCF) 6.0 6.0 5.6 5.2 5.3 5.2 4.8 5.0 5.0 4.4 4.1 4.1 4.1 4.0 4.0 3.8 Billions Billions 3.9 4.0 3.0 3.7 4.1 3.0 3.0 2.0…
  39. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 39
    HISTORY OF FINANCIAL DISCIPLINE WHILE EXECUTING GROWTH STRATEGY Total Growth Capex & Debt Leverage 8.0 7.8 4.6 4.7x 7.0 6.2 4.5x 6.0 2.5 Debt / Adjusted EBITDA 4.4x 4.3x 5.0 in Billions 4.2x 4.2 4.2x 3.9 4.1x 4.0…
  40. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 40
    STRENGTHENING DEBT PORTFOLIO Extending Maturities Without Increasing Costs 19.6 Billion Notes Issued 87.2% Fixed Rate Debt 15 8.0% 20092016 14.1 14.1 13 13.3 7.0% 9.7% Average Maturity Years 13.0 12.4 Cost of Debt…
  41. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 41
    INVESTOR TAKEAWAYS EPDS MLP MODEL WORKS Simple organization structure only one equity security GP sponsor / management interests truly aligned with unitholders BBB+/Baa1 credit rating provides financial strength / access to…
  42. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 42
    MLPs PROVIDE COMPELLING VALUE COMPARED TO OTHER INCOME SECURITIES Median Current Yield 8.0% 7.04% 7.0% 6.0% EPD 5.7% EPD 5.7% 5.0% 4.45% 4.26% 4.0% 3.55% 3.0% 2.0% 1.0% 0.0% Midstream MLP REIT (RMZ) Midstream C-Corp…
  43. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 43
    APPENDIX ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
  44. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 44
    VISIBILITY TO GROWTH: MAJOR CAPITAL PROJECTS 2.2B InService 2016; 6.7B Under Construction In Service Date 2016 1Q 2017 2Q 2017 3Q 2017 4Q 2017 2018 2019+ NGL Pipeline & Services LPG export facility on Gulf Coast (up to 16 MMBbls/mo)…
  45. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 45
    REGIONAL NGL HUBS: GULF COAST VS. EAST COAST NO COMPARISON USGC East Coast SUPPLY Diversity 7 unique basins linked 1 basin for all supply 2016 4.1 MMBPD Estimated 0.8 MMBPD STORAGE Capacity 300 MMBbls (salt dome) 11 MMBbls…
  46. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 46
    NONGAAP RECONCILIATIONS ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
  47. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 47
    TOTAL GROSS OPERATING MARGIN We evaluate segment performance based on our financial measure of gross operating margin. Gross operating margin is an important performance measure of the core profitability of our operations and forms the…
  48. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 48
    ADJUSTED EBITDA Adjusted EBITDA is commonly used as a supplemental financial measure by our management and external users of our financial statements, such as investors, commercial banks, research analysts and ratings agencies to…
  49. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 49
    DISTRIBUTABLE CASH FLOW Distributable cash flow is an important nonGAAP financial measure for our limited partners since it serves as an indicator of our success in providing a cash return on investment. Specifically, this financial…
  50. Morgan Stanley MLP Diversified Natural Gas Conference – Enterprise Products Partners LP – slide 50
    CONTACT INFORMATION Randy Burkhalter Vice President, Investor Relations (713) 3816812 rburkhaltereprod.com Jackie Richert Director, Investor Relations (713) 3813920 jmricherteprod.com ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS…

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