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Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP

Enterprise Products Partners LP · Jun 6, 2017 · 59 slides

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Slides

  1. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 1
    ENTERPRISE PRODUCTS PARTNERS L.P. BANK OF AMERICA ENERGY CREDIT CONFERENCE June 6, 2017 Chris Nelly Vice President, Finance & Treasurer ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
  2. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 2
    EPD KEY CREDIT HIGHLIGHTS Fully integrated midstream energy company aggregating domestic supply with direct connections to domestic and international demand History of successful execution of growth projects and M&A 64 billion…
  3. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 3
    EPDS UNIQUE ADVANTAGE Significant & Supportive Insider Ownership Supportive and unlevered GP with significant ownership EPCO and affiliates own 32% of LP EPCO & Affiliates units (no structural subordination 100% all…
  4. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 4
    SUCCESSFUL EXECUTION THROUGHOUT CYCLES Increased Cash Distributions for 51 Consecutive Quarters MLP Equities: Higher Correlation to Crude for Last 30 Months EPD Has Delivered Consistent Results Throughout Cycles 400% 1,600 160 1,400…
  5. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 5
    EPD: NATURAL GAS, NGLS, CRUDE OIL, PETROCHEMICALS AND REFINED PRODUCTS Asset Overview Connectivity Pipelines: 50,000 miles of natural gas, NGL, crude oil, petrochemicals and Fully integrated midstream energy company refined…
  6. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 6
    DIVERSIFIED SOURCES OF CASH FLOW BACKED BY FEEBASED BUSINESS MODEL 5.4 Billion Total Gross Operating Margin Natural Gas Gathering & Processing Diminishing for 12 months ended March 31, 2017 Contribution to Total Gross Operating…
  7. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 7
    SUPPLY / DEMAND FUNDAMENTALS ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
  8. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 8
    CURRENT MACRO ENERGY OUTLOOK SupplySide Entering 3rd year of lower 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…
  9. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 9
    CURRENT MACRO ENERGY OUTLOOK DemandSide Dominates This Part of the Cycle 2,000 1,800 U.S. Ethylene Cracker Feedstocks Domestic demandside pull 1,600 70% Growth YE 2016YE 2020E U.S. petrochemicals consumed a record 1,400 1.6…
  10. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 10
    GLOBAL BALANCES: MOST ANALYSTS EXPECT MARKET TO BALANCE BY 2H 2017 Demand / Supply Balance until 2Q17 OECD Total Products Stocks Supply / Demand (MMBPD) Stock Change (MMBPD) Oil demand growth remains robust, especially in…
  11. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 11
    ALL MAJOR U.S. CRUDE OIL BASINS HAVE SOLID RETURNS IN CORE ACREAGE 100% 350 Basin size in current production (MBPD) 1,400 80% 600 875 Rate of Return 60% 300 1,050 40% 20% 0% DJ Niobrara HZ Midland Basin HZ…
  12. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 12
    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…
  13. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 13
    RECOVERY IN RIG COUNTS Permian Eagle Ford 600 548 250 214 500 200 400 361 150 300 103 233 100 85 200 142 100 50 29 0 0 Haynesville DJ 50 70 45 43 53 40 60 40 35 50 30 26 40 25 30 20 15 30 23 15 20 13 10 10…
  14. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 14
    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…
  15. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 15
    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…
  16. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 16
    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…
  17. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 17
    PERMIAN BASIN CRUDE OIL TAKEAWAY EXPECTED TO TIGHTEN Permian Crude Oil Balances 4,500 (using Capacities at 100% Load Factor) 4,000 Other Expansions 3,500 PE2 3,000 PE3 Midland to Sealy Expansion 2,500 MBPD Midland to…
  18. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 18
    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…
  19. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 19
    NATURAL GAS: U.S. GULF COASTCENTRIC DEMAND & FORECASTED FLOW PATTERNS Recently, a new pipe was announced to evacuate oil from SCOOP / Stack towards Gulf region (Midship project sponsored by Cheniere / Kinder / Boardwalk) In…
  20. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 20
    HOW DOES THE HOUSTON SHIP CHANNEL STACK UP Best Overall Attributes of Texas Gulf Coast Houston Freeport Beaumont Corpus Christi Texas City Pilot staffing Military priority One way Tug availability Offshore platforms Traffic…
  21. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 21
    HOUSTON SHIP CHANNEL HAS PLENTY OF CAPACITY Average Utilization is 57% of Peak Movements Houston Vessel Arrivals 20142017 Vessels Month Houston Deepdraft Vessel Movements 2016 arrivals per year 8,300 2016 average movements…
  22. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 22
    U.S. THE LARGEST EXPORTER OF LPG LPG Exports by Destination through March 2017 EPD LPG Exports by Destination Region through March 2017: 46.34 MMBbls % of Cargos Loaded EPD% of Destination Market North America 24% 56% South America 5%…
  23. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 23
    ASIA LPG IMPORT TRENDS Asian countries, in aggregate, import 45% of their LPG needs. A large portion of this demand is consumeroriented and relatively price inelastic India converted 32 million households to LPG in 2016 and is…
  24. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 24
    CONTRACTED LPG EXPORT LOADINGS 16,000 1,150 Cargos Contracted from 20172020 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 2012 2013 2014 2015 2016 2017E…
  25. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 25
    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…
  26. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 26
    U.S. GULF COAST ETHANE BALANCES All Regions West of Appalachia Appalachia MBPD Supply Potential MBPD Supply Potential 800 2,400 (1) 120 600 278 1,800 120 (1) +50 234 (1) 120 400 Utopia Export 259 1,200 233 200 410 460 1,898…
  27. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 27
    ETHANE EXPORT FACILITY Largest of Its Kind Average Annual Contracted Volumes Shipbuilders Response to Increased Ethane Demand 200 Estimated Ethane / Ethylene Vessel Capacity 150 30 205 201 202 195 Capacity (MMBbls) 25…
  28. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 28
    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…
  29. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 29
    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%…
  30. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 30
    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%…
  31. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 31
    PROJECT UPDATES ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
  32. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 32
    EPD VISIBILITY TO GROWTH 8.4B of Major Capital Projects with More to Come MidlandtoECHO pipeline 5.0 Crude oil infrastructure Mont Belvieu Frac IX Permian processing plant 4.5 Ethylene infrastructure 4.0 PDH facility Butane…
  33. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 33
    ETHANE TAKEAWAY SOLUTIONS Steady Volume Commitment Growth ATEX C2 Contracted Volumes ATEX 150 120 Current capacity of 130 MBPD MBPD 90 Expansion to 145 MBPD scheduled by year 60 131 104 116 81 30 end to meet…
  34. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 34
    EXPANDING FOOTPRINT IN DELAWARE BASIN Bringing Gas Processing Capacity to 800 MMcf/d South Eddy Gas Plant Capacity of 200 MMcf/d inlet gas and 25 MBPD of NGL production feeding EPDs 16 MAPL extension Delaware Basin Gas Plant (DBGP)…
  35. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 35
    PERMIAN NGL TAKE AWAY SOLUTION Shin Oak Pipeline Shin Oak 571mile, 24 mixed NGL pipeline Initial capacity 250 MBPD, expandable to 600 MBPD Would consider JV with a strategic partner to support an expansion Supported by…
  36. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 36
    ENTERPRISE WESTERN G&P ASSETS Focus on Increasing Supply Franchise assets in the Rockies feeding EPD's Wyoming downstream NGL system of pipelines, Pioneer fractionation, storage and export terminals Plant Green River Basin…
  37. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 37
    DEMONSTRATED GROSS NGL FRACTIONATION CAPACITY Frac IX on the Horizon 1,400 1,200 IX 1,000 Frac Capacity (MBPD) Forecasted Supply 800 600 400 200 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 LA S. TX Hobbs…
  38. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 38
    MIDLAND TO SEALY CRUDE OIL P/L SEGMENT From Permian Supply Hub to Multiple Markets O K L A H O M A 416mile, 24 pipeline from Midland Cushing to Sealy segment connects to Sealy storage facility NEW MEXICO Sealy connected to…
  39. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 39
    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…
  40. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 40
    CRUDE OIL DISTRIBUTION SYSTEM Connectivity to 4 MMBbls Refining Capacity Capability to Load 4 MMBPD of Crude Oil Products Moore Road Cushing 36/24/24 EHSC 45 draft Galena Park 24 30/30/24 Sealy XOM Baytown 24 VLO H.R.…
  41. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 41
    TYPICAL MIDSTREAM VALUE CHAIN Ethane Feed to Petchems Gas Fuel (Nat Gas) Export Liquids Propane Feed to Petchems Fuel (Heating & Crop Drying) Export NGL Butane Fractionation Feed to Petchems Fuel (Motor) Export…
  42. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 42
    PDH & iBDH Extending the Value Chain w/PetChem H2 Ethane Removing (and Selling) Feed to Petchems Fuel (Nat Gas) Hydrogen Adds Value Gas Export Liquids PDH Propylene Propane (fabrics, plastics, Feed to Petchems paints,…
  43. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 43
    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…
  44. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 44
    ISOBUTYLENE VALUE CHAIN Continuing Strategy: Convert low cost NGLs into value added olefins EPD Assets Crude MTBE YGrade Nbutane Isobutane Isobutylene isoButane Crude Gas Plants Fractionation Isomerization DeHydro Isobutylene…
  45. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 45
    iBDH Converting Low Cost NGLs into Value Added Olefins Capacity Announced January 30 425 kta = 937 million pounds of isobutylene annually Doubles Enterprise capacity Will consume 30 MBPD butane Schedule Engineering is in full…
  46. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 46
    POTENTIAL NEW NATURAL GAS PIPELINE Addressing a Potential Permian Constraint Waha Hub Agua Dulce Hub ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 47
  47. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 47
    FINANCIAL UPDATE ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
  48. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 48
    SOLID OPERATING PERFORMANCE 6.0 Onshore Liquids Pipeline Volumes(1) 160 Equity NGL Production 5.5 & Feebased Processing 5.5 5.4 140 Equity NGL Production Feebased Processing 5.2 5.0 5.0 Million BPD 5.0 120 4.9…
  49. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 49
    MARINE TERMINAL / DOCK ACTIVITY (1,2) Crude Oil & Condensate Petrochemical & (1) 389 399 750 691 400 Refined Products 355 103 132 600 481 557 97 300 270 495 475 366 286 MBPD MBPD 450 328 97 258 267 332 200 300 210…
  50. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 50
    STRONG FINANCIAL RESULTS Total Gross Operating Margin (Total GOM) Distributable Cash Flow (DCF)(1) 6.0 6.0 5.6 5.2 5.3 5.2 4.8 5.0 5.0 4.1 4.1 4.0 3.8 4.0 Billions Billions 3.9 4.0 4.1 3.0 3.7 3.0 2.0 1.5 2.0 1.0…
  51. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 51
    DEMONSTRATED 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(3) 4.3x 5.0 in Billions 4.2x 4.2 4.2x 3.9…
  52. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 52
    STRENGTHENING DEBT PORTFOLIO Extending Maturities Without Increasing Costs 19.6 Billion Notes Issued 88.3% Fixed Rate Debt 18 8.0% 20091Q 2017 17.5 17.7 17.6 17.3 17.3 17 7.0% 9.7% Average Maturity Years 16.5 Cost…
  53. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 53
    MLPs PROVIDE COMPELLING VALUE COMPARED TO OTHER INCOME SECURITIES Median Current Yield 8.0% 6.97% 7.0% 6.0% EPD 6.08% EPD 5.7% 5.0% 4.49% 4.23% 4.0% 3.49% 3.0% 2.0% 1.0% 0.0% Midstream MLP Midstream C-Corp…
  54. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 54
    EPD VISIBILITY TO GROWTH 8.4B of Major Capital Projects with More to Come In Service Date 2016 1Q 2017 2Q 2017 3Q 2017 4Q 2017 2018 2019+ NGL Pipeline & Services South Eddy (Permian) gas plant 200 MMcf/d & related pipelines Done…
  55. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 55
    NONGAAP RECONCILIATIONS ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com
  56. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 56
    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…
  57. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 57
    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…
  58. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 58
    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…
  59. Bank of America Merrill Lynch Energy Credit Conference – Enterprise Products Partners LP – slide 59
    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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