2019 Investor Day – Kinder Morgan, Inc.

Kinder Morgan, Inc. · Jan 23, 2019 · 101 slides

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2019 Investor Day January 23, 2019
Kinder Morgan 2019 Investor Day Agenda and presenters TIME DISCUSSION PRESENTER 8:00 8:15 Compelling Investment Opportunity Rich Kinder Executive Chairman 8:15 9:15 Strategic Excellence Steve Kean CEO 9:15 9:45 Financial…
Compelling Investment Opportunity Rich Kinder Executive Chairman 5
Globally, the Need for Energy is Growing Natural gas and petroleum demand expected to grow for decades to come STEADY GROWTH IN GLOBAL ENERGY DEMAND DEMAND GROWTH DRIVEN BY DEVELOPING ECONOMIES Billion tons of oil equivalent % of…
U.S. is the Largest Oil and Gas Producer in the World Abundant supply enables growing U.S. role as exporter OIL AND GAS PRODUCTION Long runway of expected growth in U.S. oil and gas production Million barrels of oil equivalent per day…
Bright Future for U.S. Natural Gas Infrastructure is key to meet demand 2017 2018 2018 2030 Bcfd % Bcfd % Overall demand 9 12% 29 32% Drivers of Growth: LNG 1 65% 14 496% Power 4 15% 4 15% Industrial 1 4% 4 15% Exports to…
Attractive Attributes of Energy Infrastructure KMIs long-lived, hard assets support key inputs to the global economy Energy Consumer Infrastructure Real Estate Utilities Industrials Goods Retail Technology Long-lived, tangible…
Kinder Morgan: Leader in North American Energy Infrastructure Unparalleled and irreplaceable asset footprint built over decades Largest natural gas transmission network in North America 70,000 miles of natural gas pipelines Connected…
Strategic Excellence Steve Kean CEO 14
Simple C-Corp Structure with Highly-Aligned Leadership 14% of KMI is owned by management and board members Management & Public Public Directors Float Float 14% 86% 30% 326mm shares 1,950mm shares 35mm shares 70% Exchange:…
Positioned to Support Future of Natural Gas Kinder Morgan transports 40% of all natural gas consumed in the U.S. U.S. NATURAL GAS PRODUCTION U.S. NATURAL GAS DEMAND Bcfd Bcfd Growth(a) Sector 2018 2030E Bcfd % Marc./Utica, 26 Net LNG…
U.S. Natural Gas Demand Increasingly Export Driven Net LNG exports projected to increase 496% or 14 Bcfd by 2030 Global LNG demand is forecasted to grow from 40 Bcfd in U.S. NET LNG EXPORTS 2018 to 75 Bcfd by 2030(a) Bcfd 18 In 2017,…
U.S. Natural Gas Demand for Power Generation Projected to increase 15% or 4 Bcfd by 2030, representing 36% of power generation market share Natural gas demand from the power sector is expected to have U.S. POWER GENERATION BY FUEL set a…
U.S. Natural Gas Industrial Demand Growth Projected to increase 15% or 4 Bcfd by 2030 Natural gas and its derivatives are used for clothing, plastics, U.S. INDUSTRIAL DEMAND GROWTH FOR NATURAL GAS agriculture, medicine, petrochemicals…
U.S. Natural Gas Demand is Concentrated in Gulf Coast 70% of forecasted 2018-2030 demand and export growth occurs in, or transits, Texas and Louisiana Forecasted Texas and Louisiana demand and export growth between 2018 and 2030:…
Our Unmatched Natural Gas Network and Deliverability Strong fundamentals drive value on existing assets and create investment opportunities U.S. NATURAL GAS DEMAND = Growing supply area Bcfd = Key areas of demand growth Bakken +6%…
Beyond the Backlog Long-term energy fundamentals create value-enhancing opportunities for existing assets and new projects Takeaway for Storage to support Grow crude and Infrastructure to significant renewable power NGL footprints…
501-G Process Update Resolution expected to occur over time with opportunities to mitigate potential financial impact Status: Filed a Form 501-G for 19 assets during Q4 2018(a) SNG and Young Gas Storage have entered into negotiated…
Environmental, Social and Governance (ESG) Committed to being a good corporate citizen Prioritizing ESG Every Day ESG-Related Achievements Operations Management System Published first stand-alone ESG Report in October 2018 Intentional,…
Natural Gas Segment Overview Connecting key natural gas resources with major demand centers Asset Summary Natural Gas Pipelines: 70,000 Miles NGL Pipelines: 2,700 Miles U.S. Natural Gas Consumption Moved: 40% Working Gas Storage…
Growth Driver: Buildout of U.S. LNG Exports Multiple liquefaction and natural gas transport opportunities across KM footprint GLOBAL DEMAND DRIVING SIGNIFICANT BUILDOUT OF U.S. LNG KM NETWORK REACHES MULTIPLE EXPORT FACILITIES EXPORT…
Growth Driver: Surging Permian Production KM providing additional takeaway capacity for associated natural gas production Existing footprint reaches across Texas and connects into all major KM POSITIONED TO SERVE PERMIAN PRODUCTION…
Project Highlight: Gulf Coast Express (GCX) Permian direct-to-Gulf Coast project satisfying multiple growth drivers Project Scope Mainline: 447.5 miles of 42 pipeline originating at the Waha Hub and terminating near Agua Dulce, Texas…
Project Highlight: Permian Highway Pipeline (PHP) PHP provides broad U.S. Gulf Coast market optionality for Permian production Project Scope Mainline: 430 miles of 42 pipeline from the Waha to Katy, Texas areas with connections to the…
Key Market: Exports to Mexico Kinder Morgan delivers 3.1 Bcfd of U.S. natural gas exports to Mexico(a) Extensive footprint offers diverse supply solutions to multiple Mexico interconnections (12 direct, 4 indirect) U.S. natural gas…
Products Segment Overview Strategic footprint with significant cash flow generation Asset Summary Pipelines(a): 9,500 Miles 2018 Throughput(a) 2.3 mmbbld Condensate Processing Capacity 100 mbbld Transmix 5 facilities Terminals: 67…
Stable U.S. Market Demand for Refined Products Expansive footprint positioned to capture market opportunities U.S. REFINED PRODUCTS CONSUMPTION(a) & KM REFINED PRODUCTS VOLUMES TRANSPORTED(b) Our expansive refined products footprint…
Terminals Segment Overview Diversified terminaling network connected to key refining centers and market hubs Asset Summary Total Kinder Morgan Terminals: 157 Terminals Terminals Segment Bulk 34 Terminals Terminals Segment Liquids 56…
Terminals Segment Strategy Critical infrastructure and value-added service solutions Market clearing point between global buyers and sellers Hub Multi-modal connectivity and value-added services Terminals Critical to our customers and…
Strong Liquids Fundamentals Attractive opportunities to supply U.S. products to consumers here and abroad GLOBAL LIQUIDS CONSUMPTION EXPECTED TO EXCEED GROWTH LED BY CHINA AND INDIA (2017 2019) 100 MILLION BARRELS PER DAY BY 2019 World…
Positioned to Support U.S. Gulf Coast Exports Houstons premier refined products aggregation and market-clearing terminaling hub Our Houston Ship Channel position represents the largest Integrated Houston Ship Channel Terminal Footprint…
Big Fields Get Bigger Successful track record of extending productive life of mature fields Significant amounts of recoverable oil in place SACROC NET OIL PRODUCTION FORECASTS SACROC 2.8 billion barrels of original oil in place bopd…
Financial Excellence Kimberly Dang President 42
High-Quality, Diversified Customer Base Strong customer credit, valuable services limit KMIs risk TOP 25 CUSTOMERS Diverse, primarily investment grade customers limit counterparty risk BB+ to BB B- or Below 4% 5% Our average customer…
Averaged 2.5 Billion of Discretionary Capital since 2008 Asset investment & acquisitions over time EXPANSION CAPITAL & CONTRIBUTIONS TO JVs BY YEAR(a,c) TOTAL INVESTED BY TYPE: 1998 2018(b,c,d) billions Expansion Average 32.8 28.3…
Financial Discipline is Part of Our Culture Rigorous forecasting process enables management to react quickly and make informed decisions Update current Detailed Real-time feedback and monthly Cash is king; we focus decision making…
KMI: A Compelling Investment Opportunity Strategically-positioned assets generating substantial cash flow with significant long-term growth opportunities 90% take-or-pay or fee-based earnings(a) 7.8 billion = 2019B Adjusted EBITDA…
KMI: 2019 Budget David Michels Vice President & CFO 56
KMI: 2019B Sustaining Capital in millions 2019 2018 Budget Actual Change Natural Gas Pipelines (a) 356 316 40 Products Pipelines (a) 79 75 4 Terminals (a) 226 210 16 CO2 30 17 13 Kinder Morgan Canada(b) - 10 (10) Corporate /…
KMI: 2019B Discretionary Capital in millions 2019 2018 2019 budget includes: Budget Actual Natural Gas Pipelines 2,268 1,767 0.7 billion JV expansion spending Products Pipelines 168 126 Terminals 147 69 0.6 billion JV debt…
KML: 2019 Outlook and Budget Dax Sanders KML CFO KMI EVP & Chief Strategy Officer 68
Overview of Kinder Morgan Canada Limited (TSX: KML) Stable, fee-based assets central to Western Canadas energy infrastructure Assets include integrated terminals and pipelines that support a key Edmonton Terminals piece of Western…
Asset Snapshot: Leading Crude Oil Terminal Footprint Fully-integrated terminals in Canadas Edmonton crude oil hub C1.3 billion invested since 2006 with opportunities ahead 1 KML-owned land 100% 9 tanks (1 x 150,000 bbl, 8 x 250,000…
Asset Snapshot: Leading Energy Infrastructure Assets Irreplaceable infrastructure in key markets in Western Canada COCHIN PIPELINE (CANADIAN PORTION) Transports condensate from the Canada / U.S. border to Fort Saskatchewan, Alberta, for…
Canadian Crude Oil Fundamentals Long-term production growth, despite near-term transportation constraints, with goal to reach international markets Western Canadian crude oil supply is projected to grow by nearly WESTERN CANADIAN CRUDE…
KML Long-term Opportunities and Risks Established footprint provides attractive opportunities to serve growing Canadian crude oil production OPPORTUNITIES RISKS Incremental rail Original contract provided minimum monthly payments Rate…
Natural Gas Pipelines Segment Presentation 80
Natural Gas Segment Overview Connecting key natural gas resources with major demand centers Asset Summary Natural Gas Pipelines: 70,000 Miles NGL Pipelines: 2,700 Miles U.S. Natural Gas Consumption Moved: 40% Working Gas Storage…
Long-Term Growth Drivers: Natural Gas Pipelines Kinder Morgan capitalizes on industry trends LNG exports: liquefaction facilities and pipeline infrastructure Exports Exports to Mexico Expansions / extensions off existing footprint…
Growth Driver: Buildout of U.S. LNG Exports Multiple liquefaction and natural gas transport opportunities across KM footprint GLOBAL DEMAND DRIVING SIGNIFICANT BUILDOUT OF U.S. LNG KM NETWORK REACHES MULTIPLE EXPORT FACILITIES EXPORT…
Project Highlight: Elba Island LNG Export Terminal Elba Liquefaction Company (ELC)(a) / Southern LNG Company (SLNG) Project Scope Liquefaction facilities (10 small-scale modular units) Ship loading facilities; boil-off gas compression…
Key Market: Exports to Mexico Kinder Morgan delivers 3.1 Bcfd of U.S. natural gas exports to Mexico(a) Extensive footprint offers diverse supply solutions to multiple Mexico interconnections (12 direct, 4 indirect) U.S. natural gas…
Growth Driver: Surging Permian Production KM providing additional takeaway capacity for associated natural gas production Existing footprint reaches across Texas and connects into all major KM POSITIONED TO SERVE PERMIAN PRODUCTION…
Project Highlight: Gulf Coast Express (GCX) Permian direct-to-Gulf Coast project satisfying multiple growth drivers Project Scope Mainline: 447.5 miles of 42 pipeline originating at the Waha Hub and terminating near…
Project Highlight: Permian Highway Pipeline (PHP) PHP provides broad U.S. Gulf Coast market optionality for Permian production Project Scope Mainline: 430 miles of 42 pipeline from the Waha to Katy, Texas areas with connections to the…
Growth Driver: G&P Upside from Continued Shale Growth Opportunities from both operating leverage and capital projects EAGLE FORD & HAYNESVILLE BAKKEN 70% of forecasted 2018-2030 demand and export growth occurs in, or 500 million of…
Growth Driver: Support for Increasing Variable Demand Expect greater daily and seasonal demand volatility from renewable / gas generation, exports and winter conditions Demand drivers requiring enhanced deliverability PLANNED NEW GAS…
Natural Gas: Interstate Pipelines Key statistics Capacity Storage Avg. Remaining Effective Date of Ownership Miles (bcfd) (bcf) Contract Term (yrs) Next Rate Case 100% KMI-owned: (a) TGP Tennessee Gas Pipeline 100% 11,800 12.1 110…
Natural Gas: G&P and Intrastate Assets Key statistics Capacity Avg. Remaining Storage Treating Processing Ownership Miles (bcfd) Contract Term (yrs) (Bcf) (GPM) (Bcfd) Capacity Avg. Remaining Storage Treating Processing 100% KMI-owned…
FERC-Regulated Natural Gas Assets Summary statistics, including remaining contract term and rate moratorium dates (where applicable) Transport Storage Avg. Remaining % of 2017 Revenues KM Capacity Capacity Contract Term from Negotiated…
Products Pipelines Segment Presentation 98
Products Segment Overview Strategic footprint with significant cash flow generation Asset Summary Pipelines(a): 9,500 Miles 2018 Throughput(a) 2.3 mmbbld Condensate Processing Capacity 100 mbbld Transmix 5 facilities Terminals: 67…
KMCC and Double Eagle Update Valuable connectivity to Corpus Christi and the Houston Ship Channel Strong Permian and Eagle Ford production growth driving new projects and increased utilization on existing assets Permian 2019B assumes 7%…
Bakken Crude Update Strong production growth in the Bakken translating into higher transport volumes 2019B estimates 21% year-over-year increase in volumes Bakken transported on our assets from the Bakken oil production +255 mbbld KMI…
Stable U.S. Market Demand for Refined Products Expansive footprint positioned to capture market opportunities U.S. REFINED PRODUCTS CONSUMPTION(a) & KM REFINED PRODUCTS VOLUMES TRANSPORTED(b) Our expansive refined products footprint…
Project Highlight: Roanoke Expansion Securing refined products delivery for the Roanoke / Montvale area Market Drivers Historically, both the Colonial Pipeline Montvale Lateral and Plantation Roanoke Lateral have served the Roanoke,…
Products Pipelines Segment Snapshot Asset statistics Crude oil assets: Statistics Origin Destination KM Crude & Condensate pipeline (KMCC) 264 miles Eagle Ford Shale Field in South TX (Dewitt, Karnes, Gonzales Houston Ship Channel…
Terminals Segment Presentation 105
Terminals Segment Overview Diversified terminaling network connected to key refining centers and market hubs Asset Summary Total Kinder Morgan Terminals: 157 Terminals Terminals Segment Bulk 34 Terminals Terminals Segment Liquids 56…
Terminals Segment Product Mix Commodities serving the worlds most advantaged petroleum and petrochemical industry Bulk Refined Houston Ship Channel position is the largest single refined products and Other Bulk 25% 9% Products /…
Terminals Segment Contract Model Stable, fee-based business model Leased tank capacity (pre-paid monthly) Take-or-Pay Jones Act tanker charters (pre-paid monthly) 71% Minimum volume commitments (per bbl or ton) Fee-based Other…
Terminals Segment Strategy Critical infrastructure and value-added service solutions Market clearing point between global buyers and sellers Hub Multi-modal connectivity and value-added services Terminals Critical to our customers and…
Strong Liquids Fundamentals Attractive opportunities to supply U.S. products to consumers here and abroad GLOBAL LIQUIDS CONSUMPTION EXPECTED TO EXCEED GROWTH LED BY CHINA AND INDIA (2017 2019) 100 MILLION BARRELS PER DAY BY 2019 World…
Positioned to Support U.S. Gulf Coast Exports Houstons premier refined products aggregation and market-clearing terminaling hub Our Houston Ship Channel position represents the largest Integrated Houston Ship Channel Terminal Footprint…
Positioned to Meet Domestic Maritime Demand American Petroleum Tankers (APT) fleet of 16 MR-tankers All 2019 charter expirations are expected to 2019 2020 2021 2022 renew with current customers Palmetto State No exposure to IMO 2020…
Positioned to Serve International Bulk Trade Complementary services supporting multiple bulk commodities Petroleum Coke Coal Vancouver Wharves One of the nations largest handlers of Advantaged U.S. export position in our Premier…
Positioned to Support Alberta Crude Exports Alberta crude oil aggregation and market-clearing terminaling hub Industrys preferred Canadian merchant (i.e. Asset Connectivity non-regulated) crude oil terminal solution 15 Inbound Crude…
Project Highlight: Base Line Terminal 4.8 million barrel Edmonton merchant crude oil terminal Project Scope 12-tank crude oil merchant storage terminal in Edmonton, Alberta KM 50% and Keyera 50% ownership interest Fully contracted…
Beyond the Backlog Long-term liquids fundamentals drive value on existing assets and new projects Crude export KM Terminals demand Advantaged Position: Domestic crude & NGL liquids production growth Current key-asset footprint…
U.S. Gulf Export Demand Continued industry demands with Shale production development 2,500 2,500 2,500 Refined Products LPGs Crude 2,000 2,000 2,000 Thousand Barrels per Day Thousand Barrels per Day Thousand Barrels per…
Texas COLT Crude Offshore Loading Terminal Project Scope 9 million barrel onshore crude storage terminal Connectivity to inbound Houston pipelines Pipeline to a platform located 35 miles offshore of Freeport, TX 2 Single Buoy Mooring…
Terminals Throughput and Tonnage Statistics 2018A vs. 2019B Liquids Throughput Bulk Tonnage Throughput Variance Tonnage Variance mmbbls 2018 2019B mmbbls % tons (millions) 2018 2019B mm tons % Gasoline 463.6 511.9 48.4 10 % Ores /…
CO2 Segment Presentation 121
CO2 Segment 2019 Expansion Program Summary 502 million capex program, flexibility to adjust given dynamic commodity price environment Capex % of Total CO2 Purchased Net Oil Produced Asset (mm)(a) Capex Commentary (mmcfd) (mbopd)…
CO2 Segment 2019 Project Returns at Various Flat Prices Projects expected to generate attractive returns in multiple commodity price environments YATES HZ DRAIN Yates HOLEHZ Drain Hole Program PROGRAM SACROC Conventional SACROC…
CO2 Segment 10 Year Development Plan 2019 2028: Maximizing returns and recoverability Total Net KM Share Keys to Success: Production CapEx(b) Asset (mmboe)(a) (mm) Expansion Program Plans Robust portfolio that is profitable through…
History of Predictable and Stable Oil Volumes Actual oil production within 1.4% of budget 2008-2018 Capex within 0.6% of budget for projects completed NET OIL PRODUCTION: ACTUALS VS. PLAN Mbbld Budget Actual 50 40 30…
Disciplined Approach to Managing Price Volatility Hedge profile: Limited near-term price risk WTI: 2019 67% hedged at 55.81/bbl as of 12/31/2018, 5-year hedge policy requires additional hedges on a rolling basis MIDLAND-CUSHING…
Oil & Gas Production Group: Margins and Costs CO2 Segment: Success maintaining cost structure in rising commodity price market OIL & GAS CASH COST STRUCTURE(a) Commentary / net BOE Disciplined approach to managing cost structure 80…
Big Fields Get Bigger Successful track record of extending productive life of mature fields Significant amounts of recoverable oil in place SACROC NET OIL PRODUCTION FORECASTS SACROC 2.8 billion barrels of original oil in place bopd…
CO2 Outlook: Tall Cotton Long-term development plans San Andres Residual Oil Zone (ROZ) oil saturation similar to water- TALL COTTON FULL FIELD DEVELOPMENT flooded main pay San Andres bbld Several significant San Andres ROZ projects…
Appendix 134
Asset Integrity and Safety are Top Priorities Kinder Morgans EHS metrics consistently outperform the industry Safe operation of our assets is mission critical to our long-term OUR SAFETY PERFORMANCE VS. INDUSTRY(a) success of safety…
Incidents & Releases: Liquids Pipelines Liquids pipeline right-of-way INCIDENTS PER 1,000 MILES(a,b) RELEASE RATE(a,b) Barrels per billion barrel miles 0.57 17.96 0.43 15.50 0.45 12.86 13.05 0.39 12.86…
Incidents & Releases: Natural Gas Pipelines Natural gas pipeline right-of-way INCIDENTS RATE ALL REPORTABLE INCIDENTS(a,b) INCIDENTS RATE ONSHORE RUPTURES ONLY(b,c,d) Incidents per 1,000 miles Incidents per 1,000 miles 0.16 0.52…
Employee Safety Statistics 12-month performance summary as of 12/31/2018 KM LOST-TIME INCIDENT RATE (DART) OSHA RECORDABLE INCIDENT RATE Lost-time injuries per 200,000 hours worked 3.8 OSHA recordable incidents per 200,000 hours worked…
KMI Business Risks Summary Regulatory FERC rate cases (Products Pipelines and Natural Gas Pipelines) Provincial, state, and local permitting issues CO2 crude oil production volumes Throughput on our volume-based assets Commodity…
KML Business Risks and Key Assumptions Summary Industry demand / supply trends Throughput on our volume-based assets If uncontracted volume throughput were higher or lower than forecasted by 10%, the estimated impact on 2019B Adjusted…
KMI GAAP Reconciliation in millions Yr. Ended Yr. Ended Reconciliation of DCF 12/31/18 Reconciliation of Adjusted EBITDA 12/31/18 Net Income 1,919 Net Income 1,919 Noncontrolling interests' portion of certain items (240) Total certain…
KML GAAP Reconciliation for Continuing Operations C in millions Yr. Ended Yr. Ended Reconciliation of DCF 12/31/18 Reconciliation of Adjusted EBITDA 12/31/18 Net Income 1,420 Net Income 1,420 Income from Discontinued Operations, net…