Pembina Pipeline Corporation TSX: PPL NYSE: PBA CKPC - PDH/PP Final Investment Decision February 4, 2019
Investment Summary
Overview Pembina and Petrochemical Industries Company K.S.C (PIC), a wholly-owned subsidiary of Kuwait Petroleum Corporation, to construct a world-scale, integrated propane dehydrogenation (PDH) plant and polypropylene (PP) upgrading…
Investment rationale Western Canadian Sedimentary Basin (WCSB) offers a long-term, structural feedstock advantage through access to an abundant supply of propane CKPCs PDH/PP Facility will create meaningful incremental local demand…
Comprehensive risk mitigation supporting new business entry Through strong collaboration, Pembina, PIC and WCSB producers have de-risked the project to help ensure successful execution and develop a commercial framework that aligns…
Opportunity Overview
What is PP PROPANE PROPYLENE POLYPROPYLENE CONSUMER PRODUCTS (C3H8) (C3H6) (C3H6)n Reusable Shopping Bags Reusable Storage Containers Canadian Currency Automotive Parts RFS Complex CKPC PDH CKPC PP /3rd Party…
Structural changes supporting investment thesis Pricing Impact Unprecedented growth in liquids-rich drilling across North America resulting in continent-wide oversupply of propane 1 Alberta Propane Infrastructure shift (2014 Cochin…
Structural surplus of Western Canadian propane Representative WCSB propane supply & demand(1) Western Canada contains an abundant and highly economic natural gas liquids resources Resource life of Western Canadian propane 400…
Alberta propane feedstock Historical Alberta propane prices(1) 2.50 0.80 After Cochin Reversal Reflects Pipeline Costs 0.60 Mont Belvieu - Edmonton Propane Spread (US/gl) 2.00 0.40 11 cpg Avg Spread Propane Price…
PP is a value-added product North American PP to Edmonton propane price spread(1) 2,500 2,000 1,500 US/MT 1,000 500 - 2010 2011 2012 2013 2014 2015 2016 2017 2018 Propane to PP Spread North America PP Price…
Significant global market opportunity for Alberta PP Long-term global PP supply & demand(1) North American PP demand by end use (2022E)(1) 120 Other 34% Raffia 100 2% Fiber 80 13% MM Mta 60 Blow Molding 1% 40 Film &…
CKPC's PP market opportunity Global PP in North America moves primarily by rail market access One rail car used to transport PP would replace nearly two rail cars currently used to transport propane, thus creating additional rail…
CKPC Overview
CKPC: stronger than the sum of its parts Pembina RFS Complex Canada Propane Propylene PP (23,000 bpd) (550,000 MT) (550,000 MT) United States Asia Third Party South America PDH Facility PP Facility Fractionation Shipping…
PIC overview PIC is the global petrochemical arm of Kuwait Petroleum Corporation with a mandate to continue expanding its asset base worldwide PIC has been operating for over 50 years and has a portfolio of assets spanning eight…
PIC's significant and growing global marketing reach 335 kTa 825 kTa 150 kTa 940 kTa 1,400 kTa 850 kTa 1,200 kTa 1,000 kTa+ 550 kTa 450 kTa 750 kTa 300 kTa Global 3rd Party Supply 3,500 kTa EG marketed out of: Houston,…
Project Details
Ideally located adjacent to Redwater complex CKPC PDH / PP RFS II / III RFS I / ROF Rail & Storage CKPCs facility is strategically located adjacent to Pembinas Redwater fractionation complex 20
Propane supply Propane Supply Capacity RFS I 20 Mbpd WCSB propane production Peace C3+ C2+ exceeds local demand by a factor of 4x Peace C2+ RFS II 20 Mbpd Far reaching natural gas C2+ liquids capture network with Northern…
Capital cost and funding summary Total cost of the PDH/PP Facility is expected to be 4.5 billion, including IDC, based on CKPC's Class II estimate Includes 500 million of certain supporting facilities of which Pembina will own 100%…
Commercial highlights When evaluating investment opportunities Pembina works to ensure its financial guardrails are maintained 40% Two of these financial guardrails relate to fee-for-service contribution: Fee-for-service Maintain…
A prudent approach to manage risk Capital Cost Detailed FEED completed with Class II capital cost estimate Securing EPC lump sum contracting to ensure cost certainty for key portions of the project's scope Project located in the…
A prudent approach to manage risk Plant Start-up Delay Selection of commercially proven technologies Use of top tier engineering, procurement and construction contractors Committed Feedstock CKPC has executed a long-term propane…
Summary
Significant alignment with Pembinas corporate strategy Creates a significant local market for WCSB propane (60% increase in current local demand) Seamless integration to Pembina's Western Canadian NGL value chain Preserve Value…
Project has a strong investment thesis Project has a long-term, diversified, secure, well-connected and abundant supply of propane feedstock Cost effective PP market access to domestic and global export markets via existing rail…
CONTACT US Pembina Pipeline Corporation Suite 4000 585 8th Avenue S.W. Calgary, Alberta T2P 1G1 www.pembina.com investor-relationspembina.com Toll free: 1.855.880.7404 Phone: 403.231.3156 29
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