KEY INVESTMENT CONSIDERATIONS One of the largest midstream energy companies Integrated system enables EPD to reduce impact of cyclical commodity swings Large supply aggregator and access to domestic and international markets provides…
EPD: NATURAL GAS, NGLs, CRUDE OIL, PETROCHEMICALS AND REFINED PRODUCTS NGL 47% Crude 29% Petchem 12% NatGas 12% TTM June 30, 2019: $8.5B Gross Operating Margin Pipelines: ?50,000 miles of natural gas, NGL, crude oil,…
EPD’S INTEGRATED MIDSTREAM VALUE CHAIN Earning Fees at Each Link Crude Exports Trucks NGL Wholesale Petrochemical Pipelines It’s not uncommon for Enterprise to touch a molecule 5–7 times throughout the system
CONSISTENT FINANCIAL RESULTS THROUGH BUSINESS CYCLES Results Have Been Consistent Despite Crude Prices... ...Which Has Supported Cash Flow & Distribution Per Unit Growth... …While Building a Margin of Safety for Future Growth Sources:…
GROSS OPERATING MARGIN BRIDGE Details: Non-cash mark-to-market (“MTM”) changes are a function of the hedging of crude oil, natural gas and natural gas liquids (“NGL”) price differentials between regional markets. This hedging is…
DURABLE CASH FLOW METRICS THROUGHOUT COMMODITY CYCLE (1) For a definition, see appendix (2) Represents the operational DCF coverage ratio over the distributions paid (3) Represents the percentages CFFO that were paid in distributions…
FREE CASH FLOW – TRENDING HIGHER Free Cash Flow / Unit (1) Net Cash Outlay for Capital Investments includes Cash used in Investing Activities and cash contributions from / distributions paid to non-controlling interests. (2) For a…
YTD 8/28/19 1 Year YTD 8/6/19 1 Year TTM CFFO TTM Dividend TTM EV/EBITDA TTM P/E Enterprise Products Partners LP 20% 3% 15% -3% 11% 6% 11.9x 12.9x Large Cap Midstream C-Corp Mean 27% 4% 23% 1% 12% 5% 12.9x 21.2x Alerian MLP Index 10%…
STRENGTHENING DEBT PORTFOLIO Extending Maturities Without Increasing Costs 11.5% 8.6% 30.8% 49.1% 3 Year 5 Year 10 Year 30+ Year Average Maturity – Years Cost of Debt 99% Fixed Rate Debt Pro forma as of June 30, 2019(1) 14.9…
FUNDING GROWTH WITH FINANCIAL DISCIPLINE (1) Proforma includes full year EBITDA for Oiltanking. (2) Reduced for expected cash contributions of approximately $635 million from non-controlling interests in Shin Oak NGL pipeline, the…
Market Capitalization: ?$64B Enterprise Value: ?$91B Daily Trading Value: (last 3 months) ?$108MM As of August 6, 2019 Highest credit rating in midstream energy space: BBB+ / Baa1 TTM June 2019 Leverage(1): 3.3x reported >20…
UNCONVENTIONAL PLAYS DECADES OF PRODUCTION Sources: EPD Fundamentals and DrillingInfo Crude Oil Gas Gas EPD Pipelines Existing U.S. Production Oil Liquids (NGL & Products) Marcellus / Utica 34k to 52k locations Unconventional…
OIL AND CONDENSATES: ALMOST ALL THE GROWTH IS FROM PERMIAN & EAGLE FORD Source: EPD Fundamentals August 2019 2,460 2,576 2,601 2,000 2,500 3,000 Current 2020 2025 ROCKIES 929 906 789 700 800 900 1,000 Current 2020 2025 AK &…
NGLS: ?80% OF GROWTH IS FROM PERMIAN AND EAGLE FORD Source: EPD Fundamentals August 2019 1,095 1,173 1,325 0 500 1,000 1,500 Current 2020 2025 ROCKIES 99 98 90 80 90 100 110 Current 2020 2025 AK & CA 1,092 1,108 1,228 0…
U.S. DRY NATURAL GAS SUPPLY POTENTIAL ASSUMING SUFFICIENT MARKETS Source: EPD Fundamentals August 2019 13 14 14 12 13 14 15 Current 2020 2025 ROCKIES 0.8 0.8 0.7 0.6 0.8 1.0 Current 2020 2025 AK & CA 31 31 34 0 20 40…
FUTURE DEMAND FOR U.S. PRODUCTION U.S. Production Demand for U.S. Production – 2025 PRODUCT DOMESTIC MARKET INTERNATIONAL MARKET Ethane (?50% of NGL barrel*) *Assumes full recovery; ethane not consumed by petchems or exported is…
CHEMICAL VALUE CHAIN MARGINS REMAIN STRONG DESPITE VOLATILITY IN ETHYLENE Sources: Hodson, EIA and EPD Fundamentals, August 2019 - 20,000 40,000 60,000 80,000 100,000 MM lb/yr U.S. Ethylene Capacity & Production US Steam…
A MIDLAND BARREL PRODUCES ONLY 12% MORE LIGHT ENDS THAN A BRENT BARREL Light shale oil is easier to refine and contains less ‘bottom-of-the-barrel’ material. This makes a perfect fit for the ‘Refining + Petchem’ complexes commonly…
PERMIAN PRODUCER ECONOMICS ARE DRIVEN BY THE OIL COMPONENT Oil NGL Natural Gas 0.0 0.5 1.0 1.5 2.0 2.5 Volume (BoE) BoE What Comes With a Barrel of Permian Oil? 50% of NGL is Ethane Oil NGL Natural Gas $/bbl $0…
LIGHT CRUDE OIL: STACKING UP THE DISTILLATE, GASOLINE AND PETCHEM COMPONENTS ?60% Diesel and Heavier ?40% Naphtha +5,000 MBPD of light crude oil in next 5 years Source: EPD Fundamentals Petchem Gasoline Produces: 40% of…
U.S. CRUDE EXPORTS: ON OUR WAY TO BEING THE GLOBAL POWERHOUSE Crude exports were ?2 MMBPD in 2018; reached 3.7 MMBPD in June 2019 EPD expects exports to reach 8 MMBPD in 2025, mostly light, low sulfur crude oil
LPG DOCK CAPACITY EXPANSIONS WILL BE REQUIRED TO MEET DEMAND Note: Industry Export Capacity at 1,200 MBPD (2018 exports) plus EPD, Mariner East / South and Targa expansions at 85% operating rate Sources: EIA and EPD Fundamentals, August…
U.S. SHALE RESPONSIBLE FOR VIRTUALLY ALL GLOBAL LPG GROWTH IN THE LAST DECADE 0 200 400 600 800 1,000 1,200 2010 2012 2014 2016 2018 2010 2012 2014 2016 2018 2010 2012 2014 2016 2018 2010 2012 2014 2016 2018…
ETHYLENE DEMAND GROWTH REMAINS VERY STRONG LONG TERM 0 100 200 300 400 2012 2016 2020 2024 2028 2032 2036 2040 Global Ethylene Demand, million MT Global Ethylene Demand Banned Ethylene Recycled Ethylene Plastics play an…
?95% OF PLASTIC IN THE WORLD\'S OCEANS ORIGINATE FROM JUST 10 RIVERS 95% Of Plastic Polluting The World’s Oceans Comes From These 10 Rivers Data Source: Schmidt – Export of Plastic Debris by Rivers into the Sea (2017) Consumer…
GLOBAL LPG BALANCES 2018–2025 Demand Growth Expected to Exceed U.S. Supplies IEA: global LPG demand was ?9 MMBPD in 2018 and grew at 4.0% CAGR between 2013 and 2018 • Historical LPG demand is split ?70% heat and 30% petchems…
PLASTICS: FASTEST GROWTH, PAST AND FUTURE Source: IEA GDP 3.0% Oil 1.5% Ethylene 3.3% Propylene 4.2% 10 Year Global Compounded Annual Growth Rates (CAGR) Production Growth for Selected Bulk Materials and GDP IEA: demand for…
Occidental Chemical / Mexichem 1.2 40 Operational Ingleside, TX Chevron Phillips Chemical 3.3 90 Operational Cedar Bayou, TX DowDupont 3.3 90 Operational Freeport, TX ExxonMobil Chemical 3.3 90 310 Operational Baytown, TX Westlake /…
ENTERPRISE HOUSTON SHIP CHANNEL The U.S. Premier Hydrocarbon Export Facility C R U D E , N G L s & P R O D U C T S • Crude Oil • Condensate • Natural Gasoline (C5+) • Refinery Grade Propylene (RGP) • Refinery Grade Butane (RGB) •…
EXPORTS OF CRUDE OIL FROM PADD 3 MBPD 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 2Q 2019* Average Canada 165 196 229 228 288 373 246 South Korea 110 151 261 443 357 331 275 India 33 143 161 188 263 323 185 China 353 370 384…
1H 2019: 55% OF USGC NGL EXPORTS WENT TO ASIA! Enterprise: 104 MMBbls (48%); 59 MMBbls to Asia Source: Waterborne 1H 19 USGC Exported 216 MMBbls C2: 26 MMBbls C3: 154 MMBbls C4: 36 MMBbls Europe: 7% of U.S. NGL Exports C2: 10…
HOUSTON VS. CORPUS CHRISTI AREA Market vs. Destination Houston Area Corpus Christi Supply 5 MMBPD (Growing to 8 MMBPD) 1.4 MMBPD Refiner Demand 4.4 MMBPD 0.8 MMBPD # Local Refiners 12 3 Average Refiner Distillation Unit Capacity…
WE CONTINUE TO INVEST AND GROW ?$6B of Major Capital Projects Under Construction Shin Oak pipeline is expected to ramp to 550 MBPD of capacity in 4Q 2019 Front Range pipeline is expected to ramp to 162 MBPD of capacity in 2021 Texas…
QUALITY OF CAPITAL INVESTMENTS Customer Strength and Durability of Cash Flows Capital Investments: Volume Weighted Capital Investments: Customer Ratings by Volume Contract Length A- to AA- 44.4% BBB- to BBB+ 37.4% BB- to BB+…
In-service: South Eddy and Waha Gas Plants added 350 MMcf/d Orla Gas Plant and related gathering • 3 trains added 900 MMcf/d of capacity and 120 MBPD of NGL production Shin Oak NGL Pipeline added 250 MBPD and expected ramp to 550…
ENTERPRISE’S PERMIAN CRUDE PIPELINE From Permian Supply Hub to Multiple Markets Two parallel pipeline systems from Midland-to-ECHO: • Midland-to-ECHO 1: 418-mile, 24” pipeline with 620 MBPD of capacity • Midland-to-ECHO 2: converted…
OFFSHORE CRUDE OIL EXPORT TERMINAL “SPOT” Note: Design, location and other technical information shown in this presentation is preliminary and subject to change. Offshore Terminal SEALY EHSC 36” Freeport ECHO Existing EPD…
ENTERPRISE CME / NYMEX HOUSTON WTI FUTURES CONTRACT Meeting customer demands: Specifications are reflective of Midland crude and provide a consistent, quality barrel of crude oil • 40 –44 API • 0.275% sulfur • 4 ppm nickel • 4…
iBDH The “Other” DeHydrogenation Project • 25% will fill Enterprise’s HPIB capacity for lubricants, additives and rubber, all on a feedstock cost-plus basis • 25% will fill Enterprise’s MTBE capacity into the export motor gasoline…
ENTERPRISE ETHYLENE SYSTEM Under Development • Cavern capacity 600 million lbs. • Cavern In / Out delivery rates expandable up to 420,000 lbs. per hour • 8 industry pipelines within half mile of Enterprise storage header •…
MORE GROWTH ON THE HORIZON Potential $5–$10 Billion of Opportunities Producer driven projects • Additional gas processing plants • Increase crude pipeline capacity from Permian Basin • Add natural gas, NGL and other crude pipeline…
IEA EXPECTS NATURAL GAS TO HELP REDUCE CO2 EMISSIONS AT THE EXPENSE OF COAL AND OIL The world needs fossil fuels Natural gas is expected to play a central role in reducing CO2 emissions Natural gas is needed to displace coal and oil…
POWER GENERATION FROM SHALE NATURAL GAS AND RENEWABLES HAS LED TO LOWER CO2 EMISSIONS Source: EIA 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Total Emissions in Million Metric…
SHALE PRODUCED LPG AND NATURAL GAS SUPPORT EMERGING ECONOMIES WITH CLEANER FUELS Without access to cleaner fuels, developing nations use wood which exacerbates deforestation and soil erosion. Propane use emits 35% less CO2 than…
U.S. LPG...CHANGING LIVES AROUND THE WORLD In China’s Coal Country, a Ban Brings Blue Skies and Cold Homes (New York Times – February 10, 2018) https://www.nytimes.com/2018/02/10/world/asia/chinacoal- smog-pollution.html A graveyard…
NGLS PRODUCE ADVANCED MATERIALS FOR MAKING LIGHTER CARS AND PLANES Approximately 35% of NGLs are consumed as a feedstock for producing plastics and chemicals, which are used in everyday life Advanced plastics and coatings enables more…
ETHYLENE AND ITS USAGE PRODUCTS YOU CAN’T DO WITHOUT Ethylene is used to make what are known as single use plastics such as water bottles, bags, films and packaging • Less than 25% of ethylene demand is prime target for mandated or…
PROPYLENE IS USED IN DURABLE GOODS AGAIN, EXTREMELY HARD TO REPLACE Propylene is used for its durability and light weight Product complexity (generally part of larger consumer product or structure) and lifespan often makes it a poor…
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”) PRIORITIES Governance and Oversight: The Governance Committee oversees implementation of policies related to environmental protection, transportation compliance, health & safety policies •…
ESG PRIORITIES (continued) Environmental Stewardship Principles: Continuous monitoring of environmental data, allows us to anticipate and prevent issues. Utilize systems to track operational and emissions data, and identify…
TOTAL DIRECT EMISSIONS AND ECONOMIC INTENSITY 59.7% 57.6% 55.0% 26.0% 10% 0% 10% 20% 30% 40% 50% 60% 70% Total Petrochemical Facilities Volumes Total NGL Fractionation Volumes Total Liquid Pipeline Volumes Total…
CREDIT QUALITY OF TOP CUSTOMERS Top 25 Customers Account for 63% of EPD\'s 2018 revenue ?89% of revenue is from customers with an investment grade credit rating or backed by a letter of credit Top 200 Customers Account for 96.0% of…
GROWTH CAPITAL PROJECTS 2018 1Q 2019 2Q 2019 3Q 2019 4Q 2019 2020+ NGL Pipeline & Services Mont Belvieu Frac 9 – 85 MBPD Done Orla gas plants – 900 MMcf/d and related P/L ( I and II in service, III 2Q 2019) Done Done Aegis ethane…
MONT BELVIEU FRACTIONATION CAPACITY This chart measures total supply vs. Mont Belvieu Frac capacity and does not consider available capacity in Louisiana, South Texas or at Conway Source: IEA and EPD Fundamentals published Aug. 2018…
EPD ACCESS TO Y-GRADE IN MONT BELVIEU South Texas Sweeny–Freeport Justice Yoakum Sterling I, II and III Arbuckle I and II Southern Hills Sand Hills West Texas Gateway NGL Express West Texas LPG Line EZ Seminole Chaparral…
DEFINITIONS Return on Invested Capital (“ROIC”) is calculated by dividing non-GAAP gross operating margin for the assets (the numerator) by the average historical cost of the underlying assets (the denominator). The average historical…
DEFINITIONS – ESG 1. Indirect Emission (subpart NN): 40 CFR Part 98 Subpart NN – Suppliers of Natural Gas and Natural Gas Liquids: Natural gas liquids fractionators are installations that fractionate NGLs into their constituent liquid…
INDICATIVE ATTRIBUTION OF GROSS OPERATING MARGIN Slides 10–12 attribute gross operating margin (GOM) among fee-based, commodity-based and differential-based business activities. Most activities fit easily into one category; however,…
DISTRIBUTABLE CASH FLOW We measure cash available for distribution by reference to distributable cash flow (“DCF”). DCF is a quantitative standard used by the investment community for evaluating publicly traded partnerships since the…
GROSS OPERATING MARGIN We evaluate segment performance based on our financial measure of gross operating margin (“GOM”). GOM is an important performance measure of the core profitability of our operations and forms the basis of our…
FREE CASH FLOW Free cash flow (“FCF”) is a traditional cash flow metric that is widely used by investors and other participants in the financial community. In general, FCF is a measure of how much cash flow a business generates during a…
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 rating agencies, to assess…
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