Enterprise Products Partners L.P. · NYSE:EPD
Enterprise Products Partners L.P — Investor Day (March 2007)
134 slides from Enterprise Products Partners L.P's investor day presentation, Mar 29, 2007
Slide 1: Enterprise Products Partners L.P. Analyst Conference New York
Enterprise Products Partners L.P. Analyst Conference New York March 29, 2007
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements and information that are based on Enterprise's beliefs and those of its general partner, as well as assumptions made by and information currently available to them. When used in this presentation, words such as anticipa
Slide 3: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures This presentation utilizes the Non-GAAP financial measures of Gross Operating Margin, EBITDA, Distributable Cash Flow and Consolidated EBITDA. In general, we define Gross Operating Margin as operating income before (i) depreciation, amortization and accretion expen
Slide 4: Meeting Agenda
Meeting Agenda Michael A. Creel - Introduction Robert G. Phillips - Business Introduction / Strategies James H. Lytal - Natural Gas Pipelines / Storage / Offshore A.J. Jim Teague - Gas Processing / NGLs / Gas Marketing James M. Collingsworth -NGL Pipelines Gil H. Radtke - Petrochemical Services Mich
Slide 5: Introduction / Overview
Introduction / Overview Michael A. Creel
Slide 6: Overview
Overview Enterprise Products Partners L.P. (NYSE: EPD) is the primary partnership in the Enterprise family, which includes Enterprise GP Holdings L.P. (NYSE: EPE) and Duncan Energy Partners L.P. (NYSE: DEP) Combined family of partnerships has an equity market capitalization of approximately $18 bill
Slide 7: EPD Key Investment Considerations
EPD Key Investment Considerations Strategically located assets serving the most prolific supply basins and largest consuming regions of natural gas, NGLs and crude oil in the United States Leading business positions across the midstream value chain Over 90% of gross operating margin from diversified
Slide 8: Enterprise Family of Partnerships
Enterprise Family of Partnerships Formation of DEP DEP was created as a vehicle to facilitate the growth of EPD No GP incentive distribution rights (IDRs) and slower growth results in lower long-term cost of equity capital EPD benefits through drop downs to DEP and DEP's direct investment in competi
Slide 9: No GP IDRs at DEP Results in Lower Cost of Equity Capital
No GP IDRs at DEP Results in Lower Cost of Equity Capital Unlike most partnerships, DEP's GP does not have IDRs DEP's GP distribution is always capped at 2% of total distributions Results in a lower cost of equity capital than most partnerships and corporations Makes DEP more competitive in pursuing
Slide 10: Three Partnerships, Three Total Return Profiles
Three Partnerships, Three Total Return Profiles om epeyy 3 2 wm a : EPD 3 om 5 pen Distribution Yield © EPE (Higher Growth / Lower Yield) + Highest potential distribution growth due to leverage provided by 25% GP IDRs in EPD distributions + As EPD grows its distribution or issues new common units, E
Slide 11: Three Partnerships, Three Total Return Profiles
Three Partnerships, Three Total Return Profiles EPE (Higher Growth / Lower Yield) Highest potential distribution growth due to leverage provided by 25% GP IDRs in EPD distributions As EPD grows its distribution or issues new common units, EPE's cash flow increases In 2006, EPD increased its distribu
Slide 12: Consistent Results from Diversified Businesses
Consistent Results from Diversified Businesses
Slide 13: Leadership in the Midstream
Leadership in the Midstream Robert G. Phillips
Slide 14: Strategic Overview
Strategic Overview EPD owns one of the industry's leading midstream asset base Large geographic footprint touches 90% of natural gas production and 85% of reserves in lower 48 states Great market access for NGLs produced to 95% of ethylene capacity and 90% of motor gasoline refining capacity east of
Slide 15: Strategic Overview (continued)
Strategic Overview (continued) Organic growth investments designed to: Expand value chain Increase supply sources Improve market access Optimize capacity Maximize downstream economics New strategies focus on emerging trends / opportunities Unconventional natural gas plays - gathering Shift in NGL pr
Slide 16: Well Positioned for Growth
Well Positioned for Growth 2006 Highlights @ NGL, oil and petrochemical pipelines transport a record 1.8 MMBbls/d @ Natural gas pipelines handle 7.5 Tbtu/d net (10.5 Tbtu/d gross) © NGL fractionator ran at 75% of capacity, record 312 MBPD, net (424 MBPD, gross) @ Development focus on new supply sour
Slide 17: Access to High Growth Supply Regions
Access to High Growth Supply Regions
Slide 18: Multiple Value Chain Corridors
Multiple Value Chain Corridors
Slide 19: Western Value Chain
Western Value Chain Facility 1 Jonah Gas Gathering 2 Pioneer Processing 3 Piceance Creek Gathering Meeker Processing San Juan Gathering Chaco Processing Mid America Pipeline Hobbs Fractionation & Storage (with access to localmarkets, Mexico, Mid-Continent) 9 Seminole (ne in MAPL fee ta MTBY) 10 Mont
Slide 20: Offshore to Onshore Value Chain
Offshore to Onshore Value Chain
Slide 21: Major Capital Projects in Service 2007
Major Capital Projects in Service 2007 2007 is the culmination of several years of capital growth and development activities $2.5 billion new projects to be placed in-service in 2007 Generate significant incremental gross operating margin in 2007, primarily in 3rd and 4th quarters With the installat
Slide 22: Shift in Focus to Rocky Mountain Region
Shift in Focus to Rocky Mountain Region The Rocky Mountain Region has become EPD's next big regional growth strategy Approximately $1.9 billion in acquisitions completed and organic projects initiated since 2005 Attractive long-term fundamentals (long-lived reserves, low FD costs) Commitment by majo
Slide 23: New Projects and Emerging Strategies
New Projects and Emerging Strategies Barnett Shale / Gulf Crossing natural gas pipelines Unloads Texas Pipeline System; provides west to east bridge to access better markets Expands position in Barnett Shale region Expanded natural gas storage play Increased customer demand for seasonal storage Deve
Slide 24: New Projects and Emerging Strategies
New Projects and Emerging Strategies Deepwater Trend miocene and lower tertiary crude oil developments Excess GOM oil pipeline capacity provides competitive advantage as production develops Increase services to expanding refinery sector Increased demand for blending products and offtake of co-produc
Slide 25: Natural Gas Pipelines / Storage and Offshore
Natural Gas Pipelines / Storage and Offshore James H. Lytal
Slide 26: Gas Pipelines, Storage and Offshore
Gas Pipelines, Storage and Offshore Natural Gas Gathering and Transportation Provide best in class wellhead services Position for high growth developments Feed the value chain; maximize basis differentials Natural Gas Storage Economically expand existing facilities Link to existing infrastructure Be
Slide 27: San Juan Basin Gathering and Processing
San Juan Basin Gathering and Processing Record 405 well connects in 2006 Renegotiated long-term agreements on 250 MMcf/d Chaco plant volume up 23% to 615 MMcf/d Majority of gathering contracts are priced on percentage of gas price; provides a hedge to EPD gas fuel requirements
Slide 28: Texas Intrastate Pipeline System
Texas Intrastate Pipeline System Over 8,000 miles of pipeline transporting 5 Bcf/d (gross) Connected to major cities and industrial complexes New long-term agreement with CenterPoint in Houston area Long-term extension of City of San Antonio contract Connected to all the major hubs Waha Hub Connecte
Slide 29: Significant Long-Term Gas Supply
Significant Long-Term Gas Supply Multiple basins Low FD costs Largest processor in South Texas / Gulf Coast North Texas 36" provides bridge to eastern markets
Slide 30: LNG Supply
LNG Supply New LNG facilities being built at Freeport and Beaumont / Port Arthur areas Freeport: 1.5 Bcf/d in 2008 Beaumont / Port Arthur: 2 Bcf/d in 2009 EPD well positioned with pipeline and gas storage assets to provide needed services
Slide 31: South Texas Gathering (Cerrito)
South Texas Gathering (Cerrito) Acquired in summer 2006 Fully integrated Improved run times and lower fuel and LAUF Approximately 200 Olmos wells planned in 2007 Large independents have acquired significant acreage to test shale play Potential for significant growth in rich gas volumes
Slide 32: Waha Gathering and Treating
Waha Gathering and Treating Morrow Gas Play Current production: 155 MMcf/d flowing to EPD Significant growth potential Major players: Anadarko, Forest, Chesapeake, Pogo West Texas Shale Play Early stages of development Thicker than the Fort Worth Shale Major players: Petro Hunt, Chesapeake, Encana,
Slide 33: Sherman Extension Project Barnett Shale Update
Sherman Extension Project Barnett Shale Update New 1.1 Bcf/d, 178 mile pipeline extends EPD's Texas Intrastate System through growing Barnett Shale region Will connect with Boardwalk's Gulf Crossing project Long-term contracts with Devon Energy (largest Barnett Shale producer with volumes projected
Slide 34: Gulf Crossing Project
Gulf Crossing Project Texas and Oklahoma producers need eastbound pipeline capacity to handle increased volumes from Barnett and Woodford Shale plays EPD needed additional outlet for north Texas intrastate pipeline system Gulf Crossing provides access to high priced winter / summer markets and direc
Slide 35: Gas Storage Capacities Current and Projected
Gas Storage Capacities Current and Projected (in Bcf)
Slide 36: Petal / Hattiesburg Gas Storage
Petal / Hattiesburg Gas Storage Converting 2 existing NGL caverns to natural gas Create 2.35 Bcf of capacity in 3Q 2007 Fully contracted 4.5 year payout Developing Petal #8 cavern Currently leaching new 5 Bcf cavern 2 Bcf subscribed long term Significant interest in remaining capacity New supply / m
Slide 37: Wilson Gas Storage
Wilson Gas Storage Developing Wilson #5 cavern Create 5.0 Bcf by 2Q 2009 55% contracted with CenterPoint deal (2.75 Bcf) New 30" pipeline Facility currently connected to EPD pipelines only Plan to build a new header pipeline to create storage hub New pipe connects provide for additional 5 Bcf expans
Slide 38: Mont Belvieu Gas Storage
Mont Belvieu Gas Storage Strong interest in Mont Belvieu gas storage generated by Open Season Low cost conversion of 4 caverns into 20 Bcf of natural gas storage Multiple interconnects provide a Hub service Located adjacent to EPD's Mont Belvieu NGL and petrochemical facilities Utilize to reduce cor
Slide 39: Independence Project
Independence Project Ee @ 1 Beffd capacity Hub platform @ 134-mile, 24” gas pipeline, 1 Beffd capacity @ 10 initial fields connecting 17 wells @ 210 miles of subsea flowlines ’ @ Hub water depth of approximately 8,000 feet © Allrights reserved. Enterprise Products Partners L.P.
Slide 40: World Class Achievements
World Class Achievements World deep-sea record setting Pipeline and riser (8,000 ft.) Platform (8,000 ft.) Subsea production (9,000 ft.) Record setting Largest GOM gas processing facility (1 Bcf/d) World's longest mooring lines (twelve lines, 2.4 miles each) Deepest water depth installation for suct
Slide 41: Installation and Final Steps for First Flow
Installation and Final Steps for First Flow Towed to location at Mississippi Canyon 920 Installed mooring system Complete riser hang-offs Hydro test export line Pack linefill Complete umbilical connections Commission flow lines First flows expected in second half of 2007
Slide 42: Positioned for Future Opportunities
Positioned for Future Opportunities Producers tested numerous wells with over 50 MMcf/d Capacity anticipated to be filled early in 2008 Additional locations to be drilled when capacity is available Independence Hub is strategically located for future growth Lease Sale 181 comprises over 8 million ac
Slide 43: Benefits to Enterprise
Benefits to Enterprise Expand our industry-leading deepwater infrastructure franchise Project to increase Gulf of Mexico natural gas production by 12% Opportunity to leverage our technical skills to provide industry solutions Experience from Marco Polo Major investment that should provide above aver
Slide 44: Deepwater Outlook - Miocene Trend
Deepwater Outlook - Miocene Trend Ownership in: Shelf-based oil pipelines with up to 1 MMBbls/d of capacity to Texas and Louisiana markets Over 600 MBPD of capacity in Deepwater oil gathering pipelines First flows from: Atlantis - late 2007 Neptune - early 2008 Shenzi - early 2009 9 additional disco
Slide 45: Deepwater Outlook - Lower Tertiary
Deepwater Outlook - Lower Tertiary Well positioned for new Lower Tertiary (Wilcox) Trend 6 discoveries with an additional 7 active prospects Producer estimates are 3 - 15 billion Bbls of recoverable oil
Slide 46: NGL Services and Marketing and Natural Gas Services and Marketing
NGL Services and Marketing and Natural Gas Services and Marketing A.J. Jim Teague
Slide 47: Strong NGL Industry Fundamentals
Strong NGL Industry Fundamentals 2006 was a strong year for NGLs characterized by record spreads in 2Q 2006 and 3Q 2006 Key factors are the economy and GDP growth, plant operating rates and gas-to-crude price ratio Ethane extraction increases as ethylene production increases History has shown that i
Slide 48: NGL Services and Marketing
NGL Services and Marketing EPD has created the industry's leading North American NGL value chain integrating gathering, processing, transportation, fractionation, storage and distribution assets Provides connectivity from major NGL supply sources to domestic petrochemical and refining markets and gl
Slide 49: Businesses
Businesses Services: Gathering, processing, transportation, fractionation, storage, supply, etc. Marketing: Packaging of services that meet a customer's needs and brings value to both the customer and to Enterprise
Slide 50: Objectives (How?)
Objectives (How?) Build long-term relationships To aggregate customers, both producers (supply) and consumers (demand); To create options around which we can optimize our system to create additional value; and To generate growth through expansion, extensions or joint ventures
Slide 51: NGL Footprint Facts
NGL Footprint Facts Approximately 14,000 miles of NGL and petrochemical pipelines transporting 1.7 MMBbls/d in 2006 Approximately 9 Bcf/d net processing capacity in 25 facilities (including Pioneer and Meeker) 444 MMBbls/d of net fractionation capacity in 7 locations 162 MMBbls of storage in 10 stat
Slide 52: NGL System Defining Characteristics
NGL System Defining Characteristics Mont Belvieu Hub Anchors NGL system Largest NGL fractionation complex Largest storage network Largest distribution system International reach Swing strength of footprint Storage in multiple locations Wheeling through supply source diversity Arbitrage through syste
Slide 53: NGL System Defining Characteristics: Unparalleled Supply System
NGL System Defining Characteristics Unparalleled Supply System Green River Permian Western Canada Piceance Mid-Continent International Uintah South Texas Four Corners Gulf of Mexico Premier Market Connectivity Refinery Concentration National Footprint Petrochemical Access International Reach Heating
Slide 54: 2007 NGL System
2007 NGL System NGL Fractionation Plant NGL & Liquid Storage Facility Natural Gas Processing Plant Terminal NGL & Liquid Pipelines Import / Export Terminal loeoe © Allrights reserved. Enterprise Products Partners L.P.
Slide 55: U.S. Waterborne LPG Import Growth
U.S. Waterborne LPG Import Growth
Slide 56: 2006 U.S. LPG Imports by Terminal
2006 U.S. LPG Imports by Terminal
Slide 57: NGL System Connectivity Gulf Coast Refinery Services
NGL System Connectivity Gulf Coast Refinery Services
Slide 58: NGL System Connectivity Gulf Coast Petrochemical Services
NGL System Connectivity Gulf Coast Petrochemical Services
Slide 59: 1998 at IPO
1998 at IPO Alabama Mississippi S Petal Texas Louisiana gilg ites fi a \ sd NGL Fractionation Plant NGL & Liquid Storage Facility NGL & Liquid Pipelines Import / Export Terminal [ loe © Allrights reserved. Enterprise Products Partners L.P.
Slide 60: 2000 NGL System
2000 NGL System Tejas NGL acquisition from Shell included ownership in 10 gas processing facilities, 2 NGL fractionators, 20% interest in Dixie Pipeline and Louisiana Pipeline System Completed construction of a refrigerated export facility joint venture on the Houston Ship Channel
Slide 61: 2001 Lou-Tex NGL Pipeline
2001 Lou-Tex NGL Pipeline Completed construction of Lou-Tex NGL Pipeline providing connectivity between the NGL markets in Texas and Louisiana
Slide 62: 2002 Diamond-Koch Storage
2002 Diamond-Koch Storage Acquired 64 MMBbls of NGL storage in Mont Belvieu from Diamond-Koch that included 25 wells and associated distribution pipelines
Slide 63: 2002 Mid-America and Seminole Pipelines
2002 Mid-America and Seminole Pipelines Acquired the Mid-America (MAPL) and Seminole Pipelines and northeastern terminals from Williams which connects the Rocky Mountains and Central United States with the Gulf Coast
Slide 64: 2004 GulfTerra Merger
2004 Gulfferra Merger New Mexico Carlsbad iS aa Waha Gathering Louisi: “Big Thicket Gathering Texas Gathering NGL & Liquid Storage Facility fib Natural Gas Processing Plant —_ NGL & Liquid Pipelines © Allrights reserved. Enterprise Products Partners L.P.
Slide 65: 2005 Ferrellgas Storage and Dixie Pipeline Acquisitions
2005 Ferrellgas Storage and Dixie Pipeline Acquisitions Acquired 3 NGL storage facilities in Arizona, Utah and Kansas, and 4 terminals in Minnesota and North Carolina from Ferrellgas Acquired additional 46% interest in Dixie Pipeline and assumed operatorship
Slide 66: 2006 / 2007 Rockies Growth
2006 / 2007 Rockies Growth Constructing the 750 MMcf/d Pioneer gas processing facility in southwest Wyoming with completion in October 2007 Acquired interest in Jonah Gas Gathering System and currently expanding capacity to 2.3 Bcf/d with completion by late 2007
Slide 67: 2006 / 2007 Rockies Growth
2006 / 2007 Rockies Growth Acquired Piceance Creek Gathering System from EnCana with 1.6 Bcf/d of capacity and extends through the heart of the Piceance Basin to the Meeker gas processing facility Constructing a 750 MMcf/d gas processing facility in Meeker, Colorado with Phase I completion in July 2
Slide 68: 2006 / 2007 Mid-Continent Growth
2006 / 2007 Mid-Continent Growth Constructing new NGL fractionator in Hobbs, New Mexico with 75 MBPD capacity for Rocky Mountains growth and operational in September 2007 Constructing new 70-mile batch-service pipeline from Hobbs to Odessa to exclusively supply Huntsman / Flint Hills ethylene facili
Slide 69: 2006 / 2007 Texas Growth
2006 / 2007 Texas Growth Acquired South Texas 16" Pipeline from ExxonMobil extending from Corpus Christi to South Houston Houston 8" NGL pipeline converted to ethane service January 1, 2006 with capacity of 31 MBPD
Slide 70: 2007 NGL System
2007 NGL System Connectivity to 95% of U.S. ethylene plants Connectivity to 90% of all refineries east of the Rockies
Slide 71: NGL Marketing Support of Asset Growth
NGL Marketing Support of Asset Growth
Slide 72: Natural Gas Services and Marketing
Natural Gas Services and Marketing
Slide 73: Vision
Vision EPD has a unique opportunity to apply the same business concepts to create a leading North American natural gas services and marketing business Leverage an impressive set of natural gas assets that increasingly are linked through our value chain concept Create opportunities to increase throug
Slide 74: Objectives (How?)
Objectives (How?) Build long-term relationships To aggregate customers, both producers (supply) and consumers (demand); To create options around which we can optimize our system to create additional value; and To generate growth through expansion, extensions or joint ventures
Slide 75: Natural Gas Footprint Facts
Natural Gas Footprint Facts Over 20,400 miles of onshore and offshore natural gas pipelines (including Independence Trail) 25 Bcf of current storage capacity growing to approximately 68 Bcf by 2012 9 Bcf/d of equity processing capacity EPD's natural gas assets handle current total gross throughput o
Slide 76: Defining Characteristics
Defining Characteristics Strong supply system Excellent market connectivity Swing capability of footprint Wealth of information
Slide 77: Natural Gas System Strong Supply System
Natural Gas System Strong Supply System
Slide 78: Rocky Mountain Market Connectivity
Rocky Mountain Market Connectivity
Slide 79: Louisiana / Mississippi / Gulf of Mexico Market Connectivity
Louisiana / Mississippi / Gulf of Mexico Market Connectivity Pipeline Interconnects 14 interconnects with 8 interstate pipelines 8 interconnects with 4 intrastate pipelines Storage at Petal and Napoleonville Sherman / Gulf Crossing Project
Slide 80: Texas Pipeline System Market Connectivity
Texas Pipeline System Market Connectivity Texas Pipeline System 51 interconnects with 14 interstate pipelines 53 interconnects with 8 intrastate pipelines Storage at Wilson and Mont Belvieu Sherman / Gulf Crossing Project Industrial users on Houston Ship Channel, Corpus Christi Ship Channel, Beaumon
Slide 81: Natural Gas System
Natural Gas System Swing strength of footprint Storage in key locations Wheeling through supply source diversity Arbitrage through system reach Wealth of information Enterprise serves every kind of application and the largest producing basins
Slide 82: Conclusion
Conclusion As EPD continues to expand its extensive footprint through organic projects and selected acquisitions our Marketing and Services groups will add value through optimization and optionality We will maintain a disciplined approach consistent with our asset based value chain concept Increased
Slide 83: FERC Regulated NGL Pipelines
FERC Regulated NGL Pipelines James M. Collingsworth
Slide 84: MAPL, Seminole and Dixie Pipelines
MAPL, Seminole and Dixie Pipelines
Slide 85: Overview
Overview Regulated NGL Pipelines consists of 5 businesses Mid-America Pipelines Northern System Central System Rocky Mountain System Seminole Pipeline Company Dixie Pipeline Company Enterprise Terminaling and Storage Company Dixie Terminaling and Storage Company
Slide 86: Northern System
Northern System 2,740 pipeline miles Terminals 15 ETS terminals 2 EPOLP terminals 9 third-party terminals Annual transport volumes E/P mix: 23 - 25 MMBbls Propane: 16 - 20 MMBbls Heavies: 6 - 8 MMBbls
Slide 87: Northern Propane System Growth Initiatives
Northern Propane System Growth Initiatives Potential increase in propane receipts in Cochin Expansion of the West Blue pipeline segment from Mankato to Pine Bend Increase Heavies capacity to Pine Bend area Potential for expansion in the Diluent market Increase in natural gasoline deliveries for the
Slide 88: Northern System Rate Case
Northern System Rate Case Northern system has historically provided very competitive shipper rates resulting in under collection of costs and return (FERC 38) Filed new rates in June 2006 (FERC 41) to resolve rate issues and determine the FERC allowable Cost of Service General Commodity Rates (GCR)
Slide 89: Central System
Central System 190-mile expansion was completed in February ahead of schedule and within budget Increase MAPL's bi-directional capacity from Conway to Hobbs by 1.5 MBPM Having bi-directional flow capabilities from Conway to Hobbs allows Shippers to capture the arbitrage between the Conway and Mont B
Slide 90: Rocky Mountain System
Rocky Mountain System Strategically positioned to benefit from growth in Rockies natural gas and NGL production Tied to all significant current and future processing plants in Rockies Signed long term dedication agreements with all but one processor / shipper Competitive rate structure supports extr
Slide 91: Competitive Analysis
Competitive Analysis MAPL's 2007 scheduled volume growth Opal Expansion 1Q 15-20 MBPD Meeker 3Q 30 MBPD Chapita 3Q 4 MBPD Pioneer 4Q 17 MBPD Total 66-71 MBPD Competition with Overland Express (2Q 2008) - MAPL advantages Significant shipper dedications with PPI escalator Full EPD value chain to attra
Slide 92: Seminole Pipeline
Seminole Pipeline 90% owned by Enterprise / 10% owned by INEOS 540-mile Northern segment capable of transporting 180 MBPD of Y-grade into Mont Belvieu 635-mile Southern segment will evolve to a purities system moving 135 MBPD into Mont Belvieu Growth initiatives In April, Seminole will be capable of
Slide 93: Dixie Pipeline
Dixie Pipeline 1,370 mile pipeline from Mont Belvieu to Apex, North Carolina 220 MBPD of capacity with average daily flow rate of 102 MBPD Ownership 74% Enterprise 26% BP Growth initiatives Withdrew terminals and storage locations from FERC rate base and placed them in an unregulated company which p
Slide 94: Petrochemical Services
Petrochemical Services Gil H. Radtke
Slide 95: 2007 Petrochemical Outlook
2007 Petrochemical Outlook Petrochemicals (billion pounds and growth) Ethylene US Global 06 Demand 55 3.1% 242 5.1% 07 Forecast 55 0.5% 251 3.8% Propylene 06 Demand 36 2.5% 159 5.5% 07 Forecast 37 2.3% 168 5.8% Big concentration of new ethylene crackers in Middle East. Far East and Europe expected t
Slide 96: Petrochemical Services Overview
Petrochemical Services Overview Petrochemical segment consists of 5 businesses Butane isomerization (116 MBPD capacity) Propylene fractionation (currently 4.4 billion pounds or 65 MBPD, net capacity) Mont Belvieu hydrocarbon storage (104 MMbbls of usable capacity) Propylene and HP isobutane pipeline
Slide 97: 2007 Mont Belvieu Growth Initiatives
2007 Mont Belvieu Growth Initiatives Pipelines Expanding propylene feedstock capability from Texas City Propylene feedstock from Port Arthur area South Texas NGL pipeline Storage Services Upgrading product handling facilities for increased volumes, new connections and new products Natural gas storag
Slide 98: Butane Isomerization Service
Butane Isomerization Service Isomerization is the process of converting normal butane to high purity isobutane EPD has a combined capacity of 116 MBPD 57 MBPD (49%) is committed under long-term third-party processing contracts with escalation provisions on the fees and 20 MBPD is used as feedstock f
Slide 99: Isomerization Business Outlook
Isomerization Business Outlook Stable demand from long-term contracts base loads isomerization business EPD has available capacity to service future growth in isobutane demand and seasonal demand for gasoline without investing new capital Expect increase in demand for isobutane as premium gasoline c
Slide 100: Propylene Fractionation
Propylene Fractionation Propylene splitters take refinery-grade propylene (RGP) and fractionate it into polymer-grade propylene (PGP) or chemical-grade propylene (CGP) and propane RGP is typically 60-75% propylene with the balance primarily propane RGP is referred to in barrels per day (BPD) of feed
Slide 101: Propylene Assets
Propylene Assets We own and operate 3 polymer-grade propylene fractionation (splitter) facilities with approximately 4.8 billion pounds per year (72 MBPD) of polymer-grade propylene production capacity (our share is 3.9 billion pounds) Basell owns approximately 45% of Splitter 1 and leases this capa
Slide 102: Combined Propylene Systems
Combined Propylene Systems Exxon - Port Allen Breaux Bridge Basell— Lake Charles BP Texas Oty == RGP r Splitter il Refinery — cor Storage Petrochemical Plant — PoP © Allrights reserved. Enterprise Products Partners L.P.
Slide 103: Propylene Outlook
Propylene Outlook Propylene primarily sourced from refineries (to splitters) and as a co-product from steam crackers 2007 world demand expected to be 168 billion pounds 2007 North American demand expected to be 37 billion pounds World propylene demand expected to grow at roughly 5-6% per year and U.
Slide 104: Propylene Expansion
Propylene Expansion Includes the necessary improvements to pipelines, storage and measurement facilities Capacity: 1.0 billion pounds Expandable to 1.5 billion pounds Completion in 3Q 2007 Utilization ramping up to 60% in 2008, 80% in 2009 and 100% in 2010 forward Processing and sales margins of 3.1
Slide 105: Mont Belvieu Storage Services
Mont Belvieu Storage Services Own and operate over 100 MMBbls of underground storage capacity at Mont Belvieu These storage facilities are interconnected by multiple pipelines to other producing and offtake facilities throughout the Gulf Coast, as well as connections to the Rocky Mountain and Midwes
Slide 106: Mont Belvieu Storage Outlook
Mont Belvieu Storage Outlook Growth tied to petrochemical, refinery and NGL fractionation markets as well as imported NGL and our Western expansion Storage expansion tied to this growth, as well as new product storage opportunities for natural gas and refined products Well optimization plan will all
Slide 107: Octane Enhancement
Octane Enhancement EPD owns a facility at Mont Belvieu that produces octane additives for motor gasoline Produced and sold isooctane in 2006 under contract at NYMEX RBOB plus pricing Allowed us to hedge our sales through 4Q 2006 We expect to execute the same hedge program in 2007 Also produce isobut
Slide 108: Isooctane
Isooctane Only the second plant of its kind in the world; in place in advance of the phase out of MTBE Isooctane capacity: 12 MBPD Feedstock comes from our isomerization business Requires 2 gallons of high-purity isobutane to produce 1 gallon of isooctane Engineering work underway for the restart of
Slide 109: Ethanol Drives Demand for Isooctane
Ethanol Drives Demand for Isooctane 2005 Energy Bill effectively removed MTBE from U.S. gasoline market Significant octane loss with 6.0 lbs. vapor pressure Corresponding Renewable Fuels Standard (RFS) mandated ethanol usage Blends to higher vapor pressure of 15.0 lbs. Forces removal of higher vapor
Slide 110: 2007 Gasoline and Ethanol Outlook
2007 Gasoline and Ethanol Outlook Gasoline (MMBPD and growth) 06 Demand 9.2 1.2% 07 Forecast 9.3 1.4% Ethanol (Billion Gallons) As more ethanol plants come on stream in 2007 and more ethanol is blended into gasoline, demand for alkylate and isooctane will increase. This benefits both the isooctane a
Slide 111: Ethanol Capacity and Renewable Fuel Standard
Ethanol Capacity and Renewable Fuel Standard
Slide 112: Financial Overview
Financial Overview Michael A. Creel
Slide 113: EPD Delivers Record 2006 Results
EPD Delivers Record 2006 Results Gross Operating Margin 2006 vs. 2005 NGL Pipelines and Services up 30% due in part to record pipeline volumes, improved processing and fractionation margins Onshore Natural Gas Pipelines and Services down 6% despite volume and margin increases at Texas intrastate whi
Slide 114: Major Organic Growth Projects
Major Organic Growth Projects Expected Start Dates and Cumulative Investment
Slide 115: History of Financial Discipline
History of Financial Discipline 56% of Growth Investment Funded with Equity
Slide 116: Realizing Benefits of Eliminating GP's 50% Splits
Realizing Benefits of Eliminating GP's 50% Splits Landmark action taken by EPD's GP in December 2002 to eliminate GP's 50% IDR for no consideration is beginning to provide significant benefits to debt and equity investors 4Q 2006 annualized savings of $87 million Cumulative savings of $108.6 million
Slide 117: History of Financial Discipline: Managing Distributable Cash Flow
History of Financial Discipline Managing Distributable Cash Flow
Slide 118: Issuance of Hybrids Provides Additional Financial Flexibility
Issuance of Hybrids Provides Additional Financial Flexibility Description $550 Million Principal Amount Long-Term Subordinated Notes (LoTSSM) - 60 Year Maturity; Fixed coupon 8.375% first 10 years Partial equity treatment by rating agencies 75% Fitch; 50% Moody's and SP Allow 10-15% of book capitali
Slide 119: Additional Capacity to Issue Hybrids
Additional Capacity to Issue Hybrids
Slide 120: DEP Financial Objectives
DEP Financial Objectives Facilitate growth objectives of the Enterprise family of partnerships Enable EPD to contribute assets to DEP for cash and / or units while maintaining control of assets, value chain benefits and redeploying proceeds into projects with higher returns Enhance the Enterprise po
Slide 121: Indicative Benefit to EPD from Initial Drop down to DEP
Indicative Benefit to EPD from Initial Drop down to DEP
Slide 122: On Target to Fund Growth
On Target to Fund Growth [Ez © Allrights reserved. Enterprise Products Partners L.P.
Slide 123: Strong Financial Position at December 31, 2006
Strong Financial Position at December 31, 2006
Slide 124: EPD's Model for Sustained Growth
EPD's Model for Sustained Growth Financial discipline and investment grade balance sheet Lower cost of capital than most of peer group due to 25% cap of GP IDRs at EPD and no GP IDRs at DEP Already funded more than 50% of 2006 and 2007 growth capital expenditures with 2006 equity offerings, hybrids,
Slide 125: 2007 Outlook
2007 Outlook Another year of strong operating fundamentals $2.5 billion of new projects begin operations $44 million of annualized demand charges net to EPD at Independence Hub platform began mid-March 2007 First production to Independence and majority of other projects expected to commence in 2H 20
Slide 126: Largest Energy Partnerships Ranked by Enterprise Value
10 Largest Energy Partnerships Ranked by Enterprise Value(1)
Slide 127: Largest Energy Partnerships Ranked by Average Daily Trading Volume
10 Largest Energy Partnerships Ranked by Average Daily Trading Volume(1)
Slide 128: Proven Growth, Superior Returns
Proven Growth, Superior Returns
Slide 129: Reconciliations
Reconciliations © Allrights reserved. Enterprise Products Partners L.P.
Slide 130: Non-GAAP Reconciliations
Non-GAAP Reconciliations ‘angi’ fo GAAP "Operating income" Dedect depreciaiia, amodizalioa and acrica ia operning cnais aad expenses Dedect operaling lease expense paid by EPCO Forthe Quarterty Period. me 408 nes aes estes esses ee 3 142,405 $ 153,304 $ 120,328 § 153,760 § 192,314 $170,950 § 146,414
Slide 131: Non-GAAP Reconciliations
Non-GAAP Reconciliations Forte Quatedy Period eae a aaa ‘el GAAP Met cash us prvi by peti acfeBis” Netincome (1) 3 17@3 $ 19m § 71D ¥ ISAS WwenOT § EAM ¥ 1m s Ere $3 mA Adjesimends bnetincme fp devve Conseiked ERITDA (kd sbi a abet by sp mtb): ‘Addict equity (cere) es of uncon wakes 2m = am) am Ce ‘
Slide 132: Non-GAAP Reconciliations
Non-GAAP Reconciliations Enterprise Products Partners LP_ EBMDA (Dols im 000s, Unauchted) Reconciliation of Non-GAAP EBITDA” tp GAAP ‘Net income” and Net income Additions fo net income tb derive EBITDA: Interest expense (including related amortization) Provision for income taxes Depreciation, amorti
Slide 133: Non-GAAP Reconciliations
Non-GAAP Reconciliations Enterprise Products Partners LP. Distributable Cash Flow (DoBarsin 000s, Unaudited) ‘Year Ended December3 cy ‘Recancifaon of Non-GAAP “Distritfable cash Row" fo GAAP "Net Metincome 3 eottss 5 419,508, Adjisiments to Nel income to devive Distritmiatie cash Row: (at or sabimad
Slide 134: Non-GAAP Reconciliations
Non-GAAP Reconciliations 2007 Forecast Gross Operating Margin For Duncan Energy Partners LP. For Year Ended (Dollars in 000s, Unaudited) December 31, 2007 (Estimated) Revenues $ 849,692 Costs and expenses: Cash costs and expenses 712,620 Depreciation and amortization 26877 Total costs and expenses 7
Enterprise Products Partners — Investor Day (March 2007) on 6ix