Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — Corporate Update (May 2023)
75 slides from Kinder Morgan's corporate update, May 3, 2023
Slide 1: 2023 Customer Meeting
2023 Customer Meeting West Region Gas Pipelines May 3-4, 2023 The Broadmoor, Colorado Springs CO
Slide 2: Welcome & Opening Remarks
Welcome & Opening Remarks Will Brown VICE PRESIDENT-COMMERCIAL • WEST REGION GAS PIPELINES
Slide 3: Meeting Agenda
Meeting Agenda rd Wednesday, May 3 , 2023 • Welcome & Opening Remarks – Will Brown • Macro Presentation – George Wayne • Regulatory Update – Dave Dewey • Break • Colorado Oil and Gas: Where Do We Go From Here? – Dan Haley • Business Development – Will Brown • Logistics – Tim Dorpinghaus
Slide 4: Cautionary Language
Cautionary Language Regarding Forward-Looking Statements This presentation contains forward-looking statements. These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts. In particular, statements, express or implied, concerning fut
Slide 5: Leader in North American Energy Infrastructure
Leader in North American Energy Infrastructure Kinder Morgan Assets — Note: Volumes per 2023 budget. Business mix based on 2023 budgeted Adjusted Segment EBDA. See Non-GAAP Financial Measures & Reconciliations. — a) Annual capacity at KM share. 5
Slide 6: Kinder Morgan West Region
Kinder Morgan West Region Kinder Morgan Assets ◼ Supply Access: Access to all Western basins with diverse geology and hydrocarbon mix; ◼ Storage Demand: Significant storage capacity with superior connectivity ◼ Power Demand: Renewable energy growth promotes gas-fired power backstop ◼ Mexico Exports:
Slide 7: Macroeconomic Overview
Macroeconomic Overview George Wayne VICE PRESIDENT OF MARKET SERVICES – KM PIPELINES
Slide 8: Key Trends
Key Trends KINDER/MORGAN Permian & NE & Haynesville NE +5.4 Befd Sy on? n® nD nO nV nd wD aD oS oD PY PP SP? SPD PPP gh a a el a ee Continued supply increases U.S. Res/Ind Demand LNG Exports 9.0 Befd a an. & Mex. +4.7 Befdl Wy a? nh 95 nO aN nd DF nO aS AD MOD OM OS OS Om OV 3” MM KM PKK MK PP oS No
Slide 9: Gas Demand
Gas Demand Including Exports 9
Slide 10: North American Supply
KINDER/MORGAN North American Supply 2022 117.4 2032 149.3 2022-2032 CAGR 2.4% _—_————————" Western Canada 10
Slide 11: Key Western Supply Update
KINDERMORGAN Key Western Supply Update
Slide 12: Rockies Update
Rockies Update Wellhead Gas 12
Slide 13: DJ Basin
DJ Basin KINDER/MORGAN Low = Base Hig! to 13 Rigs to 18 Rigs to 23 Rigs Current Rig Level = 16 Flat Prod Rig Level= 10 Wellhead Gas 6.0 Year Over Year Increase (MMcfid) Year to13Rigs to18Rigs to 23Rigs 2022 (21) 59 138 5.0 | 2023 (112) 73 258 2024 50 (204 359 2025 1 218 344 2026 78 174 270 2027 71 1
Slide 14: Permian Basin
Permian Basin Wellhead Gas 14
Slide 15: Permian Basin Infrastructure Forecast – Model Additions
Permian Basin Infrastructure Forecast – Model Additions Q1 2023 Base Case 15
Slide 16: LNG & Mexico Export Outlook
KINDERMORGAN LNG & Mexico Export Outlook
Slide 17: LNG Export Trends
LNG Export Trends World Liquefaction Capacity Outlook Sources: Bernstein, UBS, KM internal analysis 17
Slide 18: Mexico Developments
Mexico Developments 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Mexican Gas Production 2,523.8 2,507.0 2,511.4 2,538.8 2,576.9 2,559.8 2,481.9 2,380.9 2,325.9 2,317.9 The timing of potential US Imports 6,658.6 7,514.7 7,718.9 8,044.0 9,045.6 9,814.0 10,162.0 10,270.7 10,454.8 10,480.6 - CA 578
Slide 19: Questions? Thank you.
KINDER MORGAN Questions? Thank you.
Slide 20: Regulatory Update
Regulatory Update Dave Dewey VICE PRESIDENT OF REGULATORY AFFAIRS
Slide 21: The Federal Energy Regulatory Commission
The Federal Energy Regulatory Commission The Commissioners Commissioner Commissioner Commissioner Chairman Christie Clements Danly Phillips Possible nominees for fifth FERC Outreach FERC Commissioner ◼ We invest significant time and effort with our regulators ◼ Judy Chang – Former Undersecretary ◼ W
Slide 22: It's All About Infrastructure
It’s All About Infrastructure The Rules of the Game ◼ September 1999 – FERC issues certificate policy statement to provide the industry certainty ◼ Works flawlessly for almost two decades ◼ February 2018 – FERC decides it wants to revisit its certificate policy statement ◼ February 2022 - Updated Ce
Slide 23: Environmental Justice
Environmental Justice Roundtable on Environmental Justice and Equity in Infrastructure Permitting ◼ On March 29, 2023, the FERC held a Commissioner-led roundtable to discuss environmental justice and equity in its jurisdictional infrastructure permitting processes ◼ Panel 1: Priorities for Advancing
Slide 24: General Legislative/Regulatory Developments
General Legislative/Regulatory Developments Lower Energy Costs Act ◼ On March 30, 2023, the House of Representatives approved by a bipartisan vote H.R. 1, the Lower Energy Costs Act → First major legislative initiative in the 118th Congress ◼ Possesses the ability to improve federal permitting proce
Slide 25: Questions? Thank you.
KINDER MORGAN Questions? Thank you.
Slide 26: 15 min Break
KINDER/MORGAN 15 min Breakew< =
Slide 27: Colorado: Where Do We Go From Here?
Colorado: Where Do We Go From Here? Colorado Oil & Gas Association Dan Haley President and CEO @ColoradoOilGas | @danhaleyCO 27
Slide 28: Three Chords and the Truth
Three Chords and the Truth • The world needs more energy • All forms of energy have trade-offs • Colorado is caught in the political crosshairs. 28
Slide 29: The World Needs Energy
The World Needs Energy EIA projects nearly 50% increase in world energy usage by 2050, led by growth in Asia Global primary energy consumption by region (2010-2050) quadrillion British thermal units ela 1,000 history projections 900 non-OECD 800 700 Asia 600 500 Middle East 400 Africa Americas 300 E
Slide 30: Demand for Oil and Gas Going Up
Demand for Oil and Gas Going Up 30
Slide 31: Where We Get Our Energy
Where We Get Our En Table 1.3 Primary Energy Consumption by Source & downtoad Quadrillion Btu 4 i} : rth NW ay l NN I\ sa pec Ne AA rc nly AM ARIK YL SAIL GR AAA IMMOANIN A AN 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 — Coal Consumption — Natural Gas Consumption (Excluding Supplemental Gaseo
Slide 32: Where We Get Our Renewable Energy
Where We Get Our Renewable Energy 32
Slide 33: The Energy Transition
The Energy Transition • At its current pace, the energy transition will be completed in … • Mid 2600s • “It is failing because energy is hard, and 3 billion people living in energy poverty are desperate for reliable and scalable energy sources. Meanwhile, 1 billion energy-rich people are resistant t
Slide 34: All Forms of Energy Have Trade Offs
All Forms of Energy Have Trade Offs • 100% shift to renewables is not realistic, according to a coalition of 21 leading energy researchers. • Renewables require new infrastructure, expanded grid capacity and robust transmission methods. • Renewables can only shoulder part of our energy demand 34
Slide 35: 35
35
Slide 36: The Mission
The Mission “This is going to be a bar fight. This is a street fight. This is a back-alley fight. And you’ve got to fight it any way you can, any tool you can use. Whether it’s bans on drilling, whether it’s local regulations, whether it’s severance taxes, you have got to put up as many obstacles, y
Slide 37: Colorado's Oil & Gas Industry Today
Colorado’s Oil & Gas Industry Today • 5th largest oil producer in U.S. • 7th largest natural gas producer • Well-regulated • High tech, innovative • Responsible, safe • Stuck in political crosshairs • Rig Count: 19 • March 2020: 20 • April 2019: 30 • June 2014: 77 37
Slide 38: What Happened? Political and Demographic Shifts
What Happened? Political and Demographic Shifts Ten years ago: • Colorado’s demographics were changing • Evenly divided electorate turning increasingly blue • Nearly 800,000 new voters since 2013 • Population was growing • Influx of out of state residents, unfamiliar with oil and natural gas • 7 of
Slide 39: What Happened to Colorado?
What Happened to Colorado? • Unfavorable Political Environment • Since 2019: One-party control at state level • Governor, State Senate, State House, AG, SOS, Treasurer, CU Board of Regents, Two US Senators, Congressional Delegation (5 Ds, 3 Rs) • Activists or activist-backed candidates winning local
Slide 40: Issues Facing Industry In Colorado
Issues Facing Industry In Colorado • Aggressive/Overzealous Regulatory Environment • State regulatory agencies have completed multiple rulemakings with more to come • Added at least $500 M/annually to cost of doing business in Colorado • New professional COGCC approved rules without fully understand
Slide 41: More than 30 Rulemakings in Ten Years
More than 30 Rulemakings in Ten Years • 2010 - Clean Air Clean Jobs • Flowlines • 2011 - Hydraulic Fracturing Fluid • Wellbore Integrity Disclosure • Location Assessment • Cumulative Impacts • 2012 - Groundwater Monitoring and • Air Monitoring & Inventory Baseline Sampling • Mission Change and more…
Slide 42: The Path Forward: Technology
The Path Forward: Technology • Lean in to the environment • We need to be cleaner, better safer • Creates efficiencies • Engineered solutions to nagging issues • Increases safety • Helps the environment 42
Slide 43: The Path Forward: Technology
The Path Forward: Technology Noise complaints Emissions/Climate Change • Quiet “frac” fleets • Closed-loop systems • Electric rigs/pumping engines (also • Tankless production eliminate source emissions) • Ending routine venting/flaring Surface use • Fenceline air monitoring, LDAR, drones • Horizonta
Slide 44: Developing Our Resources Cleaner and Better
Developing Our Resources Cleaner and Better • The Colorado Molecule • State rules and technological advances have led to: • Decreased emissions • Reduced leaks • Limited venting and flaring • Less disturbed land • From 2011 to 2017, Colorado’s oil and natural gas industry saw a nearly 50 percent red
Slide 45: Developing Our Resources Cleaner and Better
Developing Our Resources Cleaner and Better • The Colorado Molecule • Ambient methane concentrations from oil and gas have gone down 50 percent from 2013-2019 • Ethane concentrations went down 65 percent from 2013-2019 • Total Volatile Organic Compounds are down 57 percent from 2011 to 2020 along Fr
Slide 46: The Way Forward
The Way Forward Build Your Coalition Now Find partners who care about your state and economy • Business organizations • Labor unions • Advocacy groups • Community leaders/influencers • Authentic grassroots support 46
Slide 47: The Way Forward
The Way Forward Build Political Alliances • Energy is Non-Partisan • Find Democrats and Republicans • Strengthen Relationships Now • Inform Industry Employees • COGA Voter Guide • Newsletters 47
Slide 48: The Way Forward
The Way Forward Employee Engagement • Show up • Be seen, be heard • Change the narrative • Talk about shared values • Humanize and personalize the industry • Build databases 48
Slide 49: COGA LEAD outreach program
COGA LEAD is a program dedicated to increasing our outreach to state and local elected officials, including: • New Legislator Reception – Congratulating and welcoming incoming legislators; • Day at the Capitol – COGA members visit with Colorado state legislators to strengthen relationships; • Educat
Slide 50: The Way Forward
The Way Forward Identify Your Values • Philanthropy • Volunteer hours • Environmental benefits • Report shared statewide 50
Slide 51: The Way Forward
The Way Forward Share Your Impact • Third-party studies • County by county data • Safety numbers • Positive environmental impacts 51
Slide 52: The Way Forward
The Way Forward Share Your Impact • Fact Sheets • Studies • Online Tools 52
Slide 53: House Bill 1294/Senate Bill 201
House Bill 1294/Senate Bill 201 • Assess and activate allies • One pagers/Support/Opposition • Webinars • Action items • Don’t fight alone! • Engage workforce, supporters • Energy Advocate Email • Take Action page • Mobilize • Patch through calls • Op-eds/LTEs • Radio/digital/TV • Traditional Media
Slide 54: Lessons Learned
Lessons Learned • Don’t get caught flat-footed • Fight complacency • Engage your employees • De-politicize energy • Build relationships • Both sides of the aisle • Regulatory • Community • Identify your influencers • Be in the trust business • Support those who support you • Build coalitions now • B
Slide 55: What We Know
What We Know • The world needs energy • 1 billion people do not have access to reliable energy • Colorado can help supply clean energy molecules • All forms of energy have trade-offs • Batteries, land use • Oil and natural gas will continue to play a role in that mix • Energy transitions are slow •
Slide 56: Broader Impacts and Challenges
Broader Impacts and Challenges 56
Slide 57: Broader Impacts and Challenges
Broader Impacts and Challenges 57
Slide 58: Broader Impacts and Challenges
Broader Impacts and Challenges 58
Slide 59: Why This Matters
Why This Matters COLORADO OIL&GAS ASSOCIATION
Slide 60: Questions?
Questions? www.coga.org dan.haley@coga.org @ColoradoOilGas
Slide 61: Business Development Updates
Business Development Updates Will Brown VICE PRESIDENT-COMMERCIAL • WEST REGION GAS PIPELINES
Slide 62: Kinder Morgan West Region Market Summary
Kinder Morgan West Region Market Summary ◼ Key Developments ◼ Continued Renewable Penetration, Coal Retirements ◼ West Coast LNG (ECA, MPL, Amigo) ◼ Incremental Mexico (Baja) New Power Plants ◼ Incremental Arizona Power Demand ◼ 4.2 BCF/d Permian Expansions ◼ Aliso Canyon MSQ Increase ◼ Rockies Prod
Slide 63: CO Front Range
CO Front Range ◼ Overview/Description: ◼ Population/industrial growth along the Colorado Front Range is driving increased demand for ◼ Natural Gas Infrastructure for LDCs ◼ Dispatchable Natural Gas Electric Generation ◼ Potential Projects: ◼ Access to DJ, Midcontinent, and Anadarko Basins for increa
Slide 64: Bakken (WBI) to Cheyenne
Bakken (WBI) to Cheyenne ◼ Overview/ Description: ◼ Project to create a firm path from the Bakken to Cheyenne Hub using Fort Union Gas Gathering (FUGG), Bighorn Gas Gathering (BGG) leased capacity and existing WIC Medicine Bow (WIC MB) capacity. ◼ Project Timeline: ◼ Open Season closed - May 23, 2
Slide 65: Proposed EPNG Storage Projects
Proposed EPNG Storage Projects Rockies Supply Access San Juan Basin Midcontinent Supply Rockies Supply Supply Access Access ARIZONA NEW MEXICO Albuquerque TEXAS CALIFORNIA Proposed Phoenix Nichols Gas Storage Location Permian Basin Washington Ranch Supply Storage Tucson Proposed El Paso Arizona Ener
Slide 66: Arizona Energy Storage
Arizona Energy Storage ◼ New Bedded Salt Storage (4 salt caverns) in Eloy, Az ◼ Hydrogen Ready Caverns ◼ MSQ = 4 Bcf (1 Bcf each) ◼ MDWQ = 400 MMcf/d (100 ea) ◼ MDIQ = 183 MMcf/d (45.75 each) ◼ Lower Picacho salt bed 3,800’ to 4,500’ below ground surface ◼ Total base gas requirement estimated at to
Slide 67: Winkler Gas Storage
Winkler Gas Storage ◼ New Bedded Salt Storage in Winkler County, Texas ◼ Proposal to initially develop 3 salt caverns ◼ MSQ = 2.85 Bcf [0.95 Bcf working capacity per cavern] ◼ MDWQ = 240 MMcf/d [80 MMcf/d per cavern] ◼ MDIQ = 120 MMcf/d [40 MMcf/d per cavern] ◼ Proposed caverns in the same formation
Slide 68: Nichols Gas Storage
Nichols Gas Storage ◼ New Bedded Salt Storage in Potter County, Texas ◼ Proposal to initially develop 3 salt caverns ◼ MSQ = 1.72 Bcf [0.43 Bcf working capacity per cavern] ◼ MDWQ = 200 - 300 MMcf/d [50 - 75 MMcf/d each) ◼ MDIQ = 100 - 200 MMcf/d [25 - 50 MMcf/d each ◼ Reservoir created in Lower Cle
Slide 69: Maricopa Expansion
Maricopa Expansion ◼ Overview/ Description: ◼ Increased capacity to the Phoenix, AZ area due to incremental Install Greenfield natural gas fired generation Compression ◼ Facilities / In-Service: ◼ Target in-service June 2025 ◼ New greenfield reciprocating compressor on Line 1203 in Yavapai County,
Slide 70: Desert Southwest and West Coast Mexico Growth
Desert Southwest and West Coast Mexico Growth LNG Projects Power Generation EPNG (Existing) 3rd Party Pipelines (Existing) NEW MEXICO ARIZONA CALIFORNIA Ehrenberg Phoenix TEXAS Greenfield Bullet Pipeline Tucson 1.3 – 1.9 Bcf/d Sierrita PL Energía Costa El Paso Azul LNG Sasabe San Isidro Waha Caborca
Slide 71: Questions? Thank you.
KINDER MORGAN Questions? Thank you.
Slide 72: Logistics
Logistics Tim Dorpinghaus DIRECTOR-COMMERCIAL • WEST REGION GAS PIPELINES
Slide 73: Agenda for the Day
Agenda for the Day Wednesday, May 3rd, 2023 11:30 am Registration Donald Ross Room (upper level, Golf Clubhouse) Noon Lunch Donald Ross Room 2:00 pm Business Meeting Robert Trent Jones Room 6:00 pm Reception Mountain View Terrace 7:00 pm Dinner Mountain View Terrace 73
Slide 74: Agenda for the Day
Agenda for the Day Thursday, May 4th, 2023 6:30 – 8:00 am Breakfast Robert Trent Jones Room 8:15 am Activities Broadmoor West Tour departs 8:30 Jeep Tour John Driscoll; 719-510-4655 Mountain Biking Ken Ulrich; 719-651-3183 Zip Line at Seven Falls Robin Janes; 719-482-5280 Seven Falls Hike Dan Tygret
Slide 75: Thank you for your Business!
KINDER’ MORGAN Thank you for your Business!