Pembina Pipeline Corporation · TSX:PPL
Pembina Pipeline — Corporate Update (September 2015)
40 slides from Pembina Pipeline's corporate update, September 2015
Slide 1: Pembina Pipeline Corporation September 2015 Corporate Update
PEMBINA PIPELINE CORPORATION “DOING THE IMPORTANT THINGS RIGHT” September 2015 Corporate Update Presentation TSX: PPL; NYSE: PBA
Slide 2: Forward-looking statements & information
Forward-looking statements & information This presentation is for information purposes only and is demand and pricing and supply and demand for factors should not be construed as exhaustive. not intended to, and should not be construed to constitute, hydrocarbon services. Undue reliance should not b
Slide 3: Pembina: a unique investment opportunity
Pembina: a unique investment opportunity Pure play energy infrastructure company that allows │ investors to participate in the oil and natural gas Common shares outstanding(1) 345 million liquids industry across Canada and North Dakota. We: TSX common share trading price(1) $35.47 are well-positio
Slide 4: Our assets and businesses at a glance
Our assets and businesses at a glance Gas Processing Plant Conventional Pipelines Redwater Fractionator 8,938 km network transports hydrocarbon Midstream Storage Facility products and extends across much of Alberta Truck Terminal and parts of British Columbia, Saskatchewan Pembina Conventional Pipel
Slide 5: Integrated, customer-focused value chain
Integrated, customer-focused value chain Conventional Gas/HVP Value Chain: Gas Services Pipelines Midstream • Gathering and processing Mainline Extraction • Transportation on Conventional Pipelines Gathering, • Fractionation at Redwater Production Processing, HVP Feeder Propane export Consumption Fi
Slide 6: Our assets and businesses operate in prolific geology
Our assets and businesses operate in prolific geology ALBERTA SASKATCHEWAN OIL SANDS MONTNEY (Resource life 200+ years) (Resource Life TAYLOR ~170 years) FORT MCMURRAY SEAL & PELICAN LAKE DEEP BASIN SWAN HILLS (Resource Life ~23 years) Fort Saskatchewan EDMONTON DUVERNAY (Resource Life CARDIUM ~500
Slide 7: We are pursuing a fee-for-service growth portfolio
We are pursuing a fee-for-service growth portfolio Projects (all fee-for-service) Capital (C$MM) Phase II NGL/Crude Expansions $ 670 Relative Growth Project Portfolio Phase III Pipeline Expansions(1) $ 2,440 NEBC Expansion(1) $ 220 40% 38% Pembina has the largest committed growth Vantage Expansion (
Slide 8: Project timelines & in-service dates
Project timelines & in-service dates Committed Capital Expected In-Service Date* Expected Project Timelines* Musreau III $4,500 $4,000 ~$1.3 Other billion of capital expected to be put into service in 2015 $3,833 Saturn II SEEP (Midstream Resthaven Expansion $3,500 ) Phase II Expansion Phase III Exp
Slide 9: We are committed to a low risk business platform
We are committed to a low risk business platform $700-$1,000 million of potential incremental EBITDA generated per year on a run-rate basis once Pembina's committed projects are all in-service(1) ~12% - ~1% - 3% 2% 19% 14% 23% 22% 64% 75% ~80% - 85% 2014 2015(2) 2018(3) Fee-for-Service / Cost-of-Ser
Slide 10: Evolution of Pembina's acquisitions
Evolution of Pembina’s acquisitions EV/NOI multiple at acquisition date Current EV/NOI multiple 11.6X 11.6X 11.3X 10.0X 10.0X 9.8X 8.6X 8.4X 6.8X 7.1X Cutbank Edmonton Provident Vantage Weighted Cutbank Edmonton Provident Vantage Weighted Complex(1) North Energy(3) Pipeline(4) Average Complex(1) Nor
Slide 11: Dividend growth supported by growing cash flow
Dividend growth supported by growing cash flow 5.8% $2.50 $2.00 9.1% ACFPS(1) CAGR in BBB CAGR in Dividend per Share 2005 – 2014 2005 – 2014 $1.50 $1.00 $0.50 $- 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Dividends per share Adjusted cash flow from operating activities per share Strong histor
Slide 12: Business Overview
BUSINESS OVERVIEW
Slide 13: Contract overview by business
Contract overview by business Conventional Pipelines Gas Services • Pembina is flexible to offer commercial framework to support customers’ • Pembina is flexible to offer commercial framework to support customers’ needs needs • Standard terms for gas processing agreements include: • Standard terms f
Slide 14: Conventional Pipelines – overview
Conventional Pipelines – overview • Pipeline operational excellence: 99% reliable ALBERTA • Proximal to prolific geology FORT TAYLOR DUNVEGAN MCMURRAY • Q2 2015 throughput: 603 mbpd (~5% increase from Q2 2014) FORT ST JOHN • 2014 throughput: 575 mbpd (~17% increase from 2013) VALLEYVIEW • Connected
Slide 15: Our throughput continues to grow
Our throughput continues to grow • Solid industry performance and strategically located assets have led to strength in Pembina's throughput profile • February 2015: reached a weekly all-time high peak throughput of over 650,000 bpd 618 mbpd 575 mbpd 492 mbpd 650 456 mbpd 600 417mbpd 550 393 mbpd 374
Slide 16: Phase III Expansion, Phase II Expansion and Lateral Program
Phase III Expansion, Phase II Expansion and Lateral Program ALBERTA Phase III Expansion Phase II HVP& LVP Expansions Phase III Expansion (under construction) • Project consisted mainly of pump stations, Completed Phase III Expansion segment storage enhancements and pipeline Previously announced Phas
Slide 17: Vantage Pipeline acquisition & expansion
Vantage Pipeline acquisition & expansion Vantage Pipeline, SEEP and Vantage Expansion • Acquisition cost: $730 million(1) • ~ 700 km ethane pipeline originates in Tioga, North EDMONTON Dakota and terminates near Empress, Alberta Fort Saskatchewan Petrochemical Complex • Current capacity of 40,000 bp
Slide 18: Expansions could bring Alberta capacity to ~1.5 million bpd
Expansions could bring Alberta capacity to ~1.5 million bpd 1,600 ~1,508 mbpd 1,400 1,200 420 1,000 (mbpd) 800 55 53 52 40 600 175 400 200 453 – Pre-Expansion Phase I Phase II Phase III Phase III (Ultimate Capacity) Phase III (2010) (in-service) (LVP in-service April 2015 & (late 2016 to mid 2017) (
Slide 19: Oil Sands & Heavy Oil – overview
Oil Sands & Heavy Oil – overview Syncrude Pipeline • Operational excellence Horizon Pipeline Cheecham Lateral − 99+% reliable over operating history Nipisi Pipeline Mitsue Pipeline • Diverse connectivity to various industry hubs for crude oil Peace Pipeline and condensate • Contracts are long-life w
Slide 20: New Horizon Pipeline System expansion
New Horizon Pipeline System expansion • Pembina plans to expand the existing Horizon Pipeline System to 250 mbpd as requested by the anchor tenant CNRL1 • Expansion includes upgrading of mainline pump stations and other facility modifications for an expected capital cost of $125 million • Expected t
Slide 21: Gas Services – overview
Gas Services – overview • Operational excellence ALBERTA − 96% reliable • Positioned in active and emerging NGL rich plays FORT MCMURRAY • Provide gas gathering, compression and shallow/deep cut processing services − Seven facilities in service CUTBANK COMPLEX • Q2 2015 average processing volume: (M
Slide 22: Growing volumes in Gas Services
Growing volumes in Gas Services 700 Resthaven & Musreau II: in service Q4 2014 600 500 Saturn I: in service Q4 2013 400 MMcf/d 300 200 100 - 2009 2010 2011 2012 2013 2014 Q1 2015 Q2 2015 Gas processing volume* Gas Services is one of Pembina's fastest growing businesses 22 * Volumes at Musreau exclud
Slide 23: Expanding to meet customer demand
Expanding to meet customer demand 1,600 1,463 80,000 MMcf/d 1,400 100 70,000 100 100 1,200 200 60,000 200 NGL and C5 Output (bpd) 1,000 60 60 60 60 50,000 100 MMcf/d 130 800 40,000 200 600 30,000 50 growth in contracted 400 205 20,000 capacity by mid-2016 200 10,000 318 – – Cutbank Musreau Shallow c
Slide 24: NGL Midstream – overview
NGL Midstream – overview Redwater West: Gas Processing Plant Redwater Fractionator • 73 mbpd NGL fractionator and 9 MMbbls of finished product cavern Midstream Storage Facility Truck Terminal storage Rail Terminal Pembina Pipelines • Industry-leading rail-based terminal (largest NGL rail yard in Thi
Slide 25: NGL – fractionation growth
NGL – fractionation growth 300 ~250 RFS II mbpd • New $415 million 73 mbpd C2+ fractionator 250 • Committed take-or-pay revenue streams for 10-year 55 term from in-service date, for 97% of the operating 200 capacity 9 • Expected on-stream date in Q1 2016 mbpd 150 73 • Ethane produced at RFS II will
Slide 26: Terminalling services for Sturgeon Refinery
Terminalling services for Sturgeon Refinery • Provide terminalling services for Sturgeon Refinery (North West Redwater Partnership) under a 30-year fixed return agreement and a 10-year NGL mix purchase and sale agreement related to RFS III • Expected capital cost of $180 million to construct termina
Slide 27: NGL salt cavern storage potential
NGL salt cavern storage potential Substantial storage cavern 40 ~38 development potential MMbbls 35 30 Cavern development: (MMbbls) 25 • At Redwater 20 2.6 15 – 15 caverns in-service 10 17.5 – 6 in development 5 • Significant demand in west 0 In-Service RFS Under Development RFS Potential Growth Co
Slide 28: Crude Oil Midstream – overview
Crude Oil Midstream – overview ALBERTA • Develop and provide terminal, hub & storage services to support the energy industry FORT MCMURRAY • 630 mbbl of above ground crude oil and TAYLOR condensate storage capacity, with 550 mbbl under construction; expansion potential to over 3,000 mbbl • Access to
Slide 29: Our assets are well-positioned and interconnected
Our assets are well-positioned and interconnected CANADIAN DILUENT HUB Crude oil Dilbit Synthetic Crude Diluent Heavy Export Red indicates Pembina-owned existing and proposed pipelines and connections Dashed lines and/or grey text indicates proposed projects whereas black indicates existing assets I
Slide 30: Strong Financial Platform
x a == STRONG FINANCI PEMBINAN'
Slide 31: Financing objectives
Financing objectives Finance growth ~50/50 debt/equity Maintain BBB rating with conservative balance sheet metrics Manage through the investment cycle Ensure ample liquidity to fund capital program Ensure financing flexibility to respond to market conditions Pembina continues to have excel
Slide 32: Access to capital at attractive rates
Access to capital at attractive rates Medium term notes (2013-YTD) Preferred shares (2013-YTD) Common shares (2013-YTD) 700 700 $700 $600 $600 $600 600 600 $600 500 500 $500 Millions($) 400 Millions($) 400 $345 $MM $400 $321 $286 $266 300 300 $300 $250 $250 $250 $214 $225 $200 200 200 $150 $200 100
Slide 33: Funding plan and capital structure is equipped for growth
Funding plan and capital structure is equipped for growth Funding Plan at July 31, 2015 Capital structure at July 31, 2015 (1) $4,500 $4 billion (2015 – 2018) $4,000 27% $3,500 Debt $3,000 $2,500 $MM Capital Preferred 9% 61% $2,000 Expenditures $1,500 3% DRIP $1,000 Common $500 Cash Flow Common Shar
Slide 34: Clean balance sheet
Clean balance sheet 8.0x 7.0x 6.0x Debt / EBITDA (2015E) 5.0x 4.0x 3.0x 2.0x 1.0x 0.0x BBB+ (S&P) A- (S&P) BBB (S&P) BBB+ (S&P) A- (S&P) A (S&P) BBB (S&P) BBB (S&P) BBB+ (S&P) Ba2 (Moody's) NR BBB+ A- BBB BBB+ A- A BBB BBB BBB+ Ba2 NR Pembina continues to employ less leverage than its peers Source:
Slide 35: Summary
“4 PEMBINAG
Slide 36: Our businesses in 2018
Our businesses in 2018 Now…… In 2018……. Conventional Pipelines • Largest conventional crude oil and NGL feeder system in Canada 8,938 km network • 12% increase in km (adding 1,120+ km with Phase III and laterals) Fox Creek to Namao capacity at 260 mbpd • 162% increase in Fox Creek to Namao capacity
Slide 37: We continue driving shareholder value
We continue driving shareholder value 487 % total shareholder return* * Jan 1, 2005 – Dec 31, 2014, inclusive of dividends reinvested 5.8 % CAGR in dividends per share* * 2005 - 2014 $3.4 billion in dividends paid since inception* * To December 2014, Pembina began paying dividends in 1997 17 % avera
Slide 38: Key take-away: we are doing the important things right
Key take-away: we are doing the important things right Assets Growth Stable Well-financed Responsible Value Strategically Sector leading Growing our Strong Working for History of located growth highly balance the interests generating infrastructure portfolio: contracted sheet, of all shareholder ser
Slide 39: Pembina Pipeline Corporation contact
CONTACT US: PEMBINA PIPELINE CORPORATION Suite 4000, 585 8th Avenue S.W. Calgary, AB T2P 1G1 www.pembina.com investor-relations@pembina.com Toll Free: 1-855-880-7404 Phone: (403) 231-3156
Slide 40: Non-GAAP and additional GAAP measures
Non-GAAP and additional GAAP measures This presentation uses certain terms that are not and the additional GAAP term "operating alternative to net earnings, cash flow from defined by GAAP but are used by management margin" (gross profit before depreciation and operating activities or other measures