Mplx Lp · NYSE:MPLX
Mplx Lp — UBS Midstream & MLP Conference 2018
44 slides from Mplx Lp's conference presentation, January 2018
Slide 1: UBS Midstream & MLP Conference
UBS Midstream & MLP Conference January 2018
Slide 2: Forward-Looking Statements
Forward‐Looking Statements This presentation contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP (“MPLX”) and Marathon Petroleum Corporation (“MPC”). These forward-looking statements relate to, among other things, expectations, estimates and projection
Slide 3: Key Investment Highlights
Key Investment Highlights Diversified large-cap MLP positioned to deliver attractive returns over the long term Forecast distribution growth of ~12% for 2017 and ~10% for 2018 • Largest processor and fractionator in the Marcellus/Utica basins Gathering & • Strong footprint in STACK play and growing
Slide 4: Strategic Actions to Enhance Unitholder Value
Strategic Actions to Enhance Unitholder Value Asset Dropdowns First dropdown in March – ~$250 MM annual EBITDA Simplifies structure – ~8x EBITDA multiple Second dropdown in September – ~$138 MM annual adjusted EBITDA(1) Expected to lower cost of capital MLP-qualifying EBITDA – ~7.6x adjusted
Slide 5: Agreement to Exchange MPC's GP Economic Interests
Agreement to Exchange MPC’s GP Economic Interests Completes the announced plan Announced Dec. 15, 2017 and expected to close Feb. 1, 2018 subject to the completion of refining logistics assets and fuels distribution services dropdown(1) Exchanges MPC’s GP economic interests, including IDR’s, for
Slide 6: Exchange Agreement – Cont'd.
Exchange Agreement – Cont’d. Exchanges MPLX GP/IDR cash distribution requirements to MPC for limited partner unit distributions Expected to be accretive to MPLX distributable cash flow (“DCF”) attributable to common unitholders on a per unit basis in the third quarter and for the full-year 2018
Slide 7: MPC and MPLX's Long-term Strategic Linkage
MPC and MPLX’s Long-term Strategic Linkage MPLX was created in 2012 to grow MPC’s midstream platform Assets and services provided by MPLX are integral to MPC’s operations and MPC is MPLX’s largest customer Earnings streams for assets/businesses sold to MPLX have effectively been converted into
Slide 8: Executed Agreement for Remaining Dropdown from MPC
Executed Agreement for Remaining Dropdown from MPC Expect to close Feb. 1, 2018 Total consideration of ~$8.1 B – $4.1 B in cash and 114 million MPLX units – ~$1 B annual EBITDA – Expected to be immediately accretive to MPLX’s distributable cash flow Assets include: – Refining logistics assets:
Slide 9: Refining Logistics Overview
Refining Logistics Overview Integrated Tank Farm Assets Supporting MPC’s Operations Tanks Racks ~56 MMBBL storage Multiple rail and truck loading racks Docks Gasoline Blending & Associated Piping Handle ocean- and river-going Piping to connect process units, vessels at Gulf Coast refineries
Slide 10: Fuels Distribution Overview
Fuels Distribution Overview Extensive Range of Scheduling and Marketing Services that Support MPC’s Refining and Marketing Operations Services Description Scheduling Supply and demand balancing Annual EBITDA ~$600 MM Third-party exchange, terminaling and storage Bulk purchases and sale of prod
Slide 11: Demonstrated Track Record
Demonstrated Track Record Strong Financial and Operational Results – 2017 Highlights Delivering results – Consistent growth in EBITDA and DCF – On track for year-over-year distribution growth of ~12% – Multiple quarterly volume records Executing organic growth capital plan – Two new processing p
Slide 12: Delivering Consistent Growth in EBITDA and DCF
Delivering Consistent Growth in EBITDA and DCF 81% increase in adjusted EBITDA since MarkWest acquisition 95% increase in DCF while maintaining strong coverage ratio 600 1.50 538 500 474 1.40 423 391 Coverage Ratio 400 375 351 1.30 $MM 298 302 300 1.20 200 442 354 387 285 301 318 100 227 236 1.10 0
Slide 13: Priorities for 2018
Priorities for 2018 Positioning partnership through execution of strategic actions – Expect to close remaining dropdown and IDR exchange on Feb. 1 Execution of organic growth capital plan Deliver attractive returns for unitholders – Forecast ~10% year-over-year distribution growth – Expand por
Slide 14: Logistics & Storage Segment Overview
Logistics & Storage Segment Overview High-quality, well-maintained assets that are integral to MPC – Owns, leases, operates, or has interest in ~4,500 miles of crude oil pipelines and ~5,500 miles of product pipelines Headquarters – 62 light product terminals with ~24 million barrels MPLX Pipeline
Slide 15: Attractive Portfolio of Organic Growth Capital
Attractive Portfolio of Organic Growth Capital Logistics & Storage Segment Utica Build-out and related connectivity Industry solution for Marcellus and Utica liquids Multiple investments – estimated to complete throughout 2017 and 1Q 2018 Ozark Pipeline Expansion Crude sourcing optionality to
Slide 16: Gathering & Processing Segment Overview
Gathering & Processing Segment Overview • Ethane Raw Gathering • Propane Processing Mixed Fractionation NGL Natural Gas and • Normal Butane Plants NGLs Facilities Products • Isobutane Production Compression • Natural Gasoline One of the largest NGL and natural gas midstream service providers – Gat
Slide 17: Natural Gas Supply Growth Forecast
Natural Gas Supply Growth Forecast Marcellus/Utica Basin is the Leading Growth Play ~43% of total U.S. growth is expected to occur in Northeast Total U.S. natural gas Northeast supply is forecasted to Denver-Julesburg grow by ~20 Bcf/d from 2017 to 2027 1.1 Bcf/d 8.6 Bcf/d Anadarko MPLX well-pos
Slide 18: Marcellus/Utica Processing Capacity
Marcellus/Utica Processing Capacity Building Infrastructure to Support Basin Volume Growth Currently operate ~66% of processing capacity in Marcellus/Utica basin 8 ~7.0 Bcf/d processing capacity by end of 2018 2017 plant completions 6 Sherwood VII (in service 1Q17) Sherwood VIII (in service 3Q17) 20
Slide 19: Marcellus/Utica Fractionation Capacity
Marcellus/Utica Fractionation Capacity Building Infrastructure to Support Growing C2 and C3+ Demand Currently operate ~55% of fractionation capacity in Marcellus/Utica basin 700 ~631 MBPD fractionation capacity by end of 2018 600 2017 plant completions Hopedale III C3+ (in service 1Q17) 500 Blueston
Slide 20: Northeast Operations Well-Positioned in Ethane Market
Northeast Operations Well-Positioned in Ethane Market Ethane demand growing as exports and Ohio steam cracker development continues in Pennsylvania Gulf Coast and Northeast Bluestone MPLX well-positioned to support producer customers’ rich-gas Harmon Creek development with extensive distributed
Slide 21: Considerable Scale in the Southwest
Considerable Scale in the Southwest 2.1 Bcf/d Gathering, 1.5 Bcf/d Processing & 29 MBPD C2+ Fractionation Capacity Western Oklahoma Processing Oklahoma Southeast Oklahoma Processing* 425MMcf/d 120MMcf/d Gathering Gathering 585MMcf/d 755MMcf/d Permian *Represents 40% of processing capacity through th
Slide 22: Expanding Southwest Position in High Performance Resource Plays
Expanding Southwest Position to Support Growing Production in High Performance Resource Plays Cana-Woodford Permian Hidalgo Complex 200 MMcf/d Eddy Permian Arapaho Complex Basin Blaine Kingfisher Dewey Rich-gas Newfield Argo Complex Delaware pipeline STACK 200 MMcf/d – Q1 2018 Basin Roger Mills area
Slide 23: Strong Financial Flexibility to Manage and Grow Asset Base
Strong Financial Flexibility to Manage and Grow Asset Base Committed to maintaining ($MM except ratio data) As of investment grade credit profile 9/30/17 Cash and cash equivalents 3 $2.25 B senior notes issued Total assets 19,238 1Q 2017 Total debt(a) 7,051 ~$2.1 B of available liquidity at Re
Slide 24: Long-Term Value Objectives
Long-Term Value Objectives Deliver Sustainable Distribution Growth rate that provides attractive total unitholder returns Drive Lower Cost of Capital to achieve most efficient mix of growth and yield Execute and expand Robust Portfolio of Organic Growth Projects in support of producer customer
Slide 25: Appendix
MPL ENERGYLOGISTICS: Appendix
Slide 26: About MPLX
About MPLX Growth-oriented, diversified MLP with high-quality, strategically located assets with leading midstream position Two primary businesses – Logistics & Storage includes transportation, storage and distribution of crude oil, refined petroleum products and other hydrocarbon-based products
Slide 27: March 1, 2017 Dropdown from MPC
March 1, 2017 Dropdown from MPC Terminal, pipeline and storage assets Total consideration of $2.015 B – 62 light product terminals with ~24 million barrels of – $1.511 B in cash and $504 MM in MPLX equity storage capacity – Represents ~8 times EBITDA multiple – 11 pipeline systems consisting of
Slide 28: Sept. 1, 2017 Dropdown from MPC
Sept. 1, 2017 Dropdown from MPC Assets include MPC’s ownership interests: Total consideration of $1.05 B – Explorer Pipeline Company, representing a 24.51 percent – $630 MM in MPLX equity and $420 MM in cash ownership interest in the company – Represents 7.6 times EBITDA multiple – Lincoln Pipel
Slide 29: Growth Capital Forecast – Projects completed in 2017
Growth Capital Forecast Projects completed in 2017 Est. Completion Logistics & Storage Est. Completion Gathering & Processing Projects Shale Resource Capacity Date Projects Date Rich- and Dry-Gas Gathering(a) Marcellus & Utica N/A Ongoing Utica Build-out projects In Service – 3Q17 Western Oklahoma -
Slide 30: Growth Capital Forecast – Projects expected in 2018
Growth Capital Forecast Projects expected to be completed in 2018 Est. Completion Logistics & Storage Est. Completion Gathering & Processing Projects Shale Resource Capacity Date Projects Date Houston I Processing Plant(a) Marcellus 200 MMcf/d 1Q18 Ozark Pipeline Expansion Mid-2018 Sherwood IX Proce
Slide 31: Pipeline Acquisitions Announced in 2017
Pipeline Acquisitions Announced in 2017 Extending the Footprint of the L&S Segment OzarkBakken PipelinePipeline Acquisition – $500 MM investment – ~9.2% equity interest in the Dakota Access Pipeline (DAPL) and the Energy Transfer Crude Oil Pipeline (ETCOP) projects – Expected to deliver ~520 MBPD fr
Slide 32: Executing a Comprehensive Utica Strategy
Executing a Comprehensive Utica Strategy Phased Infrastructure Investment Cornerstone Pipeline commenced operations in October 2016 Hopedale pipeline connection completed December 2016 Harpster-to-Lima pipeline fully operational in July 2017 Links Marcellus and Utica condensate and natural g
Slide 33: MPLX Strengthens Leading Position in Northeast
MPLX Strengthens Leading Position in Northeast Announced 50/50 joint venture with Antero Midstream in 1Q 2017 Supports Antero Resources’ significant production growth profile in the Marcellus PENNSYLVANIA Shale OHIO – Long-term, fee-based agreement and significant acreage dedication HOPEDALE Com
Slide 34: Major Residue Gas Takeaway Expansion Projects Originate at MPLX Facilities
Major Residue Gas Takeaway Expansion Projects Originate at MPLX Facilities New takeaway pipelines expected to improve Northeast basis differentials MPLX processing complexes: – Access to all major gas residue gas takeaway pipelines – Provide multiple options with significant excess residue capac
Slide 35: Marcellus/Utica Overview
Marcellus/Utica Overview 3.8 Bcf/d Gathering, 5.8 Bcf/d Processing & 531 MBPD C2+ Fractionation Capacity HOPEDALE FRACTIONATION COMPLEX BLUESTONE COMPLEX PENNSYLVANIA HARMON CREEK COMPLEX (currently under construction) OHIO HOUSTON COMPLEX MarkWest Joint Venture with EMG OHIO CONDENSATE MarkWest Joi
Slide 36: Gathering & Processing Segment – Marcellus & Utica Operations
Gathering & Processing Segment Marcellus & Utica Operations Processed Volumes Gathering Available Average – Record volumes averaged over 2.3 Bcf/d Utilization Area Capacity Volume (%) (MMcf/d)(a) (MMcf/d) – Third-quarter volumes up ~25% versus Marcellus 4,520 3,986 88% the same quarter last year H
Slide 37: Gathering & Processing Segment – Marcellus & Utica Fractionation
Gathering & Processing Segment Marcellus & Utica Fractionation Record fractionated volumes of Fractionated Volumes ~365 MBPD Available Average Utilization Area Capacity Volume First full quarter of operations for (%) (MBPD)(a)(b) (MBPD) second de-ethanization plant at 3Q17 Total C3+ 287 219 76%
Slide 38: Gathering & Processing – Southwest Operations
Gathering & Processing Southwest Operations 2.1 Carthage Complex Hidalgo Buffalo Creek Complex Javelina Complex Complex 0 Bcf/d Gathering capacity 1.5 Bcf/d* Processing capacity 29 MBPD C2+ Fractionation capacity *Includes 40% of processing capacity through the Partnership’s Centrahoma Joint Venture
Slide 39: Gathering & Processing Segment – Southwest Operations
Gathering & Processing Segment Southwest Operations Processed Volumes Continued construction of gas processing plants in the Southwest Available Average Utilization Area Capacity Volume (%) (MMcf/d)(a) (MMcf/d) – Delaware Basin (Argo) West Texas(b) 200 197 99% – STACK (Omega) East Texas 600 381 64
Slide 40: Logistics & Storage Contract Structure
Logistics & Storage Contract Structure Fee-based assets with minimal commodity 2016 Revenue – Customer Mix exposure(c) 6% MPC has historically accounted for $51 – over 85% of the volumes shipped on MPLX’s 20% MM crude and product pipelines – 100% of the volumes transported via MPLX’s $171 MM inl
Slide 41: Gathering & Processing Contract Structure
Gathering & Processing Contract Structure Durable long-term partnerships across leading basins Marcellus Utica Southwest Resource Play Marcellus, Upper Devonian Utica Haynesville, Cotton Valley, Woodford, Anadarko Basin, Granite Wash, Cana-Woodford, Permian, Eagle Ford Producers 14 – including Range
Slide 42: Reconciliation of Adjusted EBITDA and Distributable Cash from Net Income
Reconciliation of Adjusted EBITDA and Distributable Cash from Net Income ($MM) 2013 2014 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 Net income (loss) 211 239 333 (14) 72 194 182 187 191 217 (a)The Partnership makes a distinction Depreciation and amortization 70 75 129 136 151 151 1
Slide 43: Reconciliation of Adjusted EBITDA and Distributable Cash from Net Cash Provided by Operating Activities
Reconciliation of Adjusted EBITDA and Distributable Cash from Net Cash Provided by Operating Activities (YTD) Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, ($MM) 2015 2016 2016 2016 2016 2017 2017 2017 Net cash provided by operating activities 427 321 670 975 1,491 377 844 1.338 Ch
Slide 44: MPC's Fully Integrated Downstream System
MPC’s Fully Integrated Downstream System Refining & Marketing Six-plant refining system with ~1.9 MMBPCD capacity* One biodiesel facility and interest in three ethanol facilities One of the largest wholesale suppliers in our market area One of the largest producers of asphalt in the U.S. ~