Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — Wells Fargo Energy Fundamentals Forum 2013
17 slides from Kinder Morgan's conference presentation, Apr 18, 2013
Slide 1: The Diluent Market: A Midstream Operator's Perspective
The Diluent M arket A M idstream Operator’s P erspective W ells Fargo Fundam ental Forum Houston, Texas Don Lindley Vice President Business Development Products Pipelines April 18, 2013
Slide 2: Forward Looking Statements
Forw ard Looking Statem ents 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 future actions, conditions or e
Slide 3: Kinder Morgan at a glance
K inder M organ at a glance Largest midstream and third largest energy company in North America with a combined enterprise value of approximately $110 billion Focus on stable, fee-based assets that are core to North American energy infrastructure Unparalleled footprint of diversified and strategical
Slide 4: Diluent
Diluent a light liquid hydrocarbon primarily used to dilute bitumen (a highly viscous oil) for the purpose of reducing its viscosity to facilitate transportation. Example Quality Specifications for Component Streams to the CRW (Condensate Blend) Pool Property Min Max Density 600 kg/m3 (104oAPI) 775
Slide 5: Diluent
Diluent From the Midstream perspective there are two main sources of diluent, Natural Gasoline and Condensate. Both products contain mostly pentanes and heavier (C5+), and are liquids at ambient temperature and pressure. Natural Gasoline Condensate n-Butane n-Pentane n-Decane Property (Mt Belvieu sp
Slide 6: All things being Equal
All things being Equal Due to the broad range of material that can be used as “diluent” the Canadian market has defined an Equalization Practice which, in the simplest terms possible, financially compensates (or penalizes) each diluent shipper based upon the difference in the product quality deliver
Slide 7: Equalization Overview
Equalization Overview The equalization practice simply equalizes each product stream relative to all other received and delivered product streams. So, if all the streams received by and delivered from a particular pipeline are of similar quality, then the penalty or credit issued to each shipper is
Slide 8: Butane blending
Butane blending In general, the volume of butane and lighter components blended into the diluent stream is restricted by RVP specification limits. Changes have recently been made to the equalization practice to further discourage blending of lighter components. Previous equalization process: All lig
Slide 9: Canadian Forecast Comparisons
Canadian Forecast Com parisons Source: CERI, ERCB, CAPP, NEB Canadian Diluent Demand: 2010: 200-280 kbpd 2014: 310-380 kbpd 2020: 470-670 kbpd 9
Slide 10: Current Canadian Diluent Supply
Current Canadian Diluent Supply Local Canadian Supply 150 kbpd Projected to remain flat or decline through 2020 Rail Supply 30 kbpd (as of 9/2012) Pipeline Capacity 275 kbpd Southern Lights 180 kbpd Cochin 95 kbpd (estimated in service July 2014) 10
Slide 11: New Opportunity
New Opportunity Canadian import requirement for diluent forecast to expand 2013: 200,000 bpd 2020: >500,000 bpd Western Canada is a logical outlet for the increasing condensate production in the U.S. Conversion of the underutilized Cochin pipeline opens up access to this growing condensate market So
Slide 12: Reversing the flow
R eversing the flow Cochin Reversal Project Reversing flow to provide 95,000 bpd light condensate to oil sands producers in Western Canada $260 Million investment Supported by 85,000 bpd shipper commitments for initial 10 year term Project includes construction of new 1 million barrel receipt termin
Slide 13: Kinder Morgan Utica Pipeline
K inder M organ Utica Pipeline Reversal of 300 miles of existing Cochin JV PIPELINE pipeline coupled with truck or rail offloading will provide initial solution in mid-2014 JV Pipeline & expansion of Cochin’s Kankakee terminal in 2015 will provide flow assurance as volumes continue to increase Cochi
Slide 14: Kinder Morgan Condensate Processing
K inder M organ Condensate Processing Processing Unit and 1.9 Million barrels of new tankage on 60 acres within KM’s Galena Park Terminal Access to feedstock from 3 Feedstock KMCC pipeline through KM’s Tanks Pasadena terminal Unit engineered for Eagle Ford production; Splits condensate Unit #1 into
Slide 15: Kinder Morgan Crude & Condensate (KMCC)
K inder M organ Crude & Condensate (K M CC) Batched system delivering crude & condensate from Eagle Ford (Dewitt) to Houston Ship Channel Completed June 2012 300,000 bpd capacity Provides producers with access to condensate market via Explorer/Cochin and Beaumont/LA Refining market through KMCC Hous
Slide 16: CERI forecasts Canadian diluent import demand will exceed 500 kbpd
Fort Saskatchewan 197 kbpd Committed Edmonton Capacity on Cochin & Calgary 108 kbpd Southern Lights Enbridge Southern 91 kbpd Lights remains as Uncommitted Bakken 180 kbpd Capacity Cochin CERI forecasts Pipeline Manhattan Terminal Marcellus Detroit & Canadian diluent Windsor & Utica import demand wi
Slide 17: Questions
The Diluent M ark et A M idstream Operator’s Perspective Questions 17
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