Pembina Pipeline Corporation · TSX:PPL
Pembina Pipeline — Corporate Update (December 2014)
44 slides from Pembina Pipeline's corporate update, December 2014
Slide 1: Corporate Update
PEMBINA PIPELINE CORPORATION CORPORATE UPDATE TSX: PPL, NYSE: PBA December 2014 1
Slide 2: Forward-Looking Statements & Information
FORWARD-LOOKING STATEMENTS & INFORMATION This presentation is for information purposes only and is not intended to, and should not be construed to constitute, an offer to sell or the solicitation of an offer to buy, securities of Pembina Pipeline Corporation. This presentation and its contents shoul
Slide 3: Pembina Is a Unique Investment Opportunity
PEMBINA IS A UNIQUE INVESTMENT OPPORTUNITY Pembina represents a pure play energy infrastructure company that allows investors to participate in the resurgent volume growth of the Western Canadian Sedimentary Basin Well-Positioned for Strong Demand Solid Business Growth for our Services Platform 3
Slide 4: Businesses at a Glance
BUSINESSES AT A GLANCE Oil Sands & Heavy Oil TSX: PPL│NYSE: PBA 1,650 km of pipelines with 880 mbpd of contracted capacity Common shares outstanding(1) 337 million TSX common share trading price(1) $41.76 Gas Services TSX 52-week trading range(1) $33.73 - $53.04 368 MMcf/d net natural gas processing
Slide 5: Ideally Located Assets
IDEALLY LOCATED ASSETS • Integrated system of pipelines transport hydrocarbon liquids produced in western Canada: • conventional and synthetic crude oil, • heavy oil and oil sands products, • condensate (diluent) • natural gas liquids • Gas gathering and processing facilities • Oil and natural gas l
Slide 6: Assets and Major Plays
ASSETS AND MAJOR PLAYS ALBERTA ATHABASCA OIL SANDS MONTNEY SEAL PELICANLAKE SWAN HILLS Gas Processing Plant Redwater Fractionator Midstream Storage Facility DEEP BASIN Truck Terminal Rail Terminal Pembina Conventional Pipelines Pembina Oil Sands/Heavy Oil Pipelines DUVERNAY SEEP pipeline CARDIUM BAK
Slide 7: Customer Focused Value Chain
CUSTOMER FOCUSED VALUE CHAIN Conventional Gas Services Pipelines Midstream Mainline Extraction Gas/HVP Value Chain: • Gathering and processing • Transportation on Conventional Pipelines Gathering, • Fractionation at Production Processing, HVP Feeder Redwater Consumption Field Pipelines Terminalling
Slide 8: Strong Financial Performance
STRONG FINANCIAL PERFORMANCE 10 21 % CAGR % CAGR in ACFPS in operating margin 2004 – 2013 2004 – 2013 $2.50 $1,000 $900 Adjusted Cash Flow Per Share $2.00 $800 $700 $1.50 $600 ($ millions) $500 $1.00 $400 $300 $0.50 $200 $100 - - 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 ACFPS Operating Marg
Slide 9: 2015 Capital Spending Plan
2015 CAPITAL SPENDING PLAN 2,000 <1% 3% $1.9 billion 4% 12% Total 2015 planned Capex = 1,500 • 36% higher than 2014 and largest in 22% Pembina’s history • ~65% directed towards NGL-related value ($ millions) 1,000 chain activities • ~35% directed towards crude oil and 500 58% condensate-related valu
Slide 10: Fee-for-Service Cash Flows
FEE-FOR-SERVICE CASH FLOWS 8% 9% 13% 20% 71% 80% 2015 2018 Fee-for-Service / Cost-of-Service Product Margin Frac Spread Operating margin from fee-for-service/cost-of-service is expected to increase to ~80% by 2018 See "Forward-Looking Statements & Information" and " Non-GAAP & Additional GAAP Measur
Slide 11: Fee-for-Service Projects
FEE-FOR-SERVICE PROJECTS Capital Red indicates projects under construction Projects (all fee-for-service) In-Service (C$MM) or development (not including SEEP & Conventional Pipelines Potential West Coast Propane Terminal) Phase II Expansions* $ 695 2015 TAYLOR Phase III Pipeline Expansions* $ 2,400
Slide 12: Business Overview
BUSINESS OVERVIEW PEMBINNY
Slide 13: Conventional Pipelines
CONVENTIONAL PIPELINES • Operational excellence ALBERTA • 99% reliable FORT ST JOHN TAYLOR DUNVEGAN FORT MCMURRAY • Proximal to prolific geology • Q3 2014 throughput: 564 VALLEYVIEW mbpd (~15% increase from Q3 GRANDE PRAIRIE SWAN HILLS 2013) • 2013 YTD throughput: 563 WHITECOURT FORT SASKATCHEWAN mb
Slide 14: Solid Business Platform
SOLID BUSINESS PLATFORM • 100% of revenue is fee-for-service • No direct commodity exposure • Expansions underpinned by long-term contracts • Established infrastructure captures incremental production from major resources plays • Diversification in geology and geography • Tightening pipeline capacit
Slide 15: Growing Throughput
GROWING THROUGHPUT • Solid industry performance combined with strategically located assets has led to strength in Pembina's throughput profile 563 mbpd 492 mbpd 456 mbpd 414 mbpd 500 393 mbpd 374 mbpd 400 (mbpd) 300 200 100 - Crude & Condensate NGL Capacity expansions of ~530,000 bpd underway See “F
Slide 16: Our Expansions Could Bring Capacity to ~1.5 Million bpd
OUR EXPANSIONS COULD BRING 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 Phase III (in-service) (late 2014 to mid (late 2016 to mid Capacity) (combined 2015) 2017) system ca
Slide 17: Recently Upsized $2.44 Billion Phase III Expansion
RECENTLY UPSIZED $2.44 BILLION PHASE III EXPANSION ALBERTA • Secured additional commitments to FT. ST. JOHN upsize expansion to include a new TAYLOR GORDONDALE 16" pipeline from Fox Creek into Namao and a new 12" pipeline from DAWSON CREEK VALLEYVIEW Wapiti into Kakwa for a capital LAGLACE GRANDE ex
Slide 18: NEBC Montney Expansion
NEBC MONTNEY EXPANSION BRITISH COLUMBIA Proposed Expansion Area • $210 MM expansion, Pembina Blueberry System underpinned by long-term, Pembina's Other Pipelines Major Highways cost-of-service agreement with anchor shipper • 160 kilometres of up to 12- inch diametre pipeline • Base capacity of up to
Slide 19: New Pipeline Acquisition in the North Dakota Bakken
NEW PIPELINE ACQUISTION IN THE NORTH DAKOTA BAKKEN • Acquired the Vantage HVP pipeline system for USD $650 million, including associated EDMONTON Fort Saskatchewan assets1 Petrochemical Complex • Pipeline originates in Tioga, North Dakota and terminates Joffre Petrochemical Complex near Empress, Alb
Slide 20: Oil Sands & Heavy Oil
OIL SANDS & HEAVY OIL Syncrude Pipeline Horizon Pipeline • Operational excellence Cheecham Lateral Nipisi Pipeline • 99+% reliable over Mitsue Pipeline Peace Pipeline operating history • Diverse connectivity to various industry hubs for crude oil and condensate • Superior relationships with aborigin
Slide 21: Solid Business Platform
SOLID BUSINESS PLATFORM PIPELINE SYSTEM SYNCRUDE HORIZON CHEECHAM NIPISI & MITSUE Contracted Capacity 389,000 250,0001 136,000 127,000 (bpd) Contract Type Cost-of-Service Fixed Return Fixed Return Fixed Return Initial Term 25+ years 25+ years 25+ years 10+ years Shippers Syncrude Partnership: CNRL C
Slide 22: Gas Services
GAS SERVICES • Operational excellence Gas Processing Plant Redwater Fractionator • 96% reliable PEACE PIPELINE Pembina Conventional MUSREAU GAS Pipelines • Regional wells contain total PLANT & DEEP CUT Pembina Gas Services Pipelines NGL of 75 -100 bbls/MMcf CUTBANK GAS PLANT • Q3 2014 average proces
Slide 23: Solid Business Platform
SOLID BUSINESS PLATFORM • Strategically positioned infrastructure in active and emerging NGL rich plays • Provide gas gathering, compression and shallow/deep cut processing services • 100% fee-for-service revenue (no direct commodity exposure) • Underpinned by long-term contracts – 75% of 2013 reven
Slide 24: New Gas Plant: Musreau III
NEW GAS PLANT: MUSREAU III • Planning to construct a new 100 MMcf/d shallow cut facility ("MS III") with liquids capacity of ~3,000 bpd • Expected capital cost of $105 million • MS III will leverage engineering and design work from our existing Musreau and nearly complete Musreau II facilities and w
Slide 25: New Gas Plant Acquisition
NEW GAS PLANT ACQUISITION CANADA • Acquired the in-development Saskatchewan Ethane Extraction Plant ("SEEP") as part of Vantage acquisition Viewfield Plant • Expected additional capital cost WEYBURN of ~$100 million to complete the Viewfield Gas 60 MMcf/d deep cut plant and Gathering System associat
Slide 26: Resthaven Expansion
RESTHAVEN EXPANSION • Expanding the Resthaven facility by an incremental 100 MMcf/d, bringing total plant capacity to 300 MMcf/d1 • Constructing a 28 km 12" gathering pipeline to deliver gas into facility • Expected additional capital cost of ~$105 million2 to complete the plant expansion and ~$65 m
Slide 27: Expanding to Meet Customer Demand
EXPANDING TO MEET CUSTOMER DEMAND 1,600 80,000 1,463 MMcf/d 1,400 100 70,000 100 100 1,200 200 60,000 200 Bpd (NGL and C5 Output) 60 60 60 60 1,000 50,000 100 MMcf/d 130 800 40,000 200 600 30,000 50 Additional 61% of contracted 400 205 growth by mid-2016 20,000 200 10,000 318 – – Cutbank Musreau Sha
Slide 28: NGL Midstream
NGL MIDSTREAM Map for illustrative Redwater West: purposes only. Gas Processing Plant • 73 mbpd NGL fractionator and 7.8 mmbbls Redwater Fractionator of finished product cavern storage Midstream Storage Facility Truck Terminal • Industry-leading rail-based terminal (largest Rail Terminal NGL rail ya
Slide 29: Natural Gas Liquids – Fractionation Growth
NATURAL GAS LIQUIDS – FRACTIONATION GROWTH 300 RFS II: ~250 mbpd • New $415 million 73 mbpd C2+ fractionator 250 • Committed take-or-pay revenue streams for 10-year term from in-service date, for 55 97% of the operating capacity 200 9 • Expected on-stream date in Q4 2015 • Ethane produced at RFS II
Slide 30: Propane Export Terminal Process
PROPANE EXPORT TERMINAL PROCESS Existing NGL Value Chain Western Canada Marine Terminal Propane export project would extend Pembina's NGL value chain participation 30
Slide 31: New Potential West Coast Propane Terminal
NEW POTENTIAL WEST COAST PROPANE TERMINAL • Signed terminal agreement with the Port of Portland, Oregon to advance a propane export terminal • Initially will plan to develop a 37,000 bpd propane export facility for expected capital of USD $500 million • Terminal will provide growing Proposed Western
Slide 32: Storage Potential
STORAGE POTENTIAL NGL SALT CAVERN STORAGE POTENTIAL ABOVE GROUND STORAGE POTENTIAL 2,000 40 Cavern development: ~38 MM bbls ~1.8 mmbbls • At Redwater, 13 1,800 35 caverns in-service and 5 in 1,600 development 30 600 • Significant demand 1,400 in west and east millions of barrels thousands of barrels
Slide 33: Crude Oil Midstream
CRUDE OIL MIDSTREAM • Develop and provide ALBERTA terminal, hub & storage services to support the energy industry FORT • 630,000 barrels of TAYLOR MCMURRAY above ground crude oil and condensate storage capacity, with 540,000 under PRINCE GEORGE FORT SASKATCHEWAN construction EDMONTON • Expansion pot
Slide 34: Solid Business Platform
SOLID BUSINESS PLATFORM • Revenue generated from multiple service offerings • Liquids capture and terminaling support growth for other Pembina businesses • Interconnectivity increases options for customers • Access to 5 diluent streams through PNT and growing • Increasing fee-for-service revenue thr
Slide 35: Pembina Nexus Terminal
PEMBINA NEXUS TERMINAL 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 Difficult to replicate our
Slide 36: Canadian Diluent Hub (CDH)
CANADIAN DILUENT HUB (CDH) NEW MARKET HUB FOR CONDENSATE/DILUENTS Pembina proposed pipelines and connections Pembina existing pipelines and connections Existing connections Proposed third party connections • $350 million capital spend; in-service in 2016/2017 subject to regulatory and environmental
Slide 37: Strong Financial Platform
STRONG FINANCIAL PLATFORM PEMBINNY
Slide 38: Liquidity & Access to Capital
LIQUIDITY & ACCESS TO CAPITAL Access capital at attractive rates • DRIP(1) currently raising ~$26 million per month Capital Structure(2) • $1.5 billion credit facility: currently completely undrawn 4% • $900 million of preferred shares raised (in 2013 and 2014) 20% • $600 million 30-year notes at 4.
Slide 39: Debt Metrics
DEBT METRICS Total Debt to EBITDA Funds from Operations / Total Debt 5.0x 35% 30% 4.0x 25% 3.0x 20% 2.0x 15% 10% 1.0x 5% 0.0x - 1 2010 2011 2012 2013 2010 2011 2012 1 2013 Total Debt / EBITDA Funds from Operations / Total Debt Total Debt / Total Book Capitalization Total Debt / Total Enterprise Valu
Slide 40: Clean Balance Sheet
CLEAN BALANCE SHEET A- 9.0x 8.0x BBB 7.0x BBB+ Baa2 Total Debt / TTM EBITDA* 6.0x BBB 5.0x Baa2 4.0x Ba2 3.0x NR BBB 2.0x 1.0x 0.0x Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Pembina continues to employ significantly less leverage than its peers * As of Q3 2014 Source: Company filings (
Slide 41: Summary
SUMMARY PEMBINNY
Slide 42: Summary
SUMMARY Strategically located and well-established Highly contracted and stable cash flow infrastructure Fee-for-service focused capital program Extensive asset footprint with high barriers to entry Strong growth portfolio Assets service long-life, economic $1.9 billion capital spending plan
Slide 43: Going the Distance
GOING THE DISTANCE BOB MICHALESKI Chief Executive Officer MICK DILGER President & Chief Executive Officer MICK DILGER President & Chief Operating Officer PETER ROBERTSON Senior Vice President, Chief Financial Officer PETER ROBERTSON Vice President, Finance & Chief Financial Officer SCOTT BURROWS Vic
Slide 44: Non-GAAP and Additional GAAP Measures
NON-GAAP AND ADDITIONAL GAAP MEASURES This presentation uses certain terms that are not defined by GAAP but are used by management of Pembina to evaluate Pembina's performance. Non-GAAP and additional GAAP financial measures do not have a standardized meaning prescribed by GAAP and are therefore unl