Pembina Pipeline Corporation · TSX:PPL
Pembina Pipeline — Investor Day (April 2016)
117 slides from Pembina Pipeline's investor day presentation, Apr 11, 2016
Slide 1: Investor Day April 11, 2016
TSX: PPL; NYSE: PBA April 11, 2016 1
Slide 2: Our team presenting today
Our team presenting today Agenda Presenter Time (approx.) Introduction + Strategic Overview Mick Dilger Mick Dilger President & Chief Executive Officer Challenges & Panel 8:30 am – 9:30 am Opportunities Discussion Market Dynamics Scott Burrows Scott Burrows Vice President, Finance & Chief Financial
Slide 3: Forward-looking statements and information
Forward-looking statements and 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 and derivatives services. Undue rel
Slide 4: Introduction + Strategic Overview
Introduction + Strategic Overview Mick Dilger
Slide 5: Pembina remains well positioned in a rapidly changing world
Pembina remains well positioned in a rapidly changing world Investment highlights Integrated, strategic and difficult to replicate asset base largely supported by long-term, fee-for-service contracts Industry leading record of safe, on-time and on-budget, large-scale operations and project execu
Slide 6: Pembina's vision
Pembina’s vision For our stakeholders to view us as being the leader in the Canadian energy infrastructure sector Our "Stand": 1. Ensure no harm to people or the environment 2. We are the "first choice" by customers to cost effectively and reliably connect them to markets 3. We provide sustainable i
Slide 7: We remain confident in our strategy
We remain confident in our strategy Financial Objective (Stand-Item #3) We provide sustainable industry-leading returns to our shareholders Strategy: Preserve value by providing safe, cost-effective, reliable services Diversify our asset base along the hydrocarbon value chain to provide integrated s
Slide 8: Pembina's 'guard rails' through 2018
Pembina’s 'guard rails' through 2018 Overview Current Positioning Maintain target of 80% fee-for-service contribution to 1 On-track for 80% - 85% fee-for-service EBITDA EBITDA Financial metrics remain within BBB range with both 2 Maintain 'strong' BBB credit rating agencies recently confirming Pembi
Slide 9: Pembina's strategic investment criteria
Pembina’s strategic investment criteria 1 6 Mitigate risk even if the results have modest returns Integration with the existing value chain Longevity (capture long-life economic hydrocarbon 2 7 Maintain or enhance customer profitability reserves) 3 Ensure competitive advantage 8 Manage foreseeable r
Slide 10: Actionable short-term and longer-term strategies
Actionable short-term and longer-term strategies All are subject to Pembina’s Guard Rails and Strategic Investment Criteria Short-term strategy Longer-term strategy Execute Target: cost savings of 5 percent on $5 Deploy Target projects/platforms with billion up to $250 million of significant ongoi
Slide 11: A proven history of strategic expansions along the value chain
A proven history of strategic expansions along the value chain Pembina’s operating margin ($MM) Expansion / exploitation of asset base 1 Expansion into crude oil midstream operations Gas services creation value chain extension $1,200 2 5 (attract liquids to conventional pipelines) 4 $1,000 Provide
Slide 12: Our strategy continues to work well
Our strategy continues to work well Volumes continue to increase… As does financial performance 2,000 $1,150 $1,118 1,789 Operating Margin ($MM) 1,800 1,720 $1,100 $1,078 1,660 $1,050 1,600 $1,000 1,400 $949 $950 1,200 $900 1,000 $850 2013 2014 2015 800 $2.55 $2.53 600 $2.50 Adjusted CFPS 400 $2.45
Slide 13: Challenges & Opportunities
Challenges & Opportunities Panel Discussion
Slide 14: How's Pembina's strategy holding up? Any changes required?
How’s Pembina’s strategy holding up? Any changes required? (Frequently asked questions over the past 12 months) 1 Are your customers profitable in this commodity pricing environment? 2 Are volumes on your pipeline systems / gas plants declining? 3 What is your direct exposure to volatility in commod
Slide 15: Our business operates in prolific geology
1 Our business operates in prolific geology ALBERTA SASKATCHEWAN OIL SANDS MONTNEY (Resource life ~185 years) (Resource Life TAYLOR ~140 years) FORT MCMURRAY PELICAN LAKE SWAN HILLS DEEP BASIN (Resource Life ~40 years) Fort Saskatchewan EDMONTON DUVERNAY (Resource Life CARDIUM ~500 years) (Resource
Slide 16: Customer considerations – development of the WCSB continues
1 Customer considerations development of the WCSB continues for key areas Illustrative WCSB geology Duvernay Montney 350 7.0 CAGR 150%+ CAGR ~20% 300 6.0 250 5.0 Mmcfe/d Bcfe/d 200 4.0 150 3.0 100 2.0 50 1.0 - - 2011 2012 2013 2014 2015 2016 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total P
Slide 17: Customer considerations – newly drilled or licensed wells in the WCSB
1 Customer considerations newly drilled or licensed wells in the WCSB Producers continue to drill cautiously and invest given supportive geology Source: GeoScout. Map illustrates newly spud or licensed wells from March 1, 2015 to January 1, 2016. 17
Slide 18: Customer considerations – cash costs of 'Pembina' plays
1 Customer considerations cash costs of 'Pembina' plays Indicative cash operating cost analysis by play type (Q4 2015) (C$/Boe)(1) Field costs (C$/Boe) Corporate costs (C$/Boe) $30.00 $28.02 Royalties Transportation Operating Costs G&A Net Interest Expense $25.00 $22.38 $21.36 $20.00 $18.96 $17.39
Slide 19: Customer considerations – cash costs of 'Pembina' customers
1 Customer considerations cash costs of 'Pembina' customers Illustrative cash costs vs. revenues at forward strip pricing by customer(1) $45.00 0% - 30% oil weighted 30% - 60% oil weighted 60%+ oil weighted $40.00 $35.00 $30.00 $25.00 $/Boe $20.00 $15.00 $10.00 $5.00 - AAV BIR TOU SRX BXE TET BNP
Slide 20: Customer considerations – driving capital efficiency
1 Customer considerations driving capital efficiency Gas weighted producers Oil weighted producers $16 ~66% capital efficiency improvement 9.0 $35 ~55% capital efficiency improvement 3.0 $14 $30 $12 8.5 $25 2.5 Capital Expenditure ($BB) Capital Expenditure ($BB) $10 Total Production (MMbpd) Total
Slide 21: Customer considerations – best wells in 2015, by area
1 Customer considerations best wells in 2015, by area Top 5 British Columbia Montney wells drilled in 2015 Top 5 Alberta Montney wells drilled in 2015 2,500 2,000 1,896 2,033 2,000 1,781 1,744 1,428 Calendar Rate (Boe/d) Calendar Rate (Boe/d) 1,630 1,619 1,500 1,242 1,237 1,198 1,500 1,000 1,000 5
Slide 22: Volume considerations – Pembina's systems volume history
2 Volume considerations Pembina’s systems volume history Conventional Pipelines physical volumes(1) Gas Services physical volumes(1,2) 700 1,000 Illustrative Resthaven Shutdown Impact 900 600 800 500 700 MMcf/d Mbpd 600 400 500 300 400 200 300 200 100 100 - - 2009 2010 2011 2012 2013 2014 2015 YTD
Slide 23: Commodity price considerations – impact of pricing downturn
3 Commodity price considerations impact of pricing downturn Sustained financial performance Long-term record of dividend growth Growing dividends and funding growth $1,200 $160 $2.00 $160 $900 $1.80 $800 $140 $140 $1,000 $1.60 $700 $120 $120 $1.40 $800 $600 $100 $100 $1.20 $US / Bbl $ / Share $500
Slide 24: Commodity price considerations – crude oil pricing impact on Crude Oil Midstream
3 Commodity price considerations crude oil pricing impact on Pembina’s Crude Oil Midstream business Historical WTI pricing vs. Crude Oil Midstream operating margin $120 $200 $114 $110 $111 $110 $107 $180 $160 $100 $140 $90 $87 $120 $US / Bbl $80 $C MM $78 $100 $76 $70 $61 $80 $60 $60 $50 $53 $40 $
Slide 25: Credit considerations – counterparty credit stats
4 Credit considerations counterparty credit stats 60 day credit exposure(1,3) Additional credit exposure considerations Non Investment Grade AAA 1% • Overall 60 day credit exposure: AA- to AA+ 21% 17% − 60% with investment grade counterparties and 19% with split rated(3) counterparties A- to A+ 10
Slide 26: Credit considerations – top 10 counterparty overview
4 Credit considerations top 10 counterparty overview Top 10 counterparty exposure out of total Top 10 counterparty exposure(1) Top 10 counterparty credit ratings(2) exposure(1) Counterparty Credit rating Counterparty #1 BBB- / Ba2 (split rated) Counterparty #2 BBB+ / Baa3 Counterparty #3 AAA / AA+
Slide 27: Execution considerations – track record of success (pre-2016)
5 Execution considerations track record of success (pre-2016) Capital Cost Project Date in-service Completed on-time Completed on-budget Safety metric(1) ($MM) Heavy Oil & Oil Sands Mitsue: ahead of schedule 1,100,000+ man hours & 8,400,000+ km travel Nipisi & Mitsue $400 August 2011 Under budget
Slide 28: Execution considerations – 2015 execution highlights
5 Execution considerations 2015 execution highlights • ~$1.3 billion of strategic, largely fee-for-service assets were placed in service in 2015 • Throughout 2015, Pembina commissioned numerous large-scale infrastructure projects across our business Phase II Expansion Saturn II • 108 mbpd expansio
Slide 29: Execution considerations – 2016 project updates
5 Execution considerations 2016 project updates Commissioning update Commercial / regulatory updates • Edmonton North Terminal expansion • Canadian Diluent Hub ("CDH") − 550 mbbls of additional storage capacity − Commercial agreements for in excess of 400 mbpd of take- − Project completed ahead of
Slide 30: Growth considerations – future opportunities
6 Growth considerations future opportunities • Super Majors + other well capitalized producers continue to commit significant capital to the Gas Services development of the Montney and Duvernay resources plays − Large-scale infrastructure solutions (gathering pipelines, processing, stabilization,
Slide 31: Growth considerations – M&A opportunities in all markets
6 Growth considerations M&A opportunities in all markets EV / operating margin multiple at acquisition Current EV / operating margin multiple 12.0x 11.6x 11.6x 11.3x 12.0x 10.0x 10.0x ~10x 10.0x 9.7x 9.8x 10.0x 9.2x 8.0x 8.0x 7.1x 6.8x 6.0x 6.0x 4.0x 4.0x 2.0x 2.0x 0.0x 0.0x (1) (2) (3) (4) Cutban
Slide 32: Funding considerations – access to capital remains strong
7 Funding considerations access to capital remains strong Financing considerations Total capital raised (2013 – YTD 2016) • ~$5.7 billion raised since 2013 (inclusive of DRIP $3.0 proceeds) Total capital raised ~$5.7 billion • ~$2.4 billion of common equity raised since 2013 $2.5 $2.4 − DRIP pro
Slide 33: Balance sheet considerations – peer comparison
8 Balance sheet considerations peer comparison 7.0x 6.0x 5.0x Debt / EBITDA (2016E) 4.0x 3.0x 2.0x 1.0x - BBB+ BBB BBB A- BBB+ A- A BBB BBB+ BBB BBB Ba2 NR Pembina continues to employ less leverage than its peers Source: RBC Capital Markets & Barclays (March 2016). Peers include AltaGas, Canadian
Slide 34: Phase III – project update
9 Phase III project update Phase III Expansion ALBERTA Phase III Expansions Phase III Expansion (under construction) • Capital investment of $2.44 billion (tracking under Completed Phase III Expansion segment budget) Pembina crude oil and condensate pipelines • Initial capacity of 420 mbpd between
Slide 35: Market Dynamics
Market Dynamics Scott Burrows
Slide 36: Volatility remains the key theme in commodity markets
Volatility remains the key theme in commodity markets Historical crude oil pricing Historical natural gas pricing Historical indicative fractionation spread(1) $120 $6.00 $60 $100 $5.00 $50 $80 $4.00 $40 $US / Bbl $US / Bbl $C / Gj $60 $3.00 $30 $40 $2.00 $20 $20 $1.00 $10 - - - 2010 2011 2012 2013
Slide 37: The worst might be over for North American propane markets
The worst might be over for North American propane markets Propane inventories + pricing US propane production (mbpd) US propane exports vs. capacity 1,600 120 US $1.60 1,400 100 $1.40 1,400 $1.20 80 1,200 $1.00 US$/Gal mmbbls 60 $0.80 1,200 $0.60 1,000 40 $0.40 20 $0.20 1,000 800 mbpd - - mbpd 2012
Slide 38: Condensate market dynamics
Condensate market dynamics Western Canada condensate supply and demand(1) Pembina’s Canadian Diluent Hub 700 Reduction Due to Rail Forecast Demand (Bitumen Blending) 600 Supply - Base Case (WCSB Production) Supply - High Case (WCSB Production) 500 NWR Sturgeon Refinery 400 mbpd Current imports >200
Slide 39: Time-lapse Video of RFS II Construction
Time-lapse Video of RFS II Construction
Slide 40: Break (15 mins)
Break (15 mins)
Slide 41: Crude Oil Value Chain
Crude Oil Value Chain Paul Murphy
Slide 42: Crude oil value chain – Pembina's integrated service offering
Crude oil value chain – Pembina's integrated service offering Production Consumption Conventional & Oil Midstream Sands Pipelines Midstream Production Field Terminalling &Treatment LVP Feeder Terminalling Logistics & Spec Products Pipelines & Marketing Distribution Refining Consumption Logistics & D
Slide 43: Conventional Pipelines – update (2014 – 2016)
Conventional Pipelines – update (2014 – 2016) Operating / financial overview 2015 highlights + 2016 outlook Revenue volumes (mbpd) 2015 Highlights 614 620 Y-o-Y increase → 7% • Record annual revenue volumes (614 mbpd) + operating margin ($401 MM) 600 95% of 580 575 2015 • Another year of safe and re
Slide 44: Conventional Pipeline expansions could bring Alberta capacity to ~1.5 million bpd
Conventional Pipeline expansions could bring Alberta capacity to ~1.5 million bpd 1,600 ~1,500 mbpd 1,400 260 1,200 420 Achievable through 1,000 modest investment in additional pump stations Mbpd 800 55 53 45 52 600 175 400 200 453 - Pre Expansion (2010) Phase I (In-Service) Phase II (In-Service) Ph
Slide 45: Our Conventional Pipeline revenue volumes continue to grow
Our Conventional Pipeline revenue volumes continue to grow • Solid industry performance and strategically located assets have led to strength in Pembina's throughput profile ~650 700 mbpd 614 mbpd 575 mbpd 600 492 mbpd 456 mbpd 500 417 mbpd 374 mbpd 400 Mbpd 300 200 100 - Q1-10 Q2-10 Q3-10 Q4-10 Q1-
Slide 46: Strategic pipeline lateral program
Strategic pipeline lateral program NEBC Expansion estimated late 2017 in-service ALBERTA • 150 km, up to 12" HVP/LVP batched pipeline, underpinned by long-term, cost-of-service agreement • Base capacity of up to 75 mbpd Taylor Altares Lateral estimated late 2017 in-service • 64 km, 6" pipeline l
Slide 47: Oil Sands & Heavy Oil – update (2014 – 2016)
Oil Sands & Heavy Oil – update (2014 – 2016) Operating / financial overview 2015 highlights + 2016 outlook Contracted capacity (mbpd) 2015 Highlights 1,000 800 880 880 • Contracted capacity (880 mbpd) + operating margin ($139 MM) remains steady 600 • Another year of safe and >99%+ reliable operation
Slide 48: Crude Oil Midstream – update (2014 – 2016)
Crude Oil Midstream – update (2014 – 2016) Operating / financial overview 2015 highlights + 2016 outlook Operating margin ($MM) 2015 Highlights $60 ~101% of 2015 Budget $125 • Operating margin ($170 MM) remains relatively strong despite low commodity $100 prices $US / Bbl $40 $C MM $75 $50 • Another
Slide 49: Our Midstream assets are well-positioned and interconnected
Our Midstream assets are well-positioned and interconnected Synthetic Redwater Synthetic Diluent Oil Sands Diluent Pipelines Crude Namao Canadian Diluent Hub Local Refineries Export Crude Pipelines Edmonton Diluent Pool Potential connections Current / under development Heavy Crude connections Edmont
Slide 50: Midstream assets are positioned to create significant optionality
Midstream assets are positioned to create significant optionality PNT-H (Canadian Redwater Diluent Hub Complex PNT-N (Namao) PNT-E (Edmonton North Terminal) Pembina Crude Oil Pipelines Pipeline Pembina NGL Pipelines Cloverbar Alley Hub Strategically located, difficult to replicate, and integrated as
Slide 51: Major development project update (LVP)
Major development project update (LVP) Expected Tracking Tracking Regulatory Approval Project Status In-Service On Time? On Budget? Midstream Canadian Diluent Hub Yes Under Development Mid 2017 On Time Optimized Scope Construction Complete & Terminal and Hub Services Yes Early 2016 Ahead of Schedule
Slide 52: NGL Value Chain Overview
NGL Value Chain Overview Stu Taylor
Slide 53: Gas Services – update (2014 – 2016)
Gas Services – update (2014 – 2016) Operating / financial overview 2015 highlights + 2016 outlook Revenue volumes (mmcf/d) 2015 Highlights 800 Y-o-Y increase → 27% 656 • Record annual revenue volumes (656 mmcf/d) + operating margin ($144 MM) + 600 515 93% of another year of safe operations across al
Slide 54: Expanding to meet customer demand
Expanding to meet customer demand Gas Services secured growth projects Total gas processing capacity (bcf/d) 2,000 1.8 140 4.5 1,800 1,600 ~470% Increase in capacity by H2 2017 100 100 Bcf/d 120 4.5 5.0 Bcf/d 100 4.0 1,400 100 250 3.5 2.4 Mbpd (NGL & C5) 1,200 200 80 3.0 MMcf/d 60 1,000 100 60 2.5 1
Slide 55: Paramount Kakwa acquisition – top tier geology
Paramount Kakwa acquisition top tier geology Overview Additional resource considerations • The Alberta Montney is one of fastest • Cretaceous land base resource growing areas within the WCSB potential of 11 Tcf of gas + liquids Cretaceous − Supported by strong condensate yields • Potential ultimat
Slide 56: Paramount Kakwa acquisition
Paramount Kakwa acquisition (Newest member of the Cutbank Complex) Acquisition overview Illustrative regional map • Pembina entered into an agreement to acquire Paramount’s Musreau gas processing infrastructure for $556 MM − Transaction is expected to close in the second quarter of 2016 • Assets are
Slide 57: NGL Midstream – update (2014 – 2016)
NGL Midstream – update (2014 – 2016) Operating / financial overview 2015 highlights + 2016 outlook NGL sales volumes (mboe/d) 2015 Highlights 130 Y-o-Y change → -3% • Another year of safe, reliable operations across all facilities 119 120 97% of 2015 116 • Announced $180 MM terminalling project for
Slide 58: Significantly growing our NGL fractionation capacity
Significantly growing our NGL fractionation capacity 300 ~248 250 mbpd 18 200 55 mbpd 150 73 100 9 8 50 85 - Sarnia & RFS I RFS Debottleneck RFS C3+ Debottleneck RFS II RFS III RFS III De-ethanizer Total (Q1 2016) (Q1 2016) (Q3 2017) (TBD) In-Service Project Under Development Uncommitted Projects Tr
Slide 59: Significant growth in NGL storage capacity
Significant growth in NGL storage capacity Finished product storage capacity Operational storage capacity 9.0 8.3 4.0 3.5 mmbbls 0.5 3.5 mmbbls 8.0 0.5 7.0 0.6 3.0 6.0 5.1 1.7 2.5 1.6 5.0 mmbbls 2.0 4.0 1.4 0.5 1.5 mmbbls 3.0 2.0 ~60% Increase by 2017 1.0 ~150% Increase by 2017 0.5 1.0 - - At Acquis
Slide 60: Over $1 billion in capital projects at Redwater
Over $1 billion in capital projects at Redwater Rail Loading RFS I RFS II RFS III Operating & Under Construction Operating In service Under Construction Expanding facility to handle 250+ cars per 73,000 bpd C2+ fractionator ~$415 million 73,000 bpd ~$400 million 55,000 bpd day. Ability to load crude
Slide 61: Major development project update (NGL)
Major development project update (NGL) Expected Tracking Tracking Regulatory Approval Project Status In-Service On Time? On Budget? Resthaven Expansion Yes In-Service Mid 2016 On Time Under Budget Services Gas Musreau III Yes Commissioning Mid 2016 Ahead of Schedule Under Budget Duvernay I Plant (P/
Slide 62: NGL value chain – Pembina's integrated service offering
NGL value chain – Pembina's integrated service offering Downstream Production Consumption Conventional Gas Services Pipelines Midstream Propane Dehydrogenation & Propylene Production Propane Gathering, Export Mainline Terminalling Logistics Production Processing, HVP Feeder Fractionation Consumption
Slide 63: Value Chain Extension
Value Chain Extension Stu Taylor
Slide 64: Alberta feedstock advantage creates 'value add' opportunities
Alberta feedstock advantage creates 'value add' opportunities Feedstock Supporting assets Value add opportunity End use / value added product Natural Gas (C1) Gas processing Gas-to-Liquids Conversion Gasoline, Diesel, Methanol ~4.5 Bcf/d by H2 2017(1) Polyethylene most globally used polymer (pla
Slide 65: Doing more with the molecule – propane market dynamics
Doing more with the molecule propane market dynamics Illustrative WCSB propane supply & demand(1) Additional market considerations • The revolution in unconventional drilling and liquids 200 WCSB Propane Supply Range production has created a paradigm shift in Pembina’s operating regions • Pembina’
Slide 66: Doing more with the molecule – LPG export terminal
Doing more with the molecule LPG export terminal LPG export terminal opportunity Shortest route to NE Asia from North America West Coast Pembina value chain extension opportunity • Global opportunity − Growing North American production and robust Asian demand Existing NGL • Decrease of traditional
Slide 67: Doing more with the molecules – uses of polypropylene
Doing more with the molecules uses of polypropylene Polypropylene (PP) pellet type & selected end use Canadian PP Demand(1) 700 600 Volume ('000 Metric Tons) 500 400 300 200 PP Conversion 100 - Canadian PP Imports(1) West SE Asia Europe Canada imports 0.2% 0.2% essentially 100% of its PP demand fr
Slide 68: Doing more with the molecules – polypropylene market
Doing more with the molecule polypropylene market? Polypropylene (PP) overview World plastic demand by polymer (2015)(1) • PP is a downstream petrochemical product derived from the olefin monomer, PE derivatives propylene PP 224 mmta account for a • PP has many desirable properties including high
Slide 69: Kuwait Petroleum Corporation Qualifications
Kuwait Petroleum Corporation Qualifications Subsidiary Petrochemical Industries Companies (“PIC”) has agreed to a Joint Feasibility study with Pembina (Announced April 2016) PDH Experience • PIC has 25% stake in SK Gas’ 600kTa PDH in Ulsan, South Korea • PIC operates an existing 150kTa PP plant
Slide 70: Strategic project location
Strategic project location Rail access Proximate to major pipelines Zoned heavy industry Salt cavern storage rights Lands available for world-scale development Pembina has secured an ideal site for potential PDH + PP development in Alberta’s Industrial Heartland See "Forward-look
Slide 71: PDH considerations – 'Investment Criteria' / 'Guard Rails'
PDH considerations 'Investment Criteria' / 'Guard Rails' • Pursue fixed price / turn-key EPC solutions to limit capital cost exposure / risks • Evaluate project finance maintain a strong balance sheet and a strong investment grade credit rating Capital expenditure • Well positioned for a portion
Slide 72: Track record of value chain investment & extension
Track record of value chain investment & extension Initial Extension Follow -on Pembina’s Integrated NGL Value Chain Growth Results Investment Investment Pembina system • Pipeline capacity now over 1,000,000 bpd 1954 - constructed to bring • Largest NGL feeder system in WCSB product from Drayton $3
Slide 73: Capital Program
Capital Program Scott Burrows
Slide 74: Pembina's secured capital program progression
Pembina’s secured capital program progression Capital Revised Capital Paramount Program Program Acquisition ~$5.3 BB of (~$5.0 BB) assets to go into service ~$5.0 BB of Altares Lateral ($70 ~$2.9 BB left Aggregate revised assets MM) to spend investment of Capex Press to go into through 2017 $591 MM(
Slide 75: We are pursuing a fee-for-service growth portfolio
We are pursuing a fee-for-service growth portfolio Relative Growth Project Portfolio S e c ure d G rowth P roje c ts In- S e rvic e Ca pita l Cost ($ MM) Phase III Pipeline Expansions (1) Mid 2017 $2,440 30% 28% NEBC Expansion (1) Late 2017 $220 Vantage Expansion Late 2016 $85 Pembina has the larges
Slide 76: Project timelines & in-service dates
Project timelines & in-service dates Committed capital expected in-service date(1) Expected project timelines(1) SEEP ~$1.2 $4.0 billion of capital expected to be put into service in 2016 Saturn II $3.5 Phase II Expansion In-service Terminal & Hub Services $3.0 RFS II Resthaven Expansion Entering in
Slide 77: $600 - $950 million incremental EBITDA
$2,000 Summary of individual project contributions Phase III Laterals $600 - $950 million RFS III Fractionator RFS II Fractionator of potential incremental annual run-rate EBITDA $1,500 Canadian Diluent Hub once Pembina’s committed projects are all in- service(1) ~15% - ~25% Vantage Expansion compou
Slide 78: We are committed to a low-risk business platform
We are committed to a low-risk business platform Summary of operating margin by type ($MM)(1) $2 ~1% $2 ~15% $2 ~1% Total fee- ~12% based = $1 ~17% ~2% 84% Total fee- $1 ~17% ~15% ~1% based = 82% $1 ~14% Total fee- ~22% ~17% based = 81% $1 ~20% Total fee- based = ~33% ~72% $1 Total fee- 77% based =
Slide 79: Strong Financial Platform
Strong Financial Platform Scott Burrows
Slide 80: 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 81: Debt metrics
Debt metrics Total Debt / EBITDA Funds from Operations / Total Debt 5.0x 30% 4.0x 20% 3.0x % x 2.0x 10% 1.0x - - (1) (1) 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Total Debt / Total Book Capitalization Interest Coverage 80% 10.0x 8.0x 60% 6.0x % 40% x 4.0x 20% 2.0x - - (1) 2011 2012 2013 201
Slide 82: Historical balance sheet review
Historical balance sheet review Historical debt / trailing twelve month ("TTM") EBITDA and. capital expenditures 4.5x $600 4.0x $500 3.5x 3.0x $400 Debt / TTM EBITDA (x) 2.5x $MM $300 2.0x 1.5x $200 1.0x $100 0.5x - - Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3
Slide 83: Long-dated debt maturity profile
Long-dated debt maturity profile Pembina debt maturity profile • Pembina’s debt portfolio is more conservative $700 Senior Debt Convertible Debentures than its peer group: $600 − Weighted average maturity of ~14 years $500 $400 vs. peer group average of ~8 years $MM $300 − Weighted average coupon of
Slide 84: Funding plan and capital structure are equipped for growth
Funding plan and capital structure are equipped for growth Funding plan (2016 - 2017)(1) Capital structure (March 31, 2016) $4.0 ~$3.5 BB (2016 – 2017) $3.5 Paramount (2) Paramount (2) 28% Paramount Equity Financing Equity Financing (2) Acquisition $3.0 DRIP DRIP Preferred $2.5 Cash Flow (Net Cash F
Slide 85: Sensitivities (2016 EBITDA C$MM)
Sensitivities (2016 EBITDA C$MM) Conventional Pipelines Key variable Uncontracted volumes Volume ± 10,000 bpd ±$9 Gas Services Key variable Uncontracted volumes Volume ± 10 mmcf/d ±$2 NGL Midstream(1,2) Key variables AECO ± $0.25 CAD/gj ± $10 Mont Belvieu Propane ± $0.10 US/usg ± $35 Edmonton Butane
Slide 86: Dividend growth supported by growing cash flow
Dividend growth supported by growing cash flow $3.00 $2.50 4.9% Dividend increase announced March 2016 $2.00 $ / Share $1.50 $1.00 $0.50 - 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Dividend per share Adjusted cash flow from operating activities per share Strong history of growing Pembina’s d
Slide 87: Conclusion
Conclusion Mick Dilger
Slide 88: We continue driving shareholder value
We continue driving shareholder value 330 % total shareholder return* *Jan 1, 2006- Apr 1, 2016, inclusive of dividends reinvested. 5.0 % CAGR in dividends per share* * 2006 - 2015 $4.1 billion in dividends paid since inception* * To December 2015, Pembina began paying dividends in 1997. 15 % averag
Slide 89: We produce exceptional performance
We produce exceptional performance Total return – Pembina vs. S&P/TSX 700 Relative Total Return (100 = January 1, 2006) 600 500 ~330% 400 300 200 ~60% 100 - 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 S&P/TSX Index Pembina has a long-term track record of strong share price performance Sou
Slide 90: Key take-away – we are doing the important things right
Key take-away we are doing the important things right • Strategically located and well-established infrastructure Extensive and diversified asset footprint with high barriers to entry, serving long-life, economic hydrocarbon reserves • Proven track record and experienced management team Histor
Slide 91: Pembina Pipeline Corporation
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 92: Non-GAAP, additional GAAP and other measures
Non-GAAP, additional GAAP and other measures This presentation uses certain terms that are excluding preferred share dividends and (physical throughput on Pembina’s systems). not defined by GAAP but are used by acquisition-related expenses), and the Management believes these non-GAAP and management
Slide 93: Business Overview
Business Overview
Slide 94: Pembina represents a unique investment opportunity
Pembina represents a unique investment opportunity Pure play energy infrastructure company that TSX: PPL│NYSE: PBA allows investors to participate in the oil and Common shares outstanding(1) 387 million natural gas liquids industry across Canada and North Dakota. We: TSX common share trading price(1
Slide 95: Pembina's assets and businesses at a glance
Pembina’s assets and businesses at a glance Midstream 155 mbpd of Redwater fractionation capacity; 20 truck terminals; 14.3 MMbbl storage; product marketing; 2.4 bcf/d extraction; Nexus Terminal hubs Gas Services(1) 468 MMcf/d shallow cut gas processing capacity; 899 MMcf/d deep cut gas processing c
Slide 96: Business Segment Overviews
Business Segment Overviews
Slide 97: Conventional Pipelines
Conventional Pipelines • Pipeline operational excellence: 97%+ reliable (2015) ALBERTA • Proximal to prolific geology FORT • Q4 2015 revenue volumes: 621 mbpd (~2% increase from Q4 2014) MCMURRAY DUNVEGAN TAYLOR • 2015 revenue volumes: 614 mbpd (~7% increase from 2014) FORT ST JOHN • Connected to re
Slide 98: Crude Oil Midstream
Crude Oil Midstream • Develop and provide terminal, hub & storage services to ALBERTA ALBERTA support the energy industry • Over 900 mbbls of above ground crude oil and FORT MCMURRAY condensate storage capacity + expansion potential of TAYLOR 1,500 – 2,000 mbbls • Access to approximately 1.2 mmbpd o
Slide 99: Oil Sands & Heavy Oil
Oil Sands & Heavy Oil Syncrude Pipeline • Operational excellence Horizon Pipeline Cheecham Lateral − 99+% reliable (2015) Nipisi Pipeline Mitsue Pipeline • Diverse connectivity to various industry hubs for crude oil and Peace Pipeline condensate • Contracts are long-life with high credit worthy coun
Slide 100: Gas Services
Gas Services • Operational excellence ALBERTA ‒ 97% reliable (2015) • Positioned in active and emerging NGL rich plays FORT • Provide gas gathering, compression and shallow/deep cut MCMURRAY processing services • 468 MMcf/d shallow cut and 899 MMcf/d deep cut gas processing capacity(1) CUTBANK COMPL
Slide 101: NGL Midstream
NGL Midstream Gas Processing Plant Fractionator Redwater West: Midstream Storage Facility Truck Terminal • 155 mbpd of NGL fractionation capacity and 7.8 mmbbls of Rail Terminal Pembina Pipelines finished product cavern storage Third Party Pipelines • Industry-leading rail-based terminal (largest NG
Slide 102: Major Development Project Updates
Major Development Project Updates
Slide 103: NEBC Montney Expansion
NEBC Montney Expansion Conventional Pipelines Proposed Expansion Area Project overview Construction update BRITISH COLUMBIA Altares Lateral Pembina Blueberry System • Large-scale pipeline expansion, Key Accomplishments in 2015 Pembina's Other Pipelines underpinned by long-term, cost-of-service • Com
Slide 104: Phase III
Phase III Conventional Pipelines Project overview Construction update • Largest expansion project in Pembina’s Key Accomplishments in 2015 history • Completed Kakwa to Simonette Pipeline and • 880 km total of new pipeline with four placed in service distinct lines from Fox Creek into • Began constru
Slide 105: Vantage Expansion
Vantage Expansion Conventional Pipelines Project overview Construction update Base System Key Accomplishments in 2015 • ~ 700 km ethane import pipeline • All NEB permits received originating in Tioga, North Dakota and • All land and project procurement complete terminating near Empress, Alberta • Co
Slide 106: Horizon Pipeline System Expansion
Horizon Pipeline System Expansion Oil Sands & Heavy Oil Project overview Construction update • Expanding the existing Horizon Pipeline Key Accomplishments in 2015 System to 250 mbpd at the request of the • Procured over 100% of long-lead anchor tenant CNRL(1) equipment on schedule • Expansion includ
Slide 107: Edmonton North Storage
Edmonton North Storage Midstream Project overview Construction update • Original storage on site ~300 mbbls Key Accomplishments in 2015 • Provides storage upstream of pipeline • Storage tanks fabrication completed alley • Facility civil/mechanical construction • Connected to Edmonton refiners and
Slide 108: Duvernay I
Duvernay I Gas Services Project overview Construction update • Development of a new 100 MMcf/d shallow Key Accomplishments in 2015 cut gas plant, with expected NGL extraction • Announced agreement to build, own and capacity of ~5,500(1) bpd operate Duvernay I facility • Facility will be located near
Slide 109: Musreau III
Musreau III Gas Services Project overview Construction update • Constructing a new 100 MMcf/d shallow Key Accomplishments in 2015 cut facility with expected NGL extraction • Completed all engineering and capacity of ~3,000(1) bpd procurement • Leverages engineering and design work • Graded site and
Slide 110: Resthaven Expansion
Resthaven Expansion Gas Services Project overview Construction update • Expanding the Resthaven facility by an Key Accomplishments in 2015 incremental 100 MMcf/d, bringing total • Completion of gas gathering pipeline plant capacity to 300 MMcf/d(1) • Engineering and procurement complete • Underpinne
Slide 111: RFS II
RFS II Midstream Project overview Construction update • New 73 mbpd C2+ fractionator Key Accomplishments in 2015 • Facility twins Pembina’s existing C2+ • Reached mechanical completion Redwater fractionator Key Activities in 2016 • RFS II is supported by essentially 100% • Commissioning of all utili
Slide 112: RFS III
RFS III Midstream Project overview Construction update • New 55 mbpd C3+ fractionator Key Accomplishments in 2015 • Underpinned by long-term take-or-pay • Completed all earthworks, piling and contracts with multiple producers foundations • Leverage design and engineering work • Received and erected
Slide 113: Terminalling Services for NWR Sturgeon Refinery
Terminalling Services for NWR Sturgeon Refinery Midstream Project overview Construction update • Provide terminalling services for Sturgeon Key Accomplishments in 2015 Refinery (North West Redwater • Announcement of project development Partnership) under a 30-year fixed return agreement and a 10-yea
Slide 114: Canadian Diluent Hub
Canadian Diluent Hub Midstream Project overview Construction update Canadian Diluent Hub • Large-scale diluent terminal designed to CDH I: Existing accommodate contracted diluent supply • Continued success in existing condensate Redwater from Pembina's integrated value chain PNT-N business associate
Slide 115: Commitment to Safe & Reliable Operations for our Stakeholders
Commitment to Safe & Reliable Operations for our Stakeholders
Slide 116: Our priority is focused on asset integrity, safety and reliability
Our priority is focused on asset integrity, safety and reliability Robust and continuous integrity management program Committed to safety (2015 track record) • Continue to evaluate all threats to our pipelines and facilities Employee recordable injury rates in 2015 Employee recordable vehicle incide
Slide 117: Working hard to support our key stakeholders
Working hard to support our key stakeholders Dedicated to supporting Pembina’s Committed to being a leader in Aboriginal Recognized for being a top employer & operating communities relations having strong leadership Pembina United Way Benchmarking (Top 10 Energy Companies) $2.5 1st 1st $2.0 1st $MM