Pembina Pipeline Corporation · TSX:PPL
Pembina Pipeline — Corporate Update (March 2017)
47 slides from Pembina Pipeline's corporate update, March 2017
Slide 1: Corporate Update
TSX: PPL; NYSE: PBA March 2017 Corporate Update
Slide 2: Forward-looking statements and information
Forward-looking statements and information This presentation is for information purposes only and is dividends, expansion and diversification opportunities, Analysis, and described in our public filings available in not This presentation is for information purposes only and expectations regarding fu
Slide 3: Pembina represents a unique investment opportunity
Pembina represents a unique investment opportunity TSX: PPL│NYSE: PBA Pure-play energy infrastructure company that allows investors to participate in the oil and Common shares outstanding(1) 399 million natural gas liquids industry across Canada. TSX common share trading price(1) $42.99 We: are we
Slide 4: Pembina's assets and businesses at a glance
Pembina's assets and businesses at a glance Midstream 155 mbpd of Redwater fractionation capacity; 14 crude oil truck terminals; ~15 MMbbls of finished product cavern storage; 2.1 bcf/d extraction; Nexus Terminal hubs Gas Services 618 MMcf/d shallow cut gas processing capacity; 1,099 MMcf/d deep cut
Slide 5: Key themes for the next twelve months
Key themes for the next twelve months 1 Commissioning ~$4 billion of new capital projects 2 Building on a strong track record of increasing value and decreasing risk 3 Working with a large and diverse base of resilient customers 4 Continuing financial strength and ability to access markets to fund g
Slide 6: Commissioning ~$4 billion of new capital projects
Commissioning ~$4 billion of new capital projects Horizontal direction drill to connect RFS with CDH – August 2016
Slide 7: Multi-billion dollar fee-for-service growth portfolio
Multi-billion dollar fee-for-service growth portfolio G rowth P roje c ts Comple te d in 2 0 16 2 0 17 + G rowth P roje c ts In- S e rvic e Ca pita l Cost ($ MM) In- S e rvic e Ca pita l Cost ($ MM) Vantage Expansion Late 2016 $75 Phase III Pipeline Expansions Mid 2017 $2,440 Laterals Various $105 N
Slide 8: ~$600 - ~$950 million of potential 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 comp
Slide 9: Our business operates in prolific geology
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 ~500 years) CARDIUM (Resource Li
Slide 10: 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 11: Phase III Construction
Phase III Construction PEMBINAN
Slide 12: Expanding our gas processing infrastructure
Expanding our gas processing infrastructure Total gas processing capacity (bcf/d) In-Service Project Under Development 4.2 4,500 Bcf/d 100 100 4,000 100 250 200 3,500 60 100 200 3,000 134 2,500 MMcf/d 2,000 2,088 1,500 1,000 325 500 50 205 Provident Acquisition 318 - Cutbank Musreau Deep Shallow cut
Slide 13: 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 14: Significant growth in hydrocarbon storage capacity
Significant growth in hydrocarbon storage capacity Hydrocarbon storage capacity (underground and above ground) 4.0 Redwater Underground Storage Capacity Above Ground Storage Capacity 13.2 mmbbls In-Service Project Under Development 0.5 0.6 2.0 0.3 1.6 0.0 1.5 0.6 8.0 6.5 1.7 mmbbls 6.0 4.0 2.0 - Pro
Slide 15: Building on a strong track record of increasing value and decreasing risk
Building on a strong track record of increasing value and decreasing risk Construction at RFS III – August 2016
Slide 16: Pembina's 'guard rails'
Pembina's 'guard rails' Overview Current Positioning Maintain target of 80% fee-for-service contribution to 1 Currently above 80% fee-for-service EBITDA EBITDA 2 Maintain 'strong' BBB credit rating Financial metrics remain within BBB range Target 75% credit exposure from investment grade and Current
Slide 17: 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 18: Dividend growth supported by growing cash flow
Dividend growth supported by growing cash flow $3.00 $2.50 $2.00 $ / Share $1.50 $1.00 $0.50 - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Dividend per share Adjusted cash flow from operating activities per share Strong history of growing Pembina's dividend and adjusted cash flow per
Slide 19: Working with a large and diverse base of resilient customers
Working with a large and diverse base of resilient customers ENT – Spring 2016
Slide 20: Credit considerations – counterparty credit stats
Credit considerations counterparty credit stats 60 day credit exposure(1,3) Additional credit exposure considerations Non Investment AA- to AA+ 20% • Overall 60 day credit exposure: Grade 22% − 63% with investment grade counterparties and 15% with split rated(3) counterparties A- to A+ 15% • Asses
Slide 21: Continued financial strength supported by solid funding plan
Continued financial strength supported by solid funding plan Construction at CDH – August 2016
Slide 22: Capital expenditure & financing objectives
Capital expenditure & financing objectives Historical capital expenditure Financing objectives 2014 2015 2016 Forecast 2017 Budget $3.0 2017 Capital Finance growth ~50 / 50 debt / equity over the Budget $1.9 BB long-term Maintain 'strong' BBB rating with conservative $2.0 balance sheet metrics
Slide 23: Leverage comparison
Leverage comparison 7.0x 6.0x 5.0x Debt / EBITDA (2017E) 4.0x 3.0x 2.0x 1.0x - BBB BBB+ A- A- BBB+ BBB BBB+ BBB A BBB+ BBB Ba2 NR Pembina continues to employ less leverage than its peers Source: CIBC World Markets, Barclays, Morgan Stanley (March 2017). Peers include AltaGas, Canadian Utilities, Eme
Slide 24: Positioning for long-term growth
Positioning for long-term growth Resthaven – Summer 2016
Slide 25: 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 1954 - constructed to bring • Largest NGL feeder system in WCSB product from Drayton $3 BB+ • Largest crude oil feeder pipeline sys
Slide 26: Doing more with the molecule
Doing more with the molecule Illustrative WCSB propane supply & demand(1) Additional market considerations 200 • Revolution in unconventional drilling and liquids production WCSB Propane Supply Range has created a paradigm shift in Pembina's operating regions • Pembina's critical mass of propane cre
Slide 27: PDH + PP Considerations
PDH + PP Considerations Polypropylene (PP) overview Polypropylene (PP) pellets + selected end uses • PP is a downstream petrochemical product derived from the olefin monomer, propylene • PP has many desirable properties including high stiffness, impact resistance, transparency, heat resistance and f
Slide 28: Building out a strategic platform for growth in the Duvernay
Building out a strategic platform for growth in the Duvernay Duvernay I Illustrative Duvernay Development Map(1) Additional Infrastructure • Fully contracted 100 MMcf/d shallow cut • Infrastructure development and gas plant (gross) leverages proven service agreement with Chevron Musreau II & III d
Slide 29: Proven M&A track record
Proven M&A track record 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 (1) (2) (3) (4) 0.0x (1) (2) 0.0x (3) Cutbank Edmonton North Provid
Slide 30: Summary
Summary
Slide 31: Key take-aways – we are doing the important things right
Key take-aways we are doing the important things right Strategically located infrastructure serving long-life economic hydrocarbon reserves Transformational 2017 ahead ~$4 billion of major projects to be completed Growing our highly contracted and stable cash flow currently over 80% of operati
Slide 32: Contact Us
CONTACT US Pembina Pipeline Corporation Suite 4000 – 585 8th Avenue S.W. Calgary, Alberta T2P 1G1 www.pembina.com investor-relations@pembina.com Toll free: 1.855.880.7404 Phone: 403.231.3156
Slide 33: Appendix
Appendix
Slide 34: Sensitivities (2017 EBITDA C$MM)
Sensitivities (2017 EBITDA C$MM) Conventional Pipelines Key variable Uncontracted volumes Volume ± 10,000 bpd ±$10 Gas Services Key variable Uncontracted volumes Volume ± 10 mmcf/d ±$2 NGL Midstream (1,2) Key variable AECO ± $0.25 CAD/gj ±$10 Mont Belvieu Propane ± $0.10 US/usg ±$40 Edmonton Butane
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Slide 36: Conventional Pipelines
Conventional Pipelines • Pipeline operational excellence: 98% reliable (2016) ALBERTA • Proximal to prolific geology FORT • Q4 2016 revenue volumes: 639 mbpd (~3% increase from Q4 2015) MCMURRAY DUNVEGAN TAYLOR • 2016 revenue volumes: 650 mbpd (~6% year-over-year increase) FORT ST JOHN • Connected t
Slide 37: 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 revenue volume profile 800 650 mbpd 700 614 mbpd 575 mbpd 600 492 mbpd 500 456 mbpd 417 mbpd 374 mbpd Mbpd 400 300 200 100 - Q1-10 Q2-10 Q3-10 Q4
Slide 38: Phase III Project Update
Phase III Project Update Phase III Expansion ALBERTA Phase III Expansions Completed Phase III Expansion segment Pembina crude oil and condensate pipelines • Capital investment of $2.44 billion Pembina NGL pipelines Other Pembina pipelines • Initial capacity of 420 mbpd between Fox Pipeline Laterals
Slide 39: Crude Oil Midstream
Crude Oil Midstream • Develop and provide terminal, hub & storage ALBERTA services to support the energy industry FORT • ~900 mbbls of above ground crude oil and MCMURRAY TAYLOR condensate storage capacity • Access to approximately 1.2 mmbpd of crude oil and condensate supply through connected pipel
Slide 40: 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 41: 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 a
Slide 42: Oil Sands & Heavy Oil
Oil Sands & Heavy Oil Syncrude Pipeline • Operational excellence Horizon Pipeline Cheecham Lateral − ~99% reliable (2016) Nipisi Pipeline Mitsue Pipeline Peace Pipeline • Diverse connectivity to various industry hubs for crude oil and condensate • Contracts are long-life with high credit worthy coun
Slide 43: Gas Services
Gas Services • Positioned in active and emerging NGL rich plays ALBERTA • Provide gas gathering, compression and shallow/deep cut processing services • 618 MMcf/d shallow cut and 1,099 MMcf/d deep cut gas processing Fort McMurray capacity • Q4 2016 average revenue volumes: ‒ 976 MMcf/d (61% increase
Slide 44: Growing volumes in Gas Services
Growing volumes in Gas Services 1,200 1,000 800 MMcf/d 600 400 200 - 2009 2010 2011 2012 2013 2014 2015 Q1 Q2 Q3 Q4 (1) Revenue Volumes Gas Services is Pembina's fastest growing businesses (1) Volumes at Musreau exclude deep cut processing as those volumes are counted when they are processed through
Slide 45: NGL Midstream
NGL Midstream Gas Processing Plant Fractionator Redwater West: Midstream Storage Facility Truck Terminal • 155 mbpd of NGL fractionation capacity and 8.3 mmbbls of Rail Terminal Pembina Pipelines finished product cavern storage Third Party Pipelines • Industry-leading rail-based terminal (largest NG
Slide 46: 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 ~$425 million 73,000 bpd ~$415 million 55,000 bpd C3+ day. Ability to load c
Slide 47: Non-GAAP measures
Non-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 unlikely to be comparab