Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — Investor Presentation (August 2018)
53 slides from Kinder Morgan's investor presentation, Aug 23, 2018
Slide 1: TGP 2018 Customer Meeting
TGP 2018 Customer Meeting August 23, 2018
Slide 2: Agenda
Agenda Welcome and Introductions Ernesto Ochoa- Vice President, Commercial Kinder Morgan Update Tom Martin- President, KM Gas Pipelines TGP Marketing Update Jason Connelly- Director, Commercial TGP Operations Update Tom Dender- Vice President, Pipeline Management TGP Business Development U
Slide 3: Corporate Overview
Corporate Overview August 23, 2018 Tom Martin, President – Gas Pipelines
Slide 4: One of the Largest Diversified Energy Infrastructure Companies in North America
One of the Largest Diversified Energy Infrastructure Companies in North America CO2 S&T KM Canada Natural Gas Pipelines CO2 EOR 4%3% Largest natural gas transmission network in 7% North America Terminals 15% Own or operate ~70,000 miles of natural gas $8,093mm Natural pipelines EBDA(b) 56% Gas P
Slide 5: Natural Gas Segment Outlook and Asset Overview
Natural Gas Segment Outlook and Asset Overview Well-Positioned: Connecting Key Natural Gas Resources with Major Demand Centers Long-Term Growth Drivers: Asset Summary Exports Natural Gas Pipelines: 70,000 Miles — LNG exports: liquefaction facilities and U.S Nat Gas Moved by KM: ~40% pipeline infra
Slide 6: $6.3bn of Secured Capital Projects Underway
$6.3bn of Secured Capital Projects Underway Significant Opportunities Primarily Resulting from Expansive Natural Gas Footprint Demand Pull / Supply KMI Capital Estimated Secured Capital Projects Push ($ billion) In-Service Date Capacity Natural Gas Elba liquefaction and related terminal facilities $
Slide 7: Positioned to Support Future of Natural Gas
Positioned to Support Future of Natural Gas Kinder Morgan Transports ~40% of All Natural Gas Consumed in the U.S. Eagle Ford, 5 Eagle Ford, Haynesville, 6 8 Haynesville, U.S. PRODUCTION 10 SUPPLY (Bcf/d) PROJECTED TO GROW BY >30 Other U.S., 31 Permian, 7 BCF/D AND >40% OVER NEXT 10 YEARS Permian, 15
Slide 8: Unmatched Natural Gas Network and Deliverability
Unmatched Natural Gas Network and Deliverability Strong Fundamentals Drive Value on Existing Assets and Create Investment Opportunities KM NATURAL GAS PIPELINES (Bcf/d) 2017 2018E 2019E U.S. Natural Gas Demand 80 89 95 = Growing supply area Bakken Volume Growth 8 6 % Growth 10% 7% = Key areas of dem
Slide 9: Growth Driver: Buildout of U.S. LNG Exports
Growth Driver: Buildout of U.S. LNG Exports Multiple Liquefaction and Natural Gas Transport Opportunities Across KM Footprint Global demand driving significant buildout of LNG export KM Network Reaches Multiple Export Facilities capabilities in the U.S. TGP KMLP U.S. LNG exports reached over 3 Bcf
Slide 10: Project Highlight: Elba Island LNG Export Terminal
Project Highlight: Elba Island LNG Export Terminal Elba Liquefaction Company (ELC)(a) / Southern LNG Company (SLNG) Project Scope Liquefaction facilities (10 small-scale modular units) Ship loading facilities; boil-off gas compression Located on Elba Island near Savannah, Georgia Project Stati
Slide 11: Growth Driver: Surging Permian Production
Growth Driver: Surging Permian Production KM Providing Additional Takeaway Capacity for Associated Natural Gas Production KM Positioned to Serve Current and Future Existing footprint reaches across Texas with Production connectivity into all major demand markets Natural Gas Pipelines Under Construct
Slide 12: Project Highlight: Gulf Coast Express (GCX)
Project Highlight: Gulf Coast Express (GCX) Permian Direct-to-Gulf Coast Project Satisfying Multiple Growth Drivers Project Scope Project Drivers Mainline: 447.5 miles of 42” pipeline originating at the Waha Producer push project to transport prolific growing natural gas Hub and terminating near
Slide 13: TGP Bidroom Update
TGP Bidroom Update Including Pooling Changes New Storage Services Jason Connelly Director, Marketing and Asset Optimization
Slide 14: Topics of Discussion
Topics of Discussion What and Who of the TGP Bidroom Benefits of Park and Loan in Meeting Customer Needs Open Capacity Marketing Market Trends Strategic Initiatives 14
Slide 15: North Region Marketing Team
North Region Marketing Team Jim McCord Account Director Producers and LNG Scott Minear Jason Connelly Brendan Marquardt Account Manager Director Asset Account Manager Optimization Kenny Durio Mark Wilson Account Manager Coralie Sculley Manager Asset Account Director - Optimization Adam Ledet Ernesto
Slide 16: What is the Bidroom / Asset Optimization
What is the Bidroom / Asset Optimization Improving / Increasing level of service to customers using existing assets Customer Service Customer Representation Open Capacity Marketing Park and Loan IT Discounting Open Seasons Strategic Initiatives Market Intelligence and Forecasting 16
Slide 17: Park and Loan Benefits
Park and Loan Benefits Interruptible Service Balancing Services Utilizing Linepack and Operational Storage Load Swings Call the Bidroom for Interesting Deal Structure: — Restriction Management 2 day PAL service to allow power generator to swing on linepack, when — Intraday Swings operational
Slide 18: Open Capacity Marketing / Open Seasons
Open Capacity Marketing / Open Seasons Where Does Open Capacity Come How Does the Bidroom From? Market Capacity? Under-contracted segments Capacity Request ROFR Turnback Generally Available Open Season Receipt / Delivery Point Changes Pre-Arranged Deals Technology Improvements Custom
Slide 19: Trends: North to South Restricted Area Expanding
Trends: North to South Restricted Area Expanding Station 204 Restriction Supply growth drove reversal of flow Capacity increases -> Increased Utilization Outage-driven restrictions Sustained flow near/at capacity. 500 Line Reversal of flow Increased utilization Outage-driven restrictio
Slide 20: Trends: Storage – Short-Term Volatility Driver
Trends: Storage – Short-Term Volatility Driver Low balance at start of season Eastern Storage 1,000 800 Strong power and LNG demand 600 400 Driver of winter volatility 200 — Lower firm balances 0 — Shifted deliverability curve J F M A M J J A S O N D — Lack of gas to loan Min 5-Yr Range 2018 A
Slide 21: Strategic Initiative: Zone 5 and 6 Pooling Changes
Strategic Initiative: Zone 5 and 6 Pooling Changes 200 Leg West - Zone 5 Pool 200 Leg South - Zone 6 Pool 200 Leg East - Zone 5 Pool 200 Leg North - Zone 6 Pool 200 Leg West - Zone 5 Pool 200 Leg East - Zone 5 Pool 200 Leg South - Zone 6 Pool 200 Leg North Pool – Zone 6 Re-name the existing 200 Leg
Slide 22: Strategic Initiative: New Storage Service on 800L
Strategic Initiative: New Storage Service on 800L Liquefaction facilities create need for storage to manage swings in load. Exploring opportunities to develop new service to serve this need. 800 Line Storage Open Season Held open season for storage service on 800L Zone L 800 Leg Pool Promote / s
Slide 23: Bidroom is Here for You
Bidroom is Here for You Please contact any of us with ideas, questions, or comments Jason Connelly Mark Wilson 713-420-2446 713-420-7205 Scott Minear Kenny Durio 713-420-5177 713-420-5307 Adam Ledet Adrienne Reid 713-420-4813 713-420-8413 23
Slide 24: Pipeline Operations Update
Pipeline Operations Update August 2018 Tom Dender, Vice-President Pipeline Management
Slide 25: TGP Pipeline Management
TGP Pipeline Management System wide flows and throughput Winter update Summer update Operations outlook 25
Slide 26: TGP System Map
TGP System Map ~11,750 miles of pipe Active supply/delivery meters ~700 200 Line 267 Storage capacity ~109 bcf Colden 315 245321 261 Direct connected power ~24,650 mw Hebron-Ellisburg-Harrison Rivervale 300 Line Mahwah 219 204 200 Line 110 87 860 Bear Creek 500 Line 40 800 Line 100 Line 823
Slide 27: TGP System Wide Throughput
TGP System Wide Throughput Deliveries by Zone +13% 10,000 9,621 +6% +1% 1,002 9,000 8,409 8,494 7,870 8,000 1,047 983 2,246 1,072 7,000 2,154 ZONE 6 2,154 6,000 ZONE 5 2,070 1,878 ZONE 4 MDth/d 5,000 ZONE 3 1,369 1,474 21 1,106 174 ZONE 2 4,000 29 43 165 186 ZONE 1 139 62 2,234 ZONE L 3,000 2,108 1,
Slide 28: System Wide LDC Demand
System Wide LDC Demand 2016 2017 2018 2,500 2,000 MDth/d 1,500 1,000 500 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 28
Slide 29: System Wide Power Demand
System Wide Power Demand 2016 2017 2018 2,500 2,000 MDth/d 1,500 1,000 500 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 29
Slide 30: TGP Gas Receipts
TGP Gas Receipts Approximately 9.7 Bcf/d from various basins 4.8 Bcf/d - Appalachian 0.7 Bcf/d - Eagleford 0.4 Bcf/d - Haynesville 0.4 Bcf/d - Traditional / Offshore 3.4 Bcf/d - Pipelines and storage 800 Line 30
Slide 31: Winter System Wide 2017/2018
Winter System Wide 2017/2018 Overview — Strong Winter Demand ‒ 9 out of the Top-10 All-time System Peak Delivery Days occurred in January — System-wide throughput increased 6% compared to previous winter — Storage Inventories down from 2016/2017 Demand — System Wide Peak Day was ~11.6 Bcf/d on J
Slide 32: Winter System Wide Flows 2017/2018
Winter System Wide Flows 2017/2018 2015-2016 2016-2017 2017-2018 Change LDC 1,659 1,724 1,880 +9% Power 1,132 1,095 1,324 +21 Pipeline 4,938 5,170 5,372 +4% Interconnects Mexico 696 844 857 +1% Other 365 300 304 +1% TOTAL 8,790 9,133 9,737 +6 Volumes are MDth/d 32
Slide 33: Winter System Wide Power Demand
Winter System Wide Power Demand Deliveries by Zone +21% 1,400 1,324 +9% 144 -3% 1,200 1,132 1,095 110 1,040 160 136 1,000 187 178 132 336 Zone 6 800 143 MDth/d Zone 5 130 194 36 35 Zone 4 21 9 14 Zone 2 600 Zone 1 Zone 0 400 650 698 652 619 200 0 2 5 0 0 2014-2015 2015-2016 2016-2017 2017-2018 33
Slide 34: Summer System Wide 2018
Summer System Wide 2018 Overview — System-wide throughput increased 17% compared to previous summer — Challenging Maintenance Season Demand — Strong Demand across system, especially in Zone 1 and Zone 4 (Power Loads) — Significant increase in LDC, Power and Pipeline Interconnect Loads compared t
Slide 35: Summer System Wide Flows
Summer System Wide Flows 2016 2017 2018* Change LDC 868 840 1,036 +23% Power 1,524 1,345 1,547 +15% Pipeline 4,638 4,678 5,613 +20% Interconnects Mexico 757 793 880 +11% Other 273 433 419 -3% TOTAL 8,060 8,089 9,495 +17% Volumes are MDth/d *Through July 35
Slide 36: Summer System Wide Power Demand
Summer System Wide Power Demand Deliveries by Zone +13% +15% 1,600 1,524 1,547 -11% 216 1,400 305 1,344 1,345 146 1,200 282 359 163 1,000 130 333 Zone 6 224 150 Zone 5 MDth/d 31 30 800 79 244 Zone 4 38 Zone 2 19 Zone 1 600 Zone 0 400 798 822 707 669 200 0 11 3 0 0 2015 2016 2017 2018* *Through July
Slide 37: Operational Expectations
Operational Expectations Continued high utilization system- wide System Wide Deliveries — Increasing peak day deliveries Rank Gas Day MDth/d Bcf/d 1 1/2/2018 12,045 11,637 — Strong Marcellus and Utica supplies 2 1/4/2018 11,753 11,357 3 1/1/2018 11,572 11,180 — New LNG and Mexico markets 4 1/6/201
Slide 38: Station 106 – Winchester, KY
Station 106 – Winchester, KY Broad Run Expansion Project 38
Slide 39: Station 836A – Delhi, LA
Station 836A – Delhi, LA Cameron LNG Project 39
Slide 40: Station 3A – Sinton, TX
Station 3A – Sinton, TX Lone Star Expansion 40
Slide 41: Tennessee Gas Pipeline Contact List
Tennessee Gas Pipeline Contact List Gas Control Transport ion and Storage Commercial/Marketing Field Operations 24 hour and emergency 24 hour Scheduling Hotline Jason Connelly - Director Tom Burgett– Director(Northeast) 800-231-2800 713-420-4999 713-420-2446 860-763-6027 Cell – 713-444-3940 Cell – 7
Slide 42: Business Development Update “Catch a Wave”
Business Development Update “Catch a Wave” August 23, 2018 Paul Smith, Director Business Development
Slide 43: Overview
Overview Progressing on Project Backlog Adding 1.2 Bcf/d to connect two new LNG projects o Cameron (Mitsui, Mitsubishi) – Jan 2019 o Corpus Christi (Cheniere) – Jan 2019 Adding 200,000 Dth/d to move Marcellus gas south o Broad Run Expansion (Antero) – Sep 2018 TGP Development Drivers 1. Shale pr
Slide 44: Driver #1 – Shale Production
Driver #1 – Shale Production Continued supply growth expected on both ends of TGP Appalachian supply continues steady growth Surging Permian targeting Mexico and LNG exports Potential to flow north? Eagle Ford and Haynesville also growing +17.2 TGP markets well supplied + 9.5 ? 44
Slide 45: Appalachian Production
Appalachian Production ~14 Bcf/d of growth projected thru 2027 Kinder Morgan Forecast Takeaway by Corridor (2018-27) 41.5 38.1 39.4 36.0 31.3 27.6 27.1 28.1 29.6 26.0 22.4 20.0 7.6 8.9 10.0 11.0 11.3 11.9 2018 2019 2021 2023 2025 2027 Southwest (West and South of TGP Sta. 313) KM Estimates Northeast
Slide 46: Driver #2 – LNG Exports
Driver #2 – LNG Exports U.S. LNG exports quadrupled in 2017 18.0 Fully- approved KM Committed Transport 10.0 8.6 Under construction Under construction 3.5 3.6 In-service In-service Today YE2018 YE2019 YE2020 2021+ U.S. Liquefaction Capacity(a) (Bcf/d) U.S. LNG export capacity reaches 3.6 Bcf/d in
Slide 47: Future LNG and Mexico Exports
Future LNG and Mexico Exports The next “wave” of projects TGP expansions nearing completion to Cameron (900,000 Dth/d) and Corpus Christi (300,000 Dth/d) Connectivity to Freeport via Coastal Bend Majority of future LNG project potential is along TGP footprint Currently marketing up to 140,00
Slide 48: Driver #3 – Power Generation
Driver #3 – Power Generation Gas-fired generation still on the rise Natural gas share of summer power-gen near all-time high TGP has seen tremendous growth in power-generation Natural gas share ~ 37% Delivered ~ 1.55 Bcf/d summer (15% increase) Coal share ~ 30% Delivered ~ 1.32 Bcf/d winter
Slide 49: Retirements and the growth of Combined Cycle
Retirements and the growth of Combined Cycle Many plant retirements have completed or delayed, but other factors are favorable Announced and Potential Retirements (as of Aug-2018) Drivers for NGCC Generation Retirements Turbine Performance Turbine Costs Financing Cost Natural Gas Prices So
Slide 50: Driver #4 – Supply Security and Diversity
Driver #4 – Supply Security and Diversity Managing substantial shifts in supply and demand NE LDC Incremental demand growth will compete for supply Markets Potential to reshape long-term supply portfolios LDC, Power-Gen Appalachian supply growth offers potential solutions TGP developing mu
Slide 51: Summary
Summary Strong supply and demand on TGP with all-time high throughput Approaching 12 Bcf/d peak and 10 Bcf/d average Improving / Increasing level of service to customers using existing assets Nearing completion of significant project backlog Well positioned for another “wave” of developmen
Slide 52: Business Development Team
Business Development Team Preston Troutman Paul Smith Stuart Neck Vice President Business Development Director Business Development Director Business Development Tennessee Gas Pipeline Tennessee Gas Pipeline Tennessee Gas Pipeline Office: 713-420-3022 Office: 205-325-3515 Office: 713-420-2230 Cell:
Slide 53: TGP 2018 Customer Meeting
TGP 2018 Customer Meeting August 23, 2018