Pembina Pipeline Corporation · TSX:PPL
Pembina Pipeline — Investor Presentation (December 2021)
52 slides from Pembina Pipeline's investor presentation, Dec 8, 2021
Slide 1: 2021 Market Update
2021 Market Update ESG Overview, Business Update and 2022 Outlook TSX: PPL; NYSE: PBA December 8, 2021
Slide 2: Pembina Team and Agenda
Pembina Team and Agenda Agenda: Opening Remarks ESG Overview Randall Findlay Scott Burrows Janet Loduca Jaret Sprott Industry Conditions & Business Update Chair of the Board Interim President & Senior Vice President, Senior Vice President & Chief Executive Officer External Affairs & Chief Chief Oper
Slide 3: Forward-looking Information and Non-GAAP and Other Financial Measures
Forward-looking Information and Non-GAAP and Other Financial Measures Forward-Looking Statements and Information This presentation contains certain forward-looking statements and information, including certain financial outlooks (collectively, “forward-looking statements”) that are based on Pembina'
Slide 4: Opening Remarks
Opening Remarks TSX: PPL; NYSE: PBA
Slide 5: Message from the Chair on Behalf of the Board of Directors
Message from the Chair on Behalf of the Board of Directors Anne-Marie Ainsworth Cynthia Carroll Robert G. Gwin Maureen E. Howe Gordon J. Kerr David M.B. LeGresley Randall J. (Randy) Findlay Chair of the Board Leslie O’Donoghue Bruce D. Rubin Henry W. Sykes 4
Slide 6: What You Will Hear Today
What You Will Hear Today • Strategy, which has generated industry leading returns, remains intact • ESG is aligned with Pembina’s Purpose and is being embraced as a source of advantage • Extensive tailwinds across our business • 2022 adjusted EBITDA guidance of $3.35 to $3.55 billion • Fully funded
Slide 7: Purpose of Pembina
Purpose of Pembina To be the leader in delivering integrated infrastructure solutions connecting global markets: Customers choose us first for Investors receive sustainable reliable and value-added industry-leading total returns services Employees say we are Communities welcome us and the ‘employer
Slide 8: Diversified and Integrated Transportation and Midstream Assets
Diversified and Integrated Transportation and Midstream Assets ~3.1 mmbpd hydrocarbon transportation capacity ~6.1 bcf/d gas processing capacity ~130 mbpd condensate stabilization ~354 mbpd fractionation capacity ~32 mmbbl storage capacity ~20 mbpd propane export capacity 7
Slide 9: The Pembina Store
The Pembina Store Natural Gas Value Chain Gas Consumers NGL (pre-FID LNG Export Terminal) Mainline Extraction NGL Alliance Gathering, 3rd Party and Fractionation Pipeline Processing, Pipelines (Younger, Empress, Field Extraction Aux Sable) Industrial Users NGL Value Chain C2 C2 C3 C3 C2+ mix C4 3rd
Slide 10: ESG Overview
ESG Overview TSX: PPL; NYSE: PBA
Slide 11: ESG Supports All Pembina Stakeholders
ESG Supports All Pembina Stakeholders CUSTOMERS COMMUNITIES EMPLOYEES INVESTORS • Reducing GHG emissions intensity • Mitigating environmental impacts ENVIRONMENTAL • Reducing methane emissions • Supporting energy transition • Employee and contractor safety • Indigenous engagement & partnerships SOCI
Slide 12: Pembina's ESG Journey
Pembina’s ESG Journey Pembina is embracing Enhancing ESG the opportunity to adapt, Solid Foundation Meaningful Targets Path Forward respond, and contribute Disclosure & Capability to a more sustainable Employee and Contractor Establishing Baseline Data, GHG Emissions Operationalize Plans to Achieve
Slide 13: Environmental
Environmental TSX: PPL; NYSE: PBA
Slide 14: Environmental Accomplishments and Path Forward
Environmental Accomplishments and Path Forward As we strive towards our vision to be the leader in Enhancing ESG delivering integrated Solid Foundation Meaningful Targets Path Forward infrastructure solutions Disclosure & Capability and connecting our Environmental Protection 2020 Sustainability Rep
Slide 15: GHG Target and Path
GHG Target and Path (1) 30% reduction in greenhouse gas emissions intensity by 2030 Multiple pathways to achieve target OPERATIONAL RENEWABLE ENERGY INVESTING IN A LOWER CARBON ECONOMY • Optimizing pipeline capacity and • Increasing the use of renewable operations energy through efforts such as • De
Slide 16: Operational GHG Reduction Opportunities
Operational GHG Reduction Opportunities 2020 GHG Emissions Profile Potential GHG Emissions Reduction Projects Pipelines Re-stage Scope 1 Cogeneration compressors Scope 1 & 2 Facilities Scope 2 Facilities Drag reducing agents Improving fuel Variable efficiency Cost Per Tonne Frequency Waste heat Driv
Slide 17: Social
TSX: PPL; NYSE: PBA PEMBINAN
Slide 18: Social Accomplishments and Path Forward
Social Accomplishments and Path Forward Everyone wants to be part of a company that is forward-looking. Enhancing ESG Solid Foundation Disclosure & Capability Meaningful Targets Path Forward Whether lowering greenhouse gas Recognized Top Employer 2020 Sustainability Report includes Announced employe
Slide 19: Employee EDI Targets
Employee EDI Targets Representation by Women: • 35% of the overall workforce by 2025 • 30% of executive leadership by 2022 Overall diversity: • 40% of executive leadership is diverse by 2025* • 45% of the overall workforce is diverse by 2025* 45% 40% 35% 39% • Detailed workplans to support each of o
Slide 20: Indigenous Inclusion
Indigenous Inclusion Engagement with 115 Indigenous communities Meaningful Build lasting and mutually beneficial relationships with Indigenous Consultation & 4% Representation within our peoples affected by our current or future operations Engagement workforce of Indigenous Peoples Partnering with t
Slide 21: Governance & Reporting
Governance & Reporting TSX: PPL; NYSE: PBA
Slide 22: Governance & Reporting Accomplishments and Path Forward
Governance & Reporting Accomplishments and Path Forward A central part of a sustainable business is Enhancing ESG having strong and Solid Foundation Meaningful Targets Path Forward effective governance, Disclosure & Capability and we understand that Currently recognized as Increased Disclosure in 20
Slide 23: ESG Reporting & Ratings
ESG Reporting & Ratings 22 Committed to transparent reporting and ratings engagement to ensure access to high quality ESG information
Slide 24: Industry Conditions & Business Update
Industry Conditions & Business Update TSX: PPL; NYSE: PBA
Slide 25: Constructive Fundamentals
Constructive Fundamentals Pre-pandemic Alberta and B.C. Volumes Strong Commodity Prices Inventories Below Average Crude Oil(1) Crude Oil (3) Crude Oil (6) 2,200 5% $80 2,100 US Crude Oil Inventory 0% 2,000 $60 US$/bbl 1,900 (MMbbl) -5% $40 1,800 -10% 1,700 $20 -15% 1,600 $0 Jan Feb Mar Apr May Jun J
Slide 26: Constructive Fundamentals (cont.): Customer Discipline & Strength
Constructive Fundamentals (cont.) Customer Discipline & Strength Alberta and BC Drilling Rig Activity(1) (2) Canadian E&P Producers’ Free Cash Flow 200 ~$100 billion of excess cash flow in 2021-2023 CapEx Dividends Discretionary FCF Cash Flow 180 $80,000 $70,000 $39 BN 160 $30 BN $60,000 $32 BN ($mi
Slide 27: Growth Drivers: Northeast British Columbia (NEBC) Liquids
Growth Drivers: Northeast British Columbia (NEBC) Liquids Producer Consolidation and Growth Potential • Significant producer M&A activity since 2020; majority of land now held by a few investment grade counterparties and surrounding Pembina’s assets Significant NEBC • Larger companies capable of qui
Slide 28: Alliance Pipeline / Aux Sable Value Chain
Alliance Pipeline / Aux Sable Value Chain 1,800 101.0% Value Proposition 1,700 100.0% 1,600 99.0% • Reliable and highly competitive access to mid- mmcf/d 1,500 1,400 98.0% western U.S. gas and NGL markets 1,300 97.0% • Conduit to the Gulf Coast and its robust liquefied 1,200 1,100 96.0% natural gas
Slide 29: New Demand Sources: Natural Gas
New Demand Sources: Natural Gas Veresen Midstream Demand Drivers: • LNG buildout: LNG Canada (FID capacity of ~1.8 Bcf/d, expandable to ~3.7 Bcf/d at full build out); Cedar LNG (0.4 Bcf/d); other • Coal-to-gas conversion: 10+ unit conversions Coastal Gaslink inlet • Export lines: 2 Bcf/d of incremen
Slide 30: New Demand Sources: Ethane
New Demand Sources: Ethane Alberta’s Ethylene Cracker Capacity(1): DOW Fort Sask Cracker (Proposed) DOW Fort 375 Nova & DOW Sask Expansion 255 8 112 Capacity shown in mbpd Pembina Opportunities: • New petrochemical development will drive more ethane demand with potential for: 1) Increased utilizatio
Slide 31: New Demand Sources: Propane
New Demand Sources: Propane Demand Drivers: • Polypropylene production including third-party Heartland Petrochemical Complex • Incremental propane exports through multiple potential Ridley Island Propane Export Terminal export terminals and expansions Vopak Pacific Canada (proposed) • Incremental U.
Slide 32: New Demand Sources: Condensate
New Demand Sources: Condensate Demand Drivers: WCSB Condensate Demand(1) Bridge of 2021-2022 Forecasts Pembina Opportunities: • Peace Pipeline is well positioned to attract incremental WCSB volumes • While condensate production ramps in the WCSB demand growth can be met through spare capacity and lo
Slide 33: 2022 Guidance and Capital Budget
2022 Guidance and Capital Budget TSX: PPL; NYSE: PBA
Slide 34: Adjusted EBITDA
$3.70B $7.00 2022 Adjusted EBITDA Guidance $3.60B $6.00 • Volume increases on existing assets in conventional pipelines and gas processing • New assets placed into service throughout $3.50B 2021 and 2022 $5.00 Adjusted EBITDA per Share • Lower realized hedging losses $3.55B Adjusted EBITDA • Commodi
Slide 35: 2022 Capital Budget
2022 Capital Budget (C$ millions)(1) 2022 Capital Priorities: Pipelines Division $350 • Phase VII and Phase IX Peace Pipeline Expansions • Empress Cogeneration Facility Facilities Division $140 • Information technology enhancements to further the Company’s continuous improvement initiatives to Marke
Slide 36: Capital Allocation and Funding
Capital Allocation and Funding 2022 FUNDING PLAN PRIORITIES Upper End 1 of Guidance Maintaining balance sheet Priority to maintain a Lower End strength strong BBB rating $0.2 of Guidance $0.7 Free cash flow after 2 dividends and capital Maintained and grown Maintain dividends dividend since 1998 $1.
Slide 37: Financial Guardrails
Financial Guardrails 2021F 2022F Maintain target of 80% fee-based contribution to ~90% 85-90% “Pembina pioneered the 1 adjusted EBITDA(1) concept of the Financial Guardrails in the midstream energy industry. The Target <100% payout of fee-based distributable ~75% 70-75% Company’s strategy has 2 (~55
Slide 38: Driving Efficiency Within Our Business
Driving Efficiency Within Our Business Commitment to Operational Efficiency(2) ROIC Trend(1) Operating and G&A expense as a percentage of net revenue 12.0% $40 40.0% (Operating expense + G&A) / Net Revenue 10.0% Proportionately consolidated undepreciated $30 Return on Invested Capital (%) 8.0% capit
Slide 39: Inflation Protection
Inflation Protection Contracted Volumes Phase VII & IX Peace Pipeline Expansions Currently Under Construction Significant portion of operating costs, such as power, flow through directly to the customer Steel has been purchased and paid for Additional mechanisms are in place to inflate tolls Lump su
Slide 40: Projects
Projects TSX: PPL; NYSE: PBA PEMBINAN
Slide 41: Secured and Deferred Projects
Secured and Deferred Projects Phase VII Peace Pipeline Expansion – Under construction • 160,000 bpd of incremental C5+ capacity upstream of Fox Creek • Focus on Deep Basin volumes • Capital estimate lowered by $110 million, to $665 million • Expected in-service date advanced to mid-2022 Phase VIII P
Slide 42: Secured and Deferred Projects cont'd
Secured and Deferred Projects cont’d Empress Cogeneration – Under construction • 45MW facility that will reduce operating costs and reduce GHG emissions at the Empress NGL Extraction Facility • Capital estimate: $120 million; Expected in-service date: Q4 2022 Prince Rupert Terminal (PRT) Expansion –
Slide 43: $4 Billion of Projects Under Development
$4 Billion of Projects Under Development Driven By Criteria Type Projects • Petrochemical feedstock solutions Greenfield • NEBC infrastructure solutions • Gas processing facilities Increased producer activity; basin growth; petrochemical demand; • Cedar LNG contractual underpinnings • NEBC system ex
Slide 44: Leverage Our Past To Lead The Future
Leverage Our Past To Lead The Future Lower Carbon Energy Global Impact New Opportunities Wind Carbon Capture, Hydrogen Cogeneration Liquified Natural Gas 100MW Power Utilization & Storage Aux Sable Canada's Heartland Redwater, Empress Cedar LNG Purchase Agreement Offgas Processing Plant Alberta Carb
Slide 45: Alberta Carbon Grid
Alberta Carbon Grid Pembina and TC Energy plan to jointly develop a world-scale CO2 transportation and sequestration system known as Alberta Carbon Grid (ACG) • Pembina and TC Energy are uniquely positioned given their collective skills and extensive networks of pipeline infrastructure • ACG will le
Slide 46: What the Future Pembina Store Could Look Like
What the Future Pembina Store Could Look Like Natural Gas Value Chain CO2 CO2 Gathering, Gas Processing, NGL Mainline Extraction Field Extraction and Fractionation (pre-FID LNG (Younger, Empress, Export Terminal) NGL Alliance Pipeline 3rd Party Pipelines Aux Sable) NGL Value Chain CO2 C2 C2 C2+ mix
Slide 47: Closing Remarks
Closing Remarks TSX: PPL; NYSE: PBA
Slide 48: Pembina's Value Proposition
Pembina’s Value Proposition ✓ Leading provider of essential North American energy services ✓ Track record of sector outperformance ✓ Resilient and diverse set of franchise assets and services along the energy value chain ✓ Unparalleled fairway to growth in the prolific Montney and Duvernay areas wit
Slide 49: Q&A
Q&A
Slide 50: Endnotes
Endnotes Slide 14: GHG Target and Path (1) Relative to baseline 2019 emissions. Slide 35: Capital Allocation and Funding Slide 22: ESG Reporting & Ratings (1) Includes dividends on common and preferred shares. (1) Ratings shown are as September 2021. (2) Includes capital expenditures, contributions
Slide 51: Non-GAAP and Other Financial Measures
Non-GAAP and Other Financial Measures Non-GAAP financial measures either exclude an amount that is included in, or include an amount that is excluded from, the 9 Months Ended 12 Months Ended composition of the most directly comparable financial measure specified, defined or determined in accordance
Slide 52: Contact Us
Contact Us Pembina Pipeline Corporation www.pembina.com Investor Relations inquiries: investor-relations@pembina.com Toll free: 1.855.880.7404 Phone: 403.231.3156 Media Relations inquiries: media@pembina.com 51
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