Pembina Pipeline Corporation · TSX:PPL
Pembina Pipeline — Shareholder Meeting (May 2022)
41 slides from Pembina Pipeline's shareholder meeting presentation, May 6, 2022
Slide 1: Pembina Pipeline Corporation 2022 Annual Meeting of Common Shareholders
Pembina Pipeline Corporation 2022 Annual Meeting of Common Shareholders May 6, 2022 TSX: PPL; NYSE: PBA
Slide 2: Welcome
Welcome Jaret Sprott Janet Loduca Cameron Goldade Senior Vice President & Senior Vice President, Interim Chief Financial Chief Operating Officer External Affairs & Chief Officer Legal and Sustainability Officer Scott Burrows President and CEO Eva Bishop Stu Taylor Senior Vice President, Senior Vice
Slide 3: Equity, Diversity and Inclusion (EDI) Moment
Equity, Diversity and Inclusion (EDI) Moment
Slide 4: Forward-looking Information and Non-GAAP and Other Financial Measures
Forward-looking Information and Non-GAAP and Other Financial Measures Forward-Looking Statements of the joint venture transaction following closing; the regulatory environment; adverse actions by governmental or regulatory authorities; fluctuations in operating results; adverse general economic and
Slide 5: Pembina's strategy remains intact…
Pembina’s strategy remains intact…
Slide 6: Unwavering Commitment to Our Four Stakeholder Groups
Unwavering Commitment to Our Four Stakeholder Groups… 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 of choice’ recognize the net positive impact of and value o
Slide 7: Demonstrated by Our ESG Priorities
… Demonstrated by Our ESG Priorities 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 SOCIA
Slide 8: Diversified and Integrated Assets
Diversified and Integrated Assets ~3.1 mmbpd hydrocarbon transportation capacity ~6.1 bcf/d(1) (pre-FID) gas processing capacity ~130 mbpd (1) condensate stabilization ~354 mbpd fractionation capacity ~32 mmbbl storage capacity ~20 mbpd propane export capacity 7
Slide 9: Continuing to Enhance The Pembina Store
Continuing to Enhance The Pembina Store Natural Gas Value Chain Gas Consumers NGL (pre-FID LNG Export Terminal) Mainline Extraction NGL Alliance 3rd Party and Fractionation Pipeline Gathering, Processing, Pipelines (Younger, Empress, Field Extraction Aux Sable) Industrial Users NGL Value Chain C2 C2
Slide 10: Financial Guardrails Remain Core to Pembina's Strategy
Financial Guardrails Remain Core to Pembina’s Strategy ✓ Maintain target of 80% fee-based contribution to adjusted EBITDA(1) ✓ Target <100% payout of fee-based distributable cash flow ✓ Target 75% credit exposure from investment grade and secured counterparties ✓ Maintain strong BBB credit rating De
Slide 11: Pembina Delivers Through Market Cycles
Pembina Delivers Through Market Cycles Acquisition Acquisition Acquisition of of Veresen of KML Provident 120 9 6.00 8 100 5.00 7 80 6 4.00 5 3.0060 4 2.0040 3 2 1.0020 1 0.00 0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (F) (2) Financial Crisis Commodity Price Coll
Slide 12: Looking back over the past year…
Looking back over the past year…
Slide 13: Strong Results
Strong Results Full Year 2021 • Earnings of $1.24 billion and record full-year adjusted EBITDA* of $3.43 $3,281 $3,433 billion, exceeding the high-end of guidance • Improved commodity prices across all products within Pembina’s value chain – crude oil, natural gas and natural gas liquids • Placed ov
Slide 14: New Gas Processing Joint Venture
New Gas Processing Joint Venture Pembina and KKR to combine their respective western Canadian natural gas processing assets into a single, new joint venture entity ("Newco") • Assets › Pembina’s field-based natural gas processing assets › Pembina and KKR’s interests in Veresen Midstream 100% 45% 49%
Slide 15: Newco Platform Spans the Montney and Duvernay Trends
Newco Platform Spans the Montney and Duvernay Trends Pembina assets contributed 25 to Newco processing facilities Veresen Midstream assets contributed to Newco ETC assets contributed to ~5 bcf/d VERESEN Newco processing capacity MIDSTREAM PATTERSON ~3,350 km CREEK gathering and transport lines KA WA
Slide 16: Targets Quantify Our Commitment to ESG
Targets Quantify Our Commitment to ESG GHG Target and Path Employee EDI Targets (1) 30% reduction in greenhouse gas emissions intensity by 2030 45% 40% 40% Multiple pathways to achieve target 39% 35% 35% 30% 26% INVESTING IN A OPERATIONAL RENEWABLE LOWER CARBON ENERGY ECONOMY Overall Executive Overa
Slide 17: Indigenous Partnerships
Indigenous Partnerships • Proposed 3 mmtpa floating LNG project on Haisla land • Approximate ownership of 50 percent each; Pembina to serve as operator • Advantaged access and shipping cost to Asia-Pacific • Estimated project cost of US$2.4 billion(1)(2) • Expected final investment decision in 2023(
Slide 18: Looking to the future…
Looking to the future... PEMBINAN
Slide 19: Activity Rising
Activity Rising Alberta and B.C. Volumes - Pre-pandemic to Present Alberta and B.C. Drilling Rig Activity(3) Crude Oil (1) 200 10% 5% 180 0% -5% 160 -10% -15% -20% 140 2020-Q1 2020-Q2 2020-Q3 2020-Q4 2021-Q1 2021-Q2 2021-Q3 2021-Q4 120 6% Natural Gas (1) 4% 2% 100 0% -2% 80 -4% -6% -8% 60 2020-Q1 20
Slide 20: Growth Driver: Northeast British Columbia Liquids
Growth Driver: Northeast British Columbia Liquids Producer Consolidation and Growth Potential Significant NEBC Land Holders • Majority of land held by a few investment grade counterparties and surrounding Pembina’s assets • Larger companies capable of quicker capital deployment at a lower cost NEBC
Slide 21: Projects Currently Underway
Projects Currently Underway • Phase VII Peace Pipeline Expansion – Expected to enter service on June 1, ahead of schedule and $150 million under budget • Phase VIII Peace Pipeline Expansion – Recently reactivated; expected in service H1’24 • Phase IX Peace Pipeline Expansion – Under construction; ex
Slide 22: $4 Billion of Additional Projects Under Development
$4 Billion of Additional Projects Under Development • NEBC infrastructure solutions • Gas processing facilities Greenfield • Cedar LNG • Petrochemical feedstock solutions • Additional NGL extraction at existing assets • NEBC system expansion • Edmonton Terminals expansion Brownfield • Pipeline later
Slide 23: 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 24: 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) • Capable of transporting and sequestering 20 million tonnes of CO2 annually once fully constructed • Pembina and TC Energy are uniquely posi
Slide 25: 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 26: Delivering value to shareholders…
Delivering value to shareholders…
Slide 27: Capital Allocation Priorities
Capital Allocation Priorities 2022 Sources and Uses 1 Maintaining balance sheet strength 2 Maintain dividends 3 Accretive growth capital 4 Discretionary cash flow: (1) 2022 Proceeds from Dividends Capital Opportunistic Debt (2)(3) Debt reduction, dividend increase, or opportunistic Guidance Newco Ex
Slide 28: Commitment to a Strong BBB Credit Rating
Commitment to a Strong BBB Credit Rating Proportionately Consolidated Debt-to-Adjusted EBITDA* 4.25x TARGET 4.0x • Strong BBB credit rating is foundational to strategy 3.6x 3.50x 3.3x - 3.5x • Demonstrated discipline and commitment to the balance sheet 2020 2021 2022 (F) with our pandemic response R
Slide 29: Stable and Growing Dividend
Stable and Growing Dividend Paid over $11 billion in common share dividends since inception(1) $2.565 $2.52 $2.52 10-Year Dividend per share CAGR: ~4.8% $2.543 $2.36 2021 Standard Payout Ratio: 52.5%* $2.24 $2.04 $1.90 $1.80 $1.72 $1.65 $1.61 (2) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 202
Slide 30: Industry Leading Returns
Industry Leading Returns 150 • Since May 1, 2021 Pembina has delivered a total shareholder return 140 of 42%(1)(2) Relative Total Return (100 = May 1, 2021) • Pembina has outperformed relevant 130 major indices during the same period(1) 120 110 100 May '21 Jun '21 Jul '21 Aug '21 Sep '21 Oct '21 Nov
Slide 31: Pembina's Value Proposition
Pembina’s Value Proposition ✓ Leading provider of essential North American energy services ✓ Track record of sector outperformance ✓ Resilient and diverse set of franchise assets and services along the energy value chain ✓ Established presence and further growth opportunities in the prolific Montney
Slide 32: Question & Answer Period
Question & Answer Period PEMBINAN
Slide 33: Thank you
Thank you PEMBINAN
Slide 34: Endnotes
Endnotes Slide 7: Diversified and Integrated Assets (1) Prior to Newco transaction. Slide 18: Activity Rising (1) Source: CER. Slide 9: Financial Guardrails Remain Core to Pembina’s Strategy (2) Source: AER and Government of B.C. website plus Pembina estimates. (1) Includes inter-segment transaction
Slide 35: Non-GAAP and Other Financial Measures
Non-GAAP and Other Financial Measures Throughout this presentation, Pembina has disclosed certain financial measures and ratios that are not defined in accordance with GAAP and which are not disclosed in Pembina's financial statements. Non-GAAP financial measures either exclude an amount that is inc
Slide 36: Non-GAAP and Other Financial Measures
Non-GAAP and Other Financial Measures Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("adjusted EBITDA") and adjusted 3 Months 3 Months Year Ended Year Ended EBITDA per Common Share ($ millions, except as noted) Notes Ended Mar 31, Ended Mar 31, Dec. 31, 2020 Dec. 31, 2021 A
Slide 37: Non-GAAP and Other Financial Measures
Non-GAAP and Other Financial Measures Adjusted EBITDA From Equity Accounted Investees Year Ended December 31, 2020 Year Ended December 31, 2021 ($ millions, except as noted) Notes Marketing & Marketing & Pipelines Facilities Total Pipelines Facilities Total New Ventures New Ventures In accordance wi
Slide 38: Non-GAAP and Other Financial Measures
Non-GAAP and Other Financial Measures Year Ended December Adjusted Cash Flow From Operating Activities and Adjusted Cash Flow From Operating Activities per ($ millions, except as noted) Notes 31, 2021 Common Share Cash flow from operating activities 2,650 Adjusted cash flow from operating activities
Slide 39: Non-GAAP and Other Financial Measures
Non-GAAP and Other Financial Measures Rating Agency FFO-to-Debt Rating Agency FFO-to-Debt is a non-GAAP ratio defined and used by Pembina to Year Ended Year Ended ($ millions, except as noted) Notes replicate one of the Company’s rating agency methodologies, in the evaluation of December 31, 2020 De
Slide 40: Non-GAAP and Other Financial Measures
Non-GAAP and Other Financial Measures Year Ended Year Ended December Senior Debt ($ millions, except as noted) Notes December 31, 2020 31, 2021 Senior debt is a non-GAAP measure and is defined as the sum of current and non-current loans Loans and borrowings (current) 600 1,000 and borrowings. Senior
Slide 41: 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 40