Pembina Pipeline Corporation · TSX:PPL
Pembina Pipeline — Corporate Update (March 2016)
38 slides from Pembina Pipeline's corporate update, March 2016
Slide 1: Pembina Pipeline Corporation March 2016 Corporate Update
PEMBINA PIPELINE CORPORATION “DOING THE IMPORTANT THINGS RIGHT” March 2016 Corporate Update Presentation TSX: PPL; NYSE: PBA
Slide 2: Forward-looking statements & information
Forward-looking statements & information This presentation is for information purposes only and is expectations regarding future commodity market supply, Canada at www.sedar.com and in the United States at not intended to, and should not be construed to constitute, demand and pricing and supply and
Slide 3: Pembina: a unique investment opportunity
Pembina: a unique investment opportunity TSX: PPL│NYSE: PBA Pure play energy infrastructure company that Common shares outstanding(1) 376 million allows investors to participate in the oil and natural gas liquids industry across Canada and TSX common share trading price(1) $33.77 North Dakota. We: T
Slide 4: Pembina remains steadfast in a rapidly changing world
Pembina remains steadfast in a rapidly changing world Key Investment Highlights Highly contracted underlying business + ~$5.3 BB of fee-for-service growth ‒ In 2015 ~80% of NOI was from fee-for-service + substantial take-or-pay underpinning ‒ By 2018 80 – 85% NOI is expected to be fee-for-service
Slide 5: Our assets and businesses at a glance
Our assets and businesses at a glance Midstream 73 mbpd Redwater fractionator; 20 truck terminals; 13.7 MMbbl storage; product marketing; 2.4 bcf/d extraction; Nexus Terminal hubs Gas Services 468 MMcf/d shallow cut gas processing capacity; 799 MMcf/d deep cut gas processing capacity; 400+ km of gat
Slide 6: Integrated, customer-focused value chain
Integrated, customer-focused value chain Conventional Gas/HVP Value Chain: Gas Services Pipelines Midstream Mainline Extraction • Gathering and processing • Transportation on Conventional Pipelines Gathering, Production HVP Feeder Propane • Fractionation Processing, Pipelines export Consumption Fiel
Slide 7: Our business operates in prolific geology
Our business operates in prolific geology ALBERTA SASKATCHEWAN OIL SANDS MONTNEY (Resource life 200+ years) (Resource Life TAYLOR ~170 years) FORT MCMURRAY SEAL & PELICAN LAKE DEEP BASIN SWAN HILLS (Resource Life ~37 years) Fort Saskatchewan EDMONTON DUVERNAY (Resource Life CARDIUM ~500 years) (Reso
Slide 8: We are pursuing a fee-for-service growth portfolio
We are pursuing a fee-for-service growth portfolio Projects In Service Capital (C$MM) Relative Growth Project Portfolio Phase II NGL/Crude Expansions $660 SEEP $100 35% Saturn II Facility $150 32% Other projects (incl. Resthaven gathering pipeline) $240 Pembina has the largest committed grow
Slide 9: Project timelines & in-service dates
Project timelines & in-service dates Committed Capital Expected In-Service Date* Expected Project Timelines* $4.5 billion of capital $1.2 SEEP expected to be put ~$4.0 BB Sa turn II $4.0 into service in 2016 Pha s e II Expa ns i on In-Service RFS II $3.5 Mus rea u III Res tha ven Expa ns i on $3.0 T
Slide 10: We are committed to a low risk business platform
We are committed to a low risk business platform $100-$150 million $600-$950 million of incremental annual run-rate EBITDA of potential incremental annual run-rate EBITDA in-service throughout 2015(1) once Pembina’s committed projects are all in-service(4) ~1% - 3% 14% 20% ~12% - 19% 19% 67% ~80% -
Slide 11: Evolution of Pembina's acquisitions
Evolution of Pembina’s acquisitions EV/NOI multiple at acquisition date Current EV/NOI multiple 12.0x 11.6x 11.6x 11.5x 12.0x 10.0x 10.0x 9.8x 10.0x 10.0x 8.6x 8.4x 8.0x 8.0x 6.8x 7.1x 6.0x 6.0x 4.0x 4.0x 2.0x 2.0x 0.0x 0.0x Cutbank Edmonton North Provident (3) Vantage (4) Weighted Cutbank (1) Edmon
Slide 12: Dividend growth supported by growing cash flow
Dividend growth supported by growing cash flow $2.50 8.8% CAGR in ACFPS(1) 5.5% CAGR in Dividend per Share 2005 – 2015 2005 – 2015 $2.00 $1.50 $1.00 $0.50 $- 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Divdends per share Adjusted cash flow from operating activities per share Strong histor
Slide 13: Business Overview
BUSINESS OVERVIEW
Slide 14: Conventional Pipelines – overview
Conventional Pipelines – overview • Pipeline operational excellence: 97% reliable (2015) ALBERTA • Proximal to prolific geology FORT MCMURRAY • Q4 2015 throughput: 621 mbpd (~2% increase from Q4 2014) DUNVEGAN TAYLOR FORT • 2015 throughput: 614 mbpd (~7% increase from 2014) ST JOHN • Connected to re
Slide 15: Our throughput continues to grow
Our throughput continues to grow • Solid industry performance and strategically located assets have led to strength in Pembina's throughput profile 700 614 mbpd 575 mbpd 600 492 mbpd 456 mbpd 500 417 mbpd 393 mbpd 374 mbpd 400 Mbpd 300 200 100 - Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11
Slide 16: Phase III Expansion, Phase II Expansion and Lateral Program
Phase III Expansion, Phase II Expansion and Lateral Program Phase III Expansion Phase II HVP & LVP Expansions Phase III Expansion (under construction) • Project consisted mainly of pump stations, ALBERTA Completed Phase III Expansion segment storage enhancements and pipeline Previously announced Pha
Slide 17: 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 1,200 420 1,000 Mbpd 800 55 53 45 52 600 175 400 200 453 – Pre Expansion (2010) Phase I (In-Service) Phase II (In-Service) Phase III Phase III (ultimate capacity) Phase III (combined system (mid
Slide 18: Oil Sands & Heavy Oil – overview
Oil Sands & Heavy Oil – overview Syncrude Pipeline • Operational excellence Horizon Pipeline Cheecham Lateral ‒ 99+% reliable (2015) Nipisi Pipeline Mitsue Pipeline Peace Pipeline • Diverse connectivity to various industry hubs for crude oil and condensate • Contracts are long-life with high credit
Slide 19: Gas Services – overview
Gas Services – overview • Operational excellence ALBERTA ‒ 97% reliable (2015) • Positioned in active and emerging NGL rich plays FORT MCMURRAY • Provide gas gathering, compression and shallow/deep cut processing services • Nine facilities in service CUTBANK COMPLEX • Q4 2015 average processing volu
Slide 20: Growing volumes in Gas Services
Growing volumes in Gas Services 800 2013 Q4: Saturn I (200 MMcf/d) 2014 Q4: Musreau II (100 MMcf/d) 700 2014 Q4: Resthaven (134 MMcf/d(1)) 2015 Q3: SEEP (60 MMcf/d) 600 2015 Q3: Saturn II (200 MMcf/d) 500 MMcf/d 400 300 200 100 - 2009 2010 2011 2012 2013 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 (2) Gas
Slide 21: Duvernay I gas plant development
Duvernay I gas plant development • Development of a new 100 MMcf/d shallow cut gas plant, with expected NGL extraction capacity of ~5,500(1) bpd ‒ Facility will be located near Pembina’s Fox Creek Terminal ‒ Underpinned by a large, diversified, investment grade customer • Expected capital cost of ~$
Slide 22: Field processing capacity expanding to meet customer demand
Field processing capacity expanding to meet customer demand 1,800 1,567 90 1,600 1,400 ~300% increase in capacity since Gas Service’s inception 100 100 100 MMcf/d 80 70 1,200 60 200 Mbpd (NGL & C5) 60 1,000 50 MMcf/d 100 800 200 40 134 600 30 50 400 205 20 200 10 318 - – Cutbank Musreau Deep Shallow
Slide 23: NGL Midstream – overview
NGL Midstream – overview Gas Processing Plant Fractionator Redwater West: Midstream Storage Facility • 73 mbpd NGL fractionator and 7.3 mmbbls of finished product Truck Terminal Rail Terminal cavern storage Pembina Pipelines Third Party Pipelines • Industry-leading rail-based terminal (largest NGL r
Slide 24: Significantly growing our NGL fractionation capacity
Significantly growing our NGL fractionation capacity 300 ~257 RFS II mbpd 250 • New $415 million 73 mbpd C2+ fractionator ‒ RFS II has begun commissioning activities 200 55 • Committed take-or-pay revenue streams for 10-year term from in-service date, for 97% of the operating capacity • Expected on-
Slide 25: NGL salt cavern storage potential
NGL salt cavern storage potential ~28 Substantial storage cavern 30.0 MMbbls development potential • Cavern development: 25.0 • At Redwater ‒ 12 caverns in-service 20.0 ‒ 2 in development • Significant demand in west and east 15.0 1.0 10.0 13.7 5.0 - In Service RFS Under Development RFS Growth Poten
Slide 26: Crude Oil Midstream – overview
Crude Oil Midstream – overview • Develop and provide terminal, hub & storage services to ALBERTA ALBERTA support the energy industry • 310 mbbls of above ground crude oil and condensate FORT MCMURRAY storage capacity, with 550 mbbls under construction; TAYLOR expansion potential to 1,500 – 2,000 mbb
Slide 27: Strong Financial Platform
STRONG FINANCIAL PLATFORM
Slide 28: Financial objectives – overview
Financial objectives – overview 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
Slide 29: Access to capital at attractive rates
Access to capital at attractive rates Medium term notes (2013-YTD) Preferred shares (2013-YTD) Common shares (2013-YTD) $700 $700 $700 $600 $600 $600 $600 $600 $600 $500 $500 $500 $460 $400 $400 $373 $MM $400 $345 $MM $MM $321 $286 $300 $300 $300 $266 $250 $250 $250 $200 $225 $200 $170 $200 $200 $15
Slide 30: Funding plan and capital structure is equipped for growth
Funding plan and capital structure is equipped for growth Funding plan (2016 - 2017)(1) Capital structure (December 31 2015) $3.5 $3 billion (2016 – 2017) $3.0 Preferred 30% $2.5 Credit Facility DRIP Expansion ($750 MM) $2.0 Cash Flow (Net of Dividends) $BB Capital 1% 59% $1.5 Expenditures Secured 1
Slide 31: Clean balance sheet
Clean balance sheet 7.0x 6.0x 5.0x Debt / EBITDA (2015A) 4.0x 3.0x 2.0x 1.0x - BBB BBB+ A- BBB BBB+ A- A Ba2 BBB NR Pembina continues to employ less leverage than its peers Source: RBC Capital Markets, Bloomberg. See "Non-GAAP & additional GAAP measures." 31
Slide 32: Summary
SUMMARY
Slide 33: Our businesses in 2018
Our businesses in 2018 Now…… In 2018……. Conventional Pipelines • Largest conventional crude oil and NGL feeder system in Canada ~9,100+ km network • 12% increase in km (adding 1,120+ km with Phase III and laterals) Fox Creek to Namao capacity at 365 mbpd • ~90% increase in Fox Creek to Namao capacit
Slide 34: Key take-away: we are doing the important things right
Key take-away: we are doing the important things right Assets Growth Stable Well-financed Responsible Value Strategically Sector leading Growing our Strong Working for History of located growth highly balance the interests generating infrastructure portfolio: contracted sheet, of all shareholder ser
Slide 35: We continue driving shareholder value
We continue driving shareholder value 380 % total shareholder return* * Jan 1, 2005 – Dec 31, 2015, inclusive of dividends reinvested 5.5 % CAGR in dividends per share* * 2005 - 2015 $4.1 billion in dividends paid since inception* * To December 2015, Pembina began paying dividends in 1997 15 % avera
Slide 36: 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 37: Contract overview by business
Contract overview by business Conventional Pipelines Gas Services • Pembina is flexible to offer commercial framework to support customers’ needs • Pembina is flexible to offer commercial framework to support customers’ needs • Standard terms for pipeline transportation agreements include: • Standar
Slide 38: Non-GAAP and additional GAAP measures
Non-GAAP and additional GAAP measures This presentation uses certain terms that are not "operating margin" (gross profit before depreciation GAAP measure, see Pembina's Management's defined by GAAP but are used by management of and amortization included in operations and Discussion and Analysis for