Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — Kinder Morgan 2014 Analysts Conference
36 slides from Kinder Morgan's conference presentation, Jan 29, 2014
Slide 1: Terminals
Terminals John Schlosser President Terminals Group
Slide 2: Terminal Network
Terminal Network Largest Independent Terminal Operator in North America KM Terminals Segment Facilities Bulk 82 Terminals Liquids 40 Terminals Transload 10 Transload Operations 2
Slide 3: Historical Growth
Historical Growth (a) ($ in thousands) 2011 2012 2013 2014 Actual Actual Actual Budget Earnings before DD&A (excluding APT) 701,042 752,303 797,875 969,095 Revenue (net) $1,298,507 $1,343,294 $1,388,319 $1,626,278 Opex $598,212 $587,713 $576,822 $624,298 EBITDA $700,295 $755,580 $811,497 $1,001,980
Slide 4: Contract Diversification
Contract Diversification Liquids Revenue Breakout (a) Bulk Revenue Breakout (a) (d) Top-10 Customers (a) 4.1-yr Avg. Contract Life (b) Top-10 Customers $497MM Liquids 4.2 Years Total Revenue (c) $1,626MM Bulk 4.1 Years __________________________ (a) 2014 budget (b) 2014 budget weighted average, as o
Slide 5: Bulk Tonnage
Bulk Tonnage Variance ('14 vs '13) Actual Budget Amt % 2013 2014 Coal 33,489,763 42,653,512 9,163,748 27.4% Ores/Metals (Bulk & Break-Bulk) 24,611,841 25,957,581 1,345,739 5.5% Petcoke 10,808,429 14,377,923 3,569,494 33.0% KMBT Tonnage Soda Ash 4,585,962 4,678,141 92,180 2.0% (tons) Fertilizers 4,50
Slide 6: Liquids Throughput
Liquids Throughput Variance to Budget Actual Budget Amt % 2013 2014 Gasoline 334,811,713 400,448,520 65,636,807 19.6% Petroleum Feedstocks (a) 46,429,464 219,053,233 172,623,769 371.8% Distillate 134,720,953 117,123,544 (17,597,409) -13.1% Fuel Grade Ethanol / Bio-diesel 64,956,249 65,927,648 971,39
Slide 7: Major Projects – Backlog
Major Projects – Backlog Modeled Capacity Capital First Full Year Expected Avg. Contract Project Name Product (MMBbl) * (MM) EBITDA In Service Length ** Edmonton Tank Expansion Phase I *** Crude 3.4 $308.7 $34.9 Q4/13 - Q1/14 12 Edmonton Tank Expansion Phase II *** Crude 1.2 $111.9 $16.8 Q3/14 - Q4/
Slide 8: Major Projects – Placed In-Service in 2013
Major Projects – Placed In-Service in 2013 Modeled LIQUIDS Capacity Capital First Full Avg. Contract Project Name Product (MMBbl) * (MM) Year EBITDA In Service Length ** Ethanol tank and truck bay (Pasadena, TX) Ethanol 0.1 $7.9 1 4/7 Q1/13 N/A UAN Handling (Fairless Hills, PA) UAN 0.1 $6.3 3/4 Q3/1
Slide 9: Crude
KINDER/MORGAN Crude
Slide 10: Canadian Crude Oil
Canadian Crude Oil Canadian Oil Production Forecast Uncertainty Around Pipeline Development Driving Rail Investment Western Canadian conventional and oil sands supply is increasing, beyond earlier forecasts Outbound pipeline takeaway capability isn’t keeping pace Regulatory issues playing a ma
Slide 11: KM Terminal Response
KM Terminal Response Expansion of Rail Take-away Capacity and Merchant Tankage Rail Terminals Future Capacity Increases Edmonton Rail Terminal Edmonton Rail Terminal Expansion 50-50 joint venture with Imperial Oil Incremental capacity as much as 150 MBbl/d Base scope accommodates 1-3 unit trai
Slide 12: U.S. Crude Oil
U.S. Crude Oil US crude oil production is projected to hit 9.5 Increases (a) driven by: MMBbl/d by 2016 according to the EIA, — Permian (projected to hit 2 MMBbl/d in 2020); approaching the historical record volume of 9.6 — Eagle Ford TX, (1.76 MMBbl/d by 2020); — Bakken growth (1.73 MMBbl/d) MM
Slide 13: U.S. Crude Oil Situation
U.S. Crude Oil Situation (a) Estimated 425K carloads in 2013 Light crude production will increase out of the The delta between originated and terminated Eagle Ford and Permian, and will saturate the carloadings will increase as more Canadian Gulf Coast with its predominate medium to crude ente
Slide 14: KM Response
KM Response Expansion of Rail Receipt Capacity and Merchant Tankage Tankage and Connectivity Selected Opportunities Deeprock (Cushing, OK) KWX - PNW and Northeast Crude Tallgrass Energy obtained FERC approval to convert the Pony Express Pipeline to crude service - Deeprock Development JV is Ot
Slide 15: KM Response: APT / SCT Tanker Acquisition
KM Response APT / SCT Tanker Acquisition American Petroleum Tankers (“APT”) Experienced Leadership Team at KM – 5 existing medium-range Jones Act qualified Rob Kurz product tankers – Joined APT in January 2010 (CEO) – 49,000 DWT per vessel (approx. 330,000 Bbl) – Over 30 years of experience in marit
Slide 16: APT / SCT Tanker Acquisition (Cont'd)
KM Response APT / SCT Tanker Acquisition (Cont’d) A number of favorable supply and demand factors are currently impacting the Jones Act trade: — Significant U.S. shipyard capacity constraints and long-lead delivery schedules — Stringent charterer vetting requirements takes supply out of market via
Slide 17: APT / SCT Tanker Acquisition (Cont'd)
KM Response APT / SCT Tanker Acquisition (Cont’d) Remain. Contract Length (yrs.) Built/ Current Charterer/ Without With Vessel Delivered Forward Charterer Renewals Renewals 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Remaining Golden State Jan-09 Major Integrated 2 5 Renewal Term(s) Contr
Slide 18: Petroleum
KINDER/MORGAN Petroleum
Slide 19: Gulf Coast Crude Delivery Capacity
Gulf Coast Crude Delivery Capacity Houston – the bucket at the bottom of the crude cascade — 4.5 MMBbl/d of increased pipeline delivery capacity from 2010 to 2015 — Represents roughly 50% of approximately 9.0 MMBbl/d USGC refining capacity 5,000 Cushing 26% • Seaway Thousand barrels per day 4,500
Slide 20: Gulf Coast Crude Runs
Gulf Coast Crude Runs 9,000 Thousand barrels per day 2013 runs at historical high 8,500 — Recent expansions — 7.9 MMBbl/d in 2013 8,000 7,500 Increasing domestic crude — 2013 imports have fallen to 7,000 less than 4 MMBbl/d 6,500 5-yr Range 5-yr Average 2012 2013 — Displaced light imports — Decr
Slide 21: Refined Product Trade Balance
Refined Product Trade Balance U.S. – Shifted from a net importer to exporter of refined product — Gasoline net imports have fallen nearly 1 MMBbl/d — Distillate net exports have grown to 1 MMBbl/d 2,500 Thousand barrels per day 2,000 1,500 1,000 500 - (500) (1,000) (1,500) (2,000) (2,500) 1991 199
Slide 22: Gasoline Exports
Gasoline Exports Gulf Coast accounts for 88% of gasoline exports Africa Asia 4% 5% 600 526 506 508 Other Mexico Americas 45% 500 35% Canada 11% 400 335 (MBbl/d) 300 210 Padd 5 Padd 1 Padd 2 200 9% 1% 2% 100 0 Padd 3 2009 2010 2011 2012 2013 88% __________________________ Source: EIA – (2013 data t
Slide 23: Distillate Exports
Distillate Exports Gulf Coast accounts for 78% of diesel exports Asia Mexico Canada 2% 10% Europe 2% 1200 35% 1,095 1,007 1000 Other 853 Americas 49% 800 654 Africa (MBbl/d) 587 2% 600 Padd 5 Padd 1 400 11% 11% 200 0 Padd 3 2009 2010 2011 2012 2013 78% __________________________ Source: EIA – (201
Slide 24: Executing In the Pipeline
KM Response Executing In the Pipeline BOSTCO Pasadena / Galena Park — Phase I – 6.2 MMBbl of black oil Infrastructure storage plus two high-speed — 10 tanks (1.2 MMBbl) plus barge deep water ship docks, three dock and rail expansion ($116MM). barge docks (12 spots) and 24 New Projects rail spo
Slide 25: Houston Ship Channel
Houston Ship Channel GREENS PORT TERMINAL HOUSTON BULK KINDER MORGAN TERMINAL SHIP DOCK GALENA PARK KMCC GALENA PARK NORTH PLANT SPLITTER KMTT KINDER MORGAN PASADENA 9640 CLINTON DEEPWATER CRUDE BY RAIL TERMINAL TERMINAL GALENA PARK TERMINAL DEER PARK BOSTCO TERMINAL KMTT FERRO RAIL TERMINAL OPERATI
Slide 26: Ethanol
Ethanol Renewable Fuel Standard (RFS) Revisions 2013 Actual Throughput (as of November 15 2013) Actual RFS 2013 RFS Standard 2014 RFS Revisions Kinder Morgan Throughput Market Share Requirement(s) (MM Gallons) (MM Gallons) Business Segment (MM Gallons) of US Demand Cellulosic BioFuel 14 17 Terminals
Slide 27: Chemical
KINDER/MORGAN Chemical
Slide 28: KM Chemical Network
KM Chemical Network 27 Terminals (a) 10.9MM Bbl Storage Capacity 75+ Products 180+ Customers Midwest • Argo, IL • Chicago, IL Northeast • Cincinnati, OH (Queen City) Upper River • Cincinnati, OH (River T) • Carteret, NJ • Pittsburgh, PA (Dravosburg) • Perth Amboy, NJ • Cahokia, IL • Philadelphia, PA
Slide 29: U.S. Chemical Industry Renaissance
U.S. Chemical Industry Renaissance Lower natural gas prices have resulted in the increased competiveness of the U.S. chemical industry — Reversal of industry’s global competitiveness from 2012 — Direct result of higher crude-to-gas ratios Global Ethylene Capacity Cost Curve U.S. NGL Prices versus
Slide 30: U.S. Chemical Industry Investment
U.S. Chemical Industry Investment “Just the 2nd Inning” Over $70 billion in announced U.S. chemical investment as a direct result of lower feedstock prices — Predominantly in the Gulf Coast petrochemicals — Access to natural gas and NGL feedstock as well as worldwide export markets Capital Expendi
Slide 31: KM Response to the Chemical Market
KM Response to the Chemical Market Develop Develop Existing Portfolio Methanex project – leveraging existing Geismar, LA assets to provide critical marine, rail, and truck access in support of Methanex’s relocated methanol production plant Harvey Tank Expansion – adding tanks at fully-subscribed
Slide 32: Coal
KINDER/MORGAN Coal
Slide 33: International Coal Markets
International Coal Markets Thermal and Metallurgical Coal Market Conditions & Drivers U.S. remains the second largest seaborne exporter of metallurgical Global Energy Demand by Fuel (Mtoe) (a) coal behind Australia Coal overtakes oil as the worlds most consumed fuel in 2019 and is estimated to a
Slide 34: KM Response: Coal Export Expansions
KM Response: All new export capacity supported by strong, long-term take-or-pay contracts $417.6MM of Coal Terminal Expansions & Improvements: Deepwater and Penn City – Houston, Texas New Capacity = 12.7 million net tons Thermal Coal International Marine Terminal (IMT) – Myrtle Grove, LA New Cap
Slide 35: Summary Highlights
Summary Highlights Expected EBDDA growth in 2014 – 21.46% Only true national bulk and liquids terminal network Largest terminal footprint in U.S. and Canada = significant capital investment opportunities. Significant growth from opportunities currently under development – $2.3 billion in pro
Slide 36: Kinder Morgan
KINDER/MORGAN
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