Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — Investor Day (January 2013)
34 slides from Kinder Morgan's investor day presentation, Jan 30, 2013
Slide 1: Terminals
Terminals Jeff Armstrong & John Schlosser President Terminals Group
Slide 2: Terminal Locations
Terminal Locations KM Terminals Segment Facilities Bulk 83 Terminals Liquids 27 Terminals Crude by Rail 3 Terminals KMMS 35 Transload Operations 2
Slide 3: Historical Growth
Historical Growth (a) ($ in thousands) 2010 2011 2012 2013 Actual Actual Actual Budget Earnings before DD&A 646,608 701,042 752,303 838,662 Revenue (net) $1,244,810 $1,298,507 $1,343,294 $1,462,243 Opex $591,547 $598,212 $587,713 $609,531 EBITDA $653,263 $700,295 $755,580 $852,712 Book Income Tax $6
Slide 4: Contract Diversification
Contract Diversification Liquids Revenue Breakout (a) Bulk Revenue Breakout (a) Vegetable & Other Building Materials Salt Oils Other Soda Ash 3% 2% 3% Liquids Biodiesel Petroleum Crude / 2% 1% 3% Fertilizer - Bulk Semi-Refined 7% 8% Ores/Metals Other Bulk 29% Ancillaries 8% 13% Refined Petroleum Anc
Slide 5: Bulk Tonnage
Bulk Tonnage Variance ('13 vs '12) Actual Actual Budget Amt % 2011 2012 2013 Coal 39,007,386 37,938,692 44,278,376 6,339,684 16.7% Petcoke 11,507,104 11,606,300 12,011,898 405,598 3.5% Cement (Including Clinker) 587,091 612,200 605,100 (7,100) -1.2% Fertilizers 5,242,264 4,565,945 5,435,509 869,564
Slide 6: Liquids Throughput
Liquids Throughput Variance ('13 vs '12) Actual Actual Budget Amt % 2011 2012 2013 Chemical 22,577,323 24,387,573 27,905,096 3,517,523 14.4% Distillate 151,966,348 150,115,473 177,638,881 27,523,408 18.3% Gasoline 331,943,826 338,491,516 357,099,961 18,608,445 5.5% Throughput Fuel Grade Ethanol / Bi
Slide 7: Major Projects - Board Approved and in Progress
Major Projects - Board Approved and in Progress Modeled Capacity Capital First Full Expected Avg. Contract Project Name Product (MMBBLS) (MM) Year EBITDA In Service Length* Tank Expansion Phase I (Edmonton, Alberta) ** Crude 3.6 $309.4 $37.0 Q4/13 12.2 Tank Expansion Phase II (Edmonton, Alberta) **
Slide 8: Petroleum
KINDER/MORGAN Petroleum
Slide 9: Total U.S. Refining Utilization Rate (%)
Total U.S. Refining Utilization Rate (%) 2012 Average is 87.7% __________________________ Source: Morgan Stanley, Refining & Marketing, 2012 Year-End Review, Refiners Almost a Double, December 23, 2012 9
Slide 10: Gulf Coast PADD III Refinery Utilization
Gulf Coast PADD III Refinery Utilization 2012 Average is 89% Operable Capacity 100% 95% 90% 85% 80% 75% 4-Week Average Term Average __________________________ Source: EIA 10
Slide 11: Houston – the bucket at the bottom of the crude cascade
Houston – the bucket at the bottom of the crude cascade Pipeline capacity from Mid-Con & West / South Texas (Kbd) __________________________ Source: Deutsche Bank, Global Equities: The Future of U.S. Oil, 2013 Update, Paul Sankey & David Clark, December 2012 11
Slide 12: Finished Gasoline Exports
Finished Gasoline Exports Finished Motor Gasoline – Export Destination (% of May – Oct, 2012 Daily Average) Africa Canada 2% Europe 5% 1% 500 450 479 Latin / S. America 400 418 92% 350 300 MB/D 296 250 200 Finished Motor Gasoline – U.S. Export Location 150 (% of May – Oct, 2012 Daily Average) 100 PA
Slide 13: Distillate Exports
Distillate Exports Distillate Fuel Oil – Export Destination (% of May – Oct, 2012 Daily Average) Canada, Africa, 2% 1% Asia, 1% 1200 Europe, 37% Latin / S. 1000 1052 America, 59% 800 853 MB/D 600 654 400 Distillate Fuel Oil – U.S. Export Location (% of May – Oct, 2012 Daily Average) 200 PADD IV, PAD
Slide 14: KM Response
KM Response SPLITTER HOUSTON EXPORT FACILITY 50,000 MB/D condensate splitter at KM Galena Park, TX Acquisitions of 42 acres from AES in Pasadena, TX $266MM Project ($75MM on Terminal side / $191MM on $169MM project – 100% KM Ownership KMPP side) – 100% KM Ownership New vessel and barge doc
Slide 15: U.S. Ethanol Demand Forecast
U.S. Ethanol Demand Forecast 2012 2013P KM Terminals Ethanol Handling Storage (MBbls) 4,614 4,854 Throughput (Bbl/d) 173,101 183,559 KM Products Pipeline Ethanol Handling Storage (MBbls) 1,624 1,624 Throughput (Bbl/d) 90,816 100,548 U.S. Ethanol Demand Throughput (Bbl/d) 867,579 867,579 © 2012 Houst
Slide 16: Canadian Crude Tankage
KINDER/MORGAN Canadian Crude Tankage
Slide 17: Canadian Crude Market Fundamentals
Canadian Crude Market Fundamentals Western Canadian conventional and oil sands supply is still increasing Several major pipeline projects under development but still risk of completion Pipeline infrastructure constraints will continue for the next 3 to 4 years, possibly longer U.S. tradition
Slide 18: KM Response
KM Response Build Edmonton AB Merchant Tankage Kinder Morgan’s Edmonton Terminal: Trans Mountain Operational 2.5 MM Bbls North 40 Merchant 2.1 MM Bbls Edmonton Merchant Phase 1 3.6 MM Bbls Under construction – completion Q4-2013 Total Capital = $309.4 MM Edmonton Merchant Phase 2 1.2 MM Bbls
Slide 19: Crude by Rail
KINDER/MORGAN Crude by Rail
Slide 20: U.S. Crude-by-Rail Trends
U.S. Crude-by-Rail Trends U.S. Crude Oil Production Originated Rail Carloads of Crude Petroleum Bbls/day since 2008, by Month; 2013-2014 Projected (red) U.S. Class I Railroads, 2003-12 8,000 7,922 (EIA 2014) 250,000 7,500 203,585 200,000 7,000 6,500 5,110 (Jan ’08) 150,000 6,000 100,000 5,500 65,751
Slide 21: KM-Watco Crude-by-Rail Joint Venture
KM-Watco Crude-by-Rail Joint Venture Current Terminals Current Projects 21
Slide 22: KM Response
KM Response Pending KWE JV Projects 50/50 Gulf Coast New crude oil receipt terminal, Houston Ship Channel. Large international trading house as counterparty Watco-owned facility Crude in by rail, out by barge and pipe. Condensate in by barge, out by rail. 250,000 bbls storage, 105 car un
Slide 23: Coal
KINDER/MORGAN Coal
Slide 24: Domestic Coal Markets
Domestic Coal Markets Sustained competition of natural gas drives reduced coal Forecasted Coal Power Reduction by 2018 (GW) demand in the U.S. Retirement of coal fired power plants and increased environmental regulations on current plants Between 30 to 40 GW of coal fired capacity are expected
Slide 25: International Steam Coal
International Steam Coal Market Conditions & Drivers New coal powered utilities under construction around the world Shares of World Primary Energy to provide 470 GW of power by 2015 and represent 1.4B new tons of demand. China and India’s net import coal demand is projected to increase 1.2B tons
Slide 26: International Metallurgical Coal
International Metallurgical Coal Market Conditions & Drivers Total Seaborne Demand of Met Coal Steel production forecasted to grow 20% worldwide between 2011 and 2016 needing an additional 200 Mts of metallurgical coal (Millions of Tons) The U.S. is second only to Australia in metallurgical coal
Slide 27: KM Response
KM Response East Coast (1) Pier IX, Newport News VA expected capital outlay = $29.3 mm 1.5 mm tons per year U.S. Gulf (2) International Marine Terminal, Myrtle Grove LA – Phase 1 expected capital outlay = $49.1 mm (a); 6.0 mm tons (3) International Marine Terminal, – Phase 2 expected capital outlay
Slide 28: Chemical
KINDER/MORGAN Chemical
Slide 29: KM Chemical Network
KM Chemical Network KMMS • Dravosburg, PA – Pittsburgh Mid West • Argo, IL • Chicago, IL • Cincinnati, OH (Queen City) • Cincinnati, OH (River T) Northeast West • Carteret, NJ • Richmond • Perth Amboy, NJ • Philadelphia, PA Mid River • Memphis, TN • Blytheville, AR Mid Atlantic / Southeast • Gunters
Slide 30: Significant Impact of North American Shale Gas Production on U.S. Chemical Industry
Significant Impact of North American Shale Gas Production on U.S. Chemical Industry Global Capacity Cost Curve U.S. Ethane Production Cost of Ethylene Production __________________________ Source: LyondellBasell 30
Slide 31: U.S. Shale Gas
U.S. Shale Gas Triggering a Chemical Building Boom Dow, St. Charles, LA cracker restart operational 2013 Dow ethane flexibility project in LA Dow “world-scale” PDK / propylene production facility & ethylene plant in Freeport, TX LyondellBasell LaPorte olefins expansion 800mmp ethylene increa
Slide 32: KM Response to the Chemical Market
KM Response to the Chemical Market Develop Geismar, LA New chemical terminal expansion on 200+ acres with marine, rail, and terminal connectivity. 720kb capacity including 3x220kb storage tanks and 3 processing tanks. Capital investment of $54MM with target start-up in late 2014. Honeywell, Phil
Slide 33: Summary Highlights
Summary Highlights CAGR since 2002 – 12.28% Only true national bulk and liquids terminal network Largest terminal footprint in USA and Canada = significant capital investment opportunities. Significant growth from identified opportunities currently under development - $1.4B in progress. Addi
Slide 34: KINDER/MORGAN
KINDER/MORGAN