Pembina Pipeline Corporation · TSX:PPL
Pembina Pipeline — Corporate Update (August 2015)
39 slides from Pembina Pipeline's corporate update, August 2015
Slide 1: August 2015 Corporate Update Presentation
August 2015 Corporate Update Presentation PEMBINNG TSX: PPL; NYSE: PBA
Slide 2: Forward-looking statements and disclaimer
This presentation is for information purposes only and is demand and pricing and supply and demand for factors should not be construed as exhaustive. not intended to, and should not be construed to constitute, hydrocarbon services. Undue reliance should not be placed The forward-looking statements c
Slide 3: Pure play energy infrastructure company
Pure play energy infrastructure company that allows │ investors to participate in the oil and natural gas Common shares outstanding(1) 344 million liquids industry across Canada and North Dakota. We: TSX common share trading price(1) $37.60 are well-positioned for growth TSX 52-week trading range(
Slide 4: Continental presence with focus on WCSB and Bakken
Gas Processing Plant Redwater Fractionator 8,800 km network transports hydrocarbon Midstream Storage Facility products and extends across much of Alberta Truck Terminal and parts of British Columbia, Saskatchewan Pembina Conventional Pipelines and North Dakota Pembina Oil Sands Pipelines Third Party
Slide 5: Business unit integration creates exceptional customer service
Conventional Gas Services Pipelines Midstream • Gathering and processing Mainline Extraction • Transportation on Conventional Pipelines Gathering, • Fractionation at Redwater Production Processing, HVP Feeder Propane export Consumption Field Pipelines Terminalling Logistics Extraction Fractionation
Slide 6: Strong franchise areas create competitive advantages
ALBERTA SASKATCHEWAN OIL SANDS MONTNEY (Resource life 200+ years) (Resource Life TAYLOR ~170 years) FORT MCMURRAY SEAL & PELICAN LAKE DEEP BASIN SWAN HILLS (Resource Life ~23 years) Fort Saskatchewan EDMONTON DUVERNAY (Resource Life CARDIUM ~500 years) (Resource Life ~40 years) EMPRESS Conventional
Slide 7: Committed capital projects and capital relative to TEV
Projects (all fee-for-service) Capital (C$MM) Phase II NGL/Crude Expansions $ 695 Phase III Pipeline Expansions(1) $ 2,440 NEBC Expansion(1) $ 220 40% Vantage Expansion (1) $ 85 37% Laterals $ 400 35% Conventional Pipelines Subtotal $ 3,840 Musreau III Facility $ 105 SEEP $ 110 30% Committed Capital
Slide 8: Committed capital expected in-service dates and timelines
Committed Capital Expected In-Service Date* Expected Project Timelines* $4,500 Musreau III ~$1.4 ~ $3,988 MM billion of capital Saturn II $4,000 expected to be put SEEP into service in 2015 Resthaven Expansion $3,500 Phase II Expansion $3,000 Phase III Expansion Other Laterals $MM $2,500 NEBC Expans
Slide 9: Over 80% of EBITDA fee-for-service by 2018
14% 4% $700-$1,000 million 14% 22% 64% 82% 2014 2018 Fee-for-Service / Cost-of-Service Product Margin Frac Spread In excess of 80% of EBITDA is expected to be generated from fee-for-service contracts in 2018 * Based on approximately $6 billion of committed capital projects with in-service dates betw
Slide 10: Strong history of growing dividend and adjusted cash flow per share
$2.50 $2.00 (1) CAGR in ACFPS BBB CAGR in Dividend per Share 2005 – 2014 2005 – 2014 $1.50 $1.00 $0.50 $- 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Dividends per share Adjusted cash flow from operating activities per share Strong history of growing Pembina’s dividend and adjusted cash flow p
Slide 11: PEMBINN'
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Slide 12: All third-party contracts are firm with no exit provisions
Conventional Pipelines Gas Services • Pembina is flexible to offer commercial framework to support customers’ • Pembina is flexible to offer commercial framework to support customers’ needs needs • Standard terms for gas processing agreements include: • Standard terms for pipeline transportation agr
Slide 13: Leader in conventional hydrocarbon products gathering business
• Pipeline operational excellence: 99% reliable ALBERTA • Proximal to prolific geology FORT TAYLOR DUNVEGAN MCMURRAY • Q2 2015 throughput: 603 mbpd (~5% increase from Q2 2014) FORT ST JOHN • 2014 throughput: 575 mbpd (~17% increase from 2013) VALLEYVIEW • Connected to refineries, export pipelines, f
Slide 14: Year-to-date 2015 throughput highest in Pembina's history
• Solid industry performance and strategically located assets have led to strength in Pembina's throughput profile • February 2015: reached a weekly all-time high peak throughput of over 650,000 bpd 618 mbpd 575 mbpd 492 mbpd 650 456 mbpd 600 417mbpd 550 393 mbpd 374 mbpd 500 450 mbpd 400 350 300 25
Slide 15: Phase II and Phase III Expansions
ALBERTA Phase III Expansion Phase II HVP& LVP Expansions Phase III Expansion (under construction) • Project consisted mainly of pump stations, Completed Phase III Expansion segment storage enhancements and pipeline Previously announced Phase II Expansion reconfiguration work Pembina crude oil and co
Slide 16: Vantage Pipeline, SEEP and Vantage Expansion
Vantage Pipeline, SEEP and Vantage Expansion • Acquisition cost: $730 million(1) • ~ 700 km ethane pipeline originates in Tioga, North EDMONTON Dakota and terminates near Empress, Alberta Fort Saskatchewan Petrochemical Complex • Current capacity of 40,000 bpd Joffre Petrochemical Complex − Expansio
Slide 17: Visibility to almost tripling capacity on Conventional Pipelines
1,600 ~1,508 mbpd 1,400 1,200 420 1,000 (mbpd) 800 55 53 52 40 600 175 400 200 453 – Pre-Expansion Phase I Phase II Phase III Phase III (Ultimate Capacity) Phase III (2010) (in-service) (LVP in-service April 2015 & (late 2016 to mid 2017) (combined system capacity) HVP in-service mid 2015) Crude Oil
Slide 18: One of Canada's largest oil sands and heavy oil pipeline operators
Syncrude Pipeline • Operational excellence Horizon Pipeline Cheecham Lateral − 99+% reliable over operating history Nipisi Pipeline Mitsue Pipeline • Diverse connectivity to various industry hubs for crude oil Peace Pipeline and condensate • Contracts are long-life with high credit worthy counterpar
Slide 19: Horizon Pipeline expansion
• Pembina plans to expand the existing Horizon Pipeline System to 250 mbpd as requested by the anchor tenant CNRL1 • Expansion includes upgrading of mainline pump stations and other facility modifications for an expected capital cost of $125 million • Expected to be in-service mid-2016, subject to r
Slide 20: Gas Services: Deep Basin gas processing
• Operational excellence ALBERTA − 96% reliable • Positioned in active and emerging NGL rich plays FORT MCMURRAY • Provide gas gathering, compression and shallow/deep cut processing services − Seven facilities in service CUTBANK COMPLEX • Q2 2015 average processing volume: (MUSREAU I, II & III) − 64
Slide 21: Gas Services is one of Pembina's fastest growing businesses
700 Resthaven & Musreau II: in service Q4 2014 600 500 Saturn I: in service Q4 2013 400 MMcf/d 300 200 100 - 2009 2010 2011 2012 2013 2014 Q1 2015 Q2 2015 Gas processing volume* Gas Services is one of Pembina's fastest growing businesses 21 * Volumes at Musreau exclude deep cut processing as those v
Slide 22: Working to become Canada's largest third party gas processor
1,600 80,000 1,400 100 70,000 100 100 1,200 200 60,000 200 NGL and C5 Output (bpd) 1,000 60 60 60 60 50,000 100 MMcf/d 130 800 40,000 200 600 50 growth in contracted 30,000 growth in contracted capacity by mid-2016 400 205 20,000 capacity by mid-2016 200 10,000 318 – – Cutbank Musreau Shallow cut Sa
Slide 23: Leading position in Canadian NGL markets
Gas Processing Plant Redwater Fractionator • 73 mbpd NGL fractionator and 7.9 MMbbls of finished product Midstream Storage Facility Truck Terminal cavern storage Rail Terminal Pembina Pipelines • Industry-leading rail-based terminal (largest NGL rail yard in Third Party Pipelines Canada) with unit t
Slide 24: Aim to triple fractionation capacity at Redwater with RFS III
300 RFS II • New $415 million 73 mbpd C2+ fractionator 250 • Committed take-or-pay revenue streams for 10-year 55 term from in-service date, for 97% of the operating 200 capacity 9 • Expected on-stream date in Q1 2016 mbpd 150 73 • Ethane produced at RFS II will be sold under a long- term arrangemen
Slide 25: Terminalling services for Sturgeon Refinery
• Provide terminalling services for Sturgeon Refinery (North West Redwater Partnership) under a 30-year fixed return agreement and a 10-year NGL mix purchase and sale agreement related to RFS III • Expected capital cost of $180 million to construct terminalling facilities, including: truck and rail
Slide 26: Pembina continues to steadily wash caverns
Substantial storage cavern 40 ~38 development potential MMbbls 35 30 Cavern development: (MMbbls) 25 • At Redwater 20 2.6 15 – 13 caverns in-service 10 17.5 – 5 in development 5 • Significant demand in west 0 In-Service RFS Under Development RFS Potential Growth Corunna Potential Growth Total and e
Slide 27: Crude oil midstream and Nexus Terminal
ALBERTA • Develop and provide terminal, hub & storage services to support the energy industry FORT MCMURRAY • 630 mbbl of above ground crude oil and TAYLOR condensate storage capacity, with 540 mbbl under construction; expansion potential to over 3,000 mbbl • Access to over 1,150 mbpd through connec
Slide 28: Canadian Diluent Hub interconnectivity
CANADIAN DILUENT HUB Crude oil Dilbit Synthetic Crude Diluent Heavy Export Red indicates Pembina-owned existing and proposed pipelines and connections Dashed lines and/or grey text indicates proposed projects whereas black indicates existing assets Interconnectivity between conventional, heavy oil,
Slide 29: Strong financial position
=) —— “a STRONG FINANC w PEMBINAN'
Slide 30: Excellent access to capital
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 have excellent access to capita
Slide 31: Medium term notes, preferred and common share financings
Medium term notes (2013-YTD) Preferred shares (2013-YTD) Common shares (2013-YTD) 700 700 $700 $600 $600 $600 600 600 $600 500 500 $500 Millions($) 400 Millions($) 400 $345 $MM $400 $321 $286 $266 300 300 $300 $250 $250 $250 $214 $225 $200 200 200 $150 $200 100 100 $100 0 0 $0 Jul-2013 Oct-2013 Jan-
Slide 32: Committed to financial discipline: funding plan
Funding Plan through 2017 Capital structure at June 30, 2015 (1) $6,000 $5 B (2015 – 2018) $5,000 27% $4,000 Debt $MM $3,000 Capital Preferred 9% 61% Expenditures $2,000 DRIP 3% Common $1,000 Cash Flow (Net of Dividends) - Common Share Convertible Debt Preferred Shares Debt Potential Uses Potential
Slide 33: Significantly less leverage than peers
8.0x 7.0x 6.0x 5.0x Debt / EBITDA 4.0x 3.0x 2.0x 1.0x 0.0x BBB+ (S&P) A- (S&P) BBB (S&P) BBB+ (S&P) A (S&P) BBB (S&P) BBB+ (S&P) A- (S&P) BBB (S&P) Ba2 (Moody's) NR BBB+ A- BBB BBB+ A BBB BBB+ A- BBB Ba2 NR Pembina continues to employ significantly less leverage than its peers (1) Source: RBC Capita
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Slide 35: Growth in asset base across business units
Conventional Pipelines • Largest conventional crude oil and NGL feeder system in Canada 8,800 km network • 13% increase in km (adding 1,120+ km with Phase III and laterals) Fox Creek to Namao capacity at 260 mbpd • 162% increase in Fox Creek to Namao capacity (to 680 mbpd+) Midstream • Largest fract
Slide 36: Total shareholder return and dividend growth
487 % total shareholder return* * Jan 1, 2005 – Dec 31, 2014, inclusive of dividends reinvested 5.8 % CAGR in dividends per share* * 2005 - 2014 $3.4 billion in dividends paid since inception* * To December 2014, Pembina began paying dividends in 1997 17 % average compound annual return* * Jan 1, 20
Slide 37: Doing the important things right to double EBITDA in 2018
Strategically Sector leading Growing our Strong Working for History of located growth highly balance the interests generating infrastructure portfolio: contracted sheet, of all shareholder serving long- ~$6.4 billion of and stable investment- Pembina's value and life committed cash flow; grade credi
Slide 38: Contact details
www.pembina.com investor-relations@pembina.com Toll Free: 1-855-880-7404 Phone: (403) 231-3156
Slide 39: Non-GAAP and additional GAAP measures
This presentation uses certain terms that are not and the additional GAAP term "operating alternative to net earnings, cash flow from defined by GAAP but are used by management margin" (gross profit before depreciation and operating activities or other measures of of Pembina to evaluate Pembina's pe