Pembina Pipeline Corporation · TSX:PPL
Pembina Pipeline — Investor Day (March 2015)
114 slides from Pembina Pipeline's investor day presentation, March 2015
Slide 1: Pembina Pipeline Corporation 2015 Investor Day
PEMBINA PIPELINE CORPORATION 2015 INVESTOR DAY “DOING THE IMPORTANT THINGS RIGHT” TSX: PPL; NYSE: PBA
Slide 2: Our team presenting today
Our team presenting today AGENDA PRESENTER Mick Dilger Overview & Value Proposition Mick Dilger President & Chief Executive Officer Market Dynamics Scott Burrows Scott Burrows Crude Oil Value Chain Focus Paul Murphy Vice President, Finance & Chief Financial Officer Major Project Execution Michael Ma
Slide 3: Forward-looking statements & information
Forward-looking statements & information 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 b
Slide 4: Overview & Value Proposition
OVERVIEW & VALUE PROPOSITION Mick Dilger
Slide 5: Pembina: a unique investment opportunity
Pembina: a unique investment opportunity Pure play energy infrastructure company that allows TSX: PPL│NYSE: PBA investors to participate in the oil and natural gas Common shares outstanding(1) 339 million liquids industry across Canada and North Dakota. We: TSX common share trading price(1) $40.91
Slide 6: Our assets and businesses at a glance
Our assets and businesses at a glance Gas Processing Plant Conventional Pipelines 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 Pipel
Slide 7: Our assets and businesses operate in prolific geology
Our assets and businesses operate in prolific geology ATHABASCA OIL SANDS MONTNEY TAYLOR SEAL PELICAN LAKE SWAN HILLS Gas Processing Plants DEEP BASIN Redwater Fractionator EDMONTON Pembina Conventional Pipelines DUVERNAY Pembina Oil Sands/Heavy CARDIUM Oil Pipelines EMPRESS CALGARY BRITISH BAKKEN C
Slide 8: We remain confident in our strategy
We remain confident in our strategy OBJECTIVE: To provide highly competitive and reliable returns to investors through monthly dividends while enhancing the long-term value of our shares. STRATEGY: Preserve value by providing safe, cost-effective, reliable services Diversify our asset base along the
Slide 9: Doing the important things right: 2014 review
Doing the important things right: 2014 review The situation: What Pembina is doing right: • Overall, 2014 was a very strong year Secured $1.4 billion in new capital opportunities – Many opportunities for business Expanded risked and unrisked projects to $7.4 billion development Increased divid
Slide 10: Weathering the storm
Weathering the storm • Large degree of business is fee-for-service – 64 percent in 2014 and expected to increase to greater than 80 percent in 2018 – Many take-or-pay agreements customers are responsible for toll/fee payment regardless of actual volumes shipped – Re-contracted majority of existing
Slide 11: Strategic short-term and long-term strategies
Strategic short-term and long-term strategies Short-term strategy Long-term strategy EXECUTE EXTEND Target: capital cost savings of 5 Seek value chain extension percent = $250 million of savings opportunities, new emerging growth platforms, and expansions EXPLOIT Full exploitation of secured growth
Slide 12: Cumulative Capital Expenditures
We have had great success securing unrisked projects $12,000 • $1.9 billion of capital expenditures planned for 2015 Cumulative Capital Expenditures(1) ($MM) $10,000 • Announced ~$1.4 billion of new $8,000 committed capital in 2014 $6,000 $4,564 M • Growth portfolio of committed 2015+ projects has c
Slide 13: We are pursuing a fee-for-service growth portfolio
We are pursuing a fee-for-service growth portfolio Projects (all fee-for-service) Capital (C$MM) Relative Growth Project Portfolio Conventional Pipelines Phase II NGL/Crude Expansions $ 695 Phase III Pipeline Expansions (1) $ 2,440 40% NEBC Expansion(1) $ 210 Pembina has the largest committed 35% Co
Slide 14: Project timelines & in-service dates
Project timelines & in-service dates Committed Capital Expected In-Service Date* Expected Project Timelines* Musreau III $1.7 $4,000 billion of capital ~ $3,660 MM Saturn II $3,500 expected to be put SEEP into service in 2015 Resthaven Expansion $3,000 Phase II Expansion Phase III Expansion $2,500 O
Slide 15: Growing incremental operating margin
Growing incremental operating margin $1,400 Potential Incremental Operating Margin ($MM) $1,200 $1,000 Full utilization upside $800 $600 $400 $200 $0 2015 2016 2017 2018 2018+ Uncommitted Phase I & II Pipeline Phase III Pipeline Saturn II Resthaven II Expansion Musreau II & III Heartland Development
Slide 16: We are continuing to de-risk our business
We are continuing to de-risk our business $700-$1,000 4% 14% 14% million of potential incremental EBITDA 22% generated per year on a run-rate basis once 64% 82% Pembina's committed projects are all in-service* 2014 2018 Fee-for-Service / Cost-of-Service Product Margin Frac Spread In excess of 80% of
Slide 17: Evolution of Pembina's acquisitions
Evolution of Pembina’s acquisitions EV/NOI multiple at acquisition date Current EV/NOI multiple 11.6X 11.6X 11.3X 10.0X 10.0X 9.8X 8.6X 8.4X 6.8X 7.1X Cutbank Edmonton Provident Vantage Weighted Cutbank Edmonton Provident Vantage Weighted Complex(1) North Energy(3) Pipeline(4) Average Complex(1) Nor
Slide 18: Our business in 2018
Our business in 2018 Now…… In 2018……. 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 (t
Slide 19: Market Dynamics
MARKET DYNAMICS Scott Burrows
Slide 20: Doing the important things right: reducing exposure
Doing the important things right: reducing exposure The situation: What Pembina is doing right: • Markets over the past several • Growing fee-for-service portion of business months have been dramatically • Developing market egress solutions (i.e. proposed propane export terminal more challenging for
Slide 21: Transition of North American propane markets to export focus
Transition of North American propane markets to export focus US & Canadian propane inventories remain at all time highs US propane production is continuing to grow 100,000 90 1,100,000 90,000 1,000,000 80 Production (bpd) 900,000 80,000 70 800,000 70,000 700,000 Inventory (mboe) Temperature (F) 60 6
Slide 22: Paradigm shift in global propane markets
Paradigm shift in global propane markets The US has become the world's largest propane exporter Asia-Pacific propane long-term fundamentals remain strong 1,200 2,500 US Propane Exports 1,000 2,000 800 1,500 mbpd mbpd 600 1,000 400 200 500 - 2012 2013 2014 2015(E) 0 2008 2009 2010 2011 2012 2013 2014
Slide 23: Ethane market dynamics support Alberta's petrochemical industry
Ethane market dynamics support Alberta’s petrochemical industry 400 Supply from oil sands off-gas Import from Vantage pipeline • Pembina is one of the WCSB’s largest Alberta Ethane Supply & Demand (mbpd) Supply from conventional gas transporter of ethane through its conventional forecast Alberta dem
Slide 24: Butane supply continues to grow while demand remains tepid
Butane supply continues to grow while demand remains tepid 800 700 600 500 mbpd 400 300 200 100 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014(E) 2015(E) 2016(E) US Butane Demand US Butane Supply Potential for increased future exports 24 Source: EIA, Bloomberg, company filings and RBC Capital M
Slide 25: Condensate supply shortfall driven by demand from oil sands
Condensate supply shortfall driven by demand from oil sands Western Canada condensate supply and demand forecast Top 8 oil sands condensate usage ranked by operating production 700 900 Reduction Due to Rail Cenovus (Conoco) Demand (Bitumen Blending), Net of Reduction Due to Rail Imperial (Exxon) For
Slide 26: Crude Oil Value Chain
CRUDE OIL VALUE CHAIN Paul Murphy
Slide 27: Doing the important things right: crude oil value chain
Doing the important things right: crude oil value chain The situation: What Pembina is doing right: • Record volumes and significant • Highly reliable pipeline operations expansion in conventional pipelines • Pipelines are 100% fee-for-service, cost-of-service or fixed return with no direct • Growth
Slide 28: Crude oil value chain – Pembina's integrated service offering
Crude oil value chain – Pembina's integrated service offering PRODUCTION CONSUMPTION CONVENTIONAL & MIDSTREAM OIL SANDS PIPELINES MIDSTREAM Production Field Terminalling &Treatment LVP Feeder Terminalling Logistics & Spec Products Pipelines & Marketing Distribution Refining Consumption Logistics & D
Slide 29: Important crude oil resource plays remain economic at current prices
Important crude oil resource plays remain economic at current prices Canadian crude oil plays break-even price (half-cycle) US crude oil plays break-even price (half-cycle) $70 $72 $60 $70 $68 $50 $66 CAD$ / bbl $40 $US / bbl $64 $30 $62 $20 $60 $58 $10 $56 $- $54 Pembina has a presence Infrastructu
Slide 30: Conventional Pipelines – overview
Conventional Pipelines – overview • Pipelines operational excellence: 99% reliable ALBERTA • Proximal to prolific geology FORT TAYLOR DUNVEGAN MCMURRAY • Q4 2014 throughput: 612 mbpd (~22% increase from Q4 2013) FORT ST JOHN • 2014 throughput: 575 mbpd (~17% increase from 2013) VALLEYVIEW • Connecte
Slide 31: Solid business platform: contract overview
Solid business platform: contract overview • 100% of revenue is fee-for-service – No direct commodity exposure – Re-contracting: majority of base volumes under long-term contract • Flexible commercial framework, standard terms: – Longer-term, fee-for-service volume commitment (10+ years) – Substanti
Slide 32: We are investing to drive growth
We are investing to drive growth Capital Expenditures Capital Spending Details 4,500 2014 (actual): $628 million 4,000 • Spent to progress Phase II HVP and LVP, complete 3,500 Simonette to Kakwa expansion and on other expansion projects and connections 3,000 2015 (budget): $1,195 million $MM 2,500 •
Slide 33: Our throughput continues to grow
Our throughput continues to grow • Solid industry performance and strategically located assets have led to strength in Pembina's throughput profile • January 2015: reached a weekly all-time high peak throughput of over 662,000 bpd 575 mbpd 616 mbpd 650 492 mbpd 600 456 mbpd 550 374 mbpd 414 mbpd 500
Slide 34: Expansions could bring Alberta capacity to ~1.5 million bpd
Expansions could bring Alberta capacity to ~1.5 million bpd 1,600 ~1,508 mbpd 1,400 1,200 420 1,000 (mbpd) 800 55 53 52 40 600 175 400 200 453 – Pre-Expansion Phase I Phase II Phase III Phase III (Ultimate Capacity) Phase III (2010) (in-service) (early to mid 2015) (late 2016 to mid 2017) (combined
Slide 35: Increasing Peace and Northern volumes under long-term contract
Increasing Peace and Northern volumes under long-term contract 692,000 Phase II LVP & HVP Standalone & contracts Phase III contracts Phase I contracts 170,000 bpd bpd of crude oil, 160,000 bpd 362,000 bpd condensate and NGL under long-term contract Meaningful increase in contracted volumes on Peace
Slide 36: Phase III Expansion – making a good thing better
Phase III Expansion – making a good thing better System Capacity (mbpd) Capital Expenditure ($MM) Contracted Volumes (mbpd) 800 $3,000 700 680 $2,540 700 $2,500 $2,440 600 600 500 $2,000 $1,949 500 420 Installation 400 362 400 $1,500 of additional 320 pump 300 Further Significant 300 Additional stat
Slide 37: Pipeline lateral and expansion program
Pipeline lateral and expansion program $210 MM NEBC Expansion • 160 km, up to 12" HVP pipeline, underpinned by long-term, cost-of-service ALBERTA agreement • Base capacity of up to 75 mbpd • Parallels Pembina’s existing BC pipelines • Subject to regulatory and environmental approval, in-service Q2 t
Slide 38: Vantage Pipeline acquisition & expansion
Vantage Pipeline acquisition & 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 bp
Slide 39: Looking ahead
Looking ahead • Expect to have Phase III Expansion in-service by mid 2017 • Additional lateral opportunities arising from increased mainline capacity • Continue to focus on Bakken opportunities • Continue to fill mainline and expand laterals • Focus on capital cost reduction • Assess strategic acqui
Slide 40: Oil Sands & Heavy Oil – overview
Oil Sands & Heavy Oil – overview 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 w
Slide 41: Crude Oil Midstream – overview
Crude Oil Midstream – overview 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
Slide 42: We are investing to drive growth
We are investing to drive growth Capital Expenditures Capital Spending Details 700 2014 (actual): $63 million 600 • Spent to complete Cynthia full-service terminal Capital Expenditures ($MM) and progress above ground storage at PNT-E 500 2015 (budget): $75 million 400 • $40 million on above ground s
Slide 43: Our assets are well-positioned and interconnected
Our assets are well-positioned and interconnected 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 I
Slide 44: Expanding above ground storage
Expanding above ground storage Edmonton North Terminal (PNT-E) Above Ground Storage Potential • Complete tanks • Hydrotest 2,000 ~1.8 By Q3 2015 • Coat and paint MMbbls 1,600 • Pipe rack construction 600 • Complete pipe connections Q3 2015 to 1,200 (mbbls) Q1 2016 540 • Final mechanical and electric
Slide 45: Canadian Diluent Hub is well-situated
Canadian Diluent Hub ("CDH") is well-situated $350 million diluent receipt and delivery terminal Ideal site location for diluent terminal • Site is in close proximity to: • major oil sands pipeline rights-of-way Redwater Project details • existing crude oil and petrochemical infrastructure PNT-N • P
Slide 46: Project Execution Overview
PROJECT EXECUTION OVERVIEW Michael Massecar
Slide 47: Doing the important things right: project execution
Doing the important things right: project execution The situation: What Pembina is doing right: • Success in securing projects has resulted in • We have significant in-house project execution expertise largest project execution program in our history • We have a demonstrated track record of bringing
Slide 48: Well-established and proven project approach
Well-established and proven project approach In-house project expertise Project development efficiencies Continue to improve all aspects of project life cycles Repeatability & standardized designs (leveraging design through growing sophistication of internal teams: and engineering work) Experien
Slide 49: Project track record
Project track record Capital Project & Cost Date in-service Completed on time Completed on budget Safety Metric Business Unit (C$MM) Mitsue: ahead of 1,152,065 man hours & 8,420,896 Nipisi & Mitsue Under budget by $40 $ 400 August 2011 schedule km travel with 0.17 lost time injury Oil Sands & Heavy
Slide 50: Conventional Pipelines project status
PROJECTED CAPITAL SPEND PROFILE AND PROJECT STATUS Project UPDATE development status looking forward Projects (in construction/ Capital Regulatory Expected Tracking Project Status development) (C$MM) Approval In-Service On time/budget Saturn II Facility $ 170 Yes Under construction Q3 2015 Yes Gas S
Slide 51: Construction: Phase II, Phase III and lateral program
Construction: Phase II, Phase III and lateral program ALBERTA Phase III Expansion Phase III Expansion (under construction) Completed Phase III Expansion segment Previously announced Phase II Expansion Pembina crude oil and condensate pipelines Pembina NGL pipelines Other Pembina pipelines Pipeline L
Slide 52: Phase II LVP & HVP – construction update
Phase II LVP & HVP – construction update $695 million expansion: near term in-service date • Increase capacity by 55 mbpd on Peace and Northern NGL system Project • Increase capacity by 53 mbpd on LVP system details • Obtained all regulatory approvals • All equipment is on-hand • Costs secured: LVP
Slide 53: Phase III – construction update
Phase III – construction update $2.44 billion expansion: underway • 880 km total of new pipeline (previously 540 km) • Initial capacity of 420 mbpd between Fox Creek and Edmonton, with ability to Project increase capacity to over 680 mbpd by adding pump stations details • Submitted regulatory applic
Slide 54: NGL Value Chain
NGL VALUE CHAIN Se Stu Taylor PEMBINAN'
Slide 55: Doing the important things right: NGL value chain
Doing the important things right: NGL value chain The situation: What Pembina is doing right: • Large resource in place: Montney, • Gas Services is in heavy execution phase (four projects to be completed by Deep Basin and Duvernay mid 2016; overall tracking on time and on budget) • With growth in NG
Slide 56: NGL value chain – Pembina's integrated service offering
NGL value chain – Pembina's integrated service offering PRODUCTION CONSUMPTION CONVENTIONAL GAS SERVICES PIPELINES MIDSTREAM Gathering, Propane Mainline Terminalling Logistics Consumption Production Processing, HVP Feeder Fractionation Export Extraction & Marketing & Distribution Field Pipelines Ext
Slide 57: Integrated value chain – case study
Integrated value chain – case study Gas Plant Case Study: Overview NOI Contribution by Value Chain ($MM) • 200 MMcf/d of ethane-plus extraction capacity $60 ~$26 MM incremental NOI created on top of and up to 13,000 bpd of NGL with ~70 km NGL GBU NOI pipeline lateral • Underpinned by long-term take-
Slide 58: Important gas resource plays remain economic at current prices
58 Eagle Ford US American shale gas break-even price (half-cycle) Dry Gas Haynesville Shale - LA Important gas resource plays remain economic at current prices Haynesville Shale - TX Barnett Shale Diversity of supply – Pembina is not reliant on one resource play Fayetteville Shale Eagle Ford Shale G
Slide 59: Gas Services – overview
Gas Services – overview • 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 • Q4 2014 average processing volume: (M
Slide 60: Gas Services: contract overview
Gas Services: contract overview • 100% fee-for-service revenue – Underpinned by long-term contracts – 75% of 2014 revenue protected with take-or-pay commitments • Flexible to offer commercial framework; standard terms include: – Longer-term, take-or-pay volume commitment (5+ years) – Fixed capital f
Slide 61: We are investing to drive growth
We are investing to drive growth Capital Expenditures Capital Spending Details 1,200 2014 (actual): $295 million • Spent to progress the multi-year construction Capital Expenditures ($MM) 1,000 projects at Resthaven and Saturn II and to complete Musreau II 800 2015 (budget): $240 million 600 • $45 m
Slide 62: And to support growing volumes
And to support growing volumes 700 673 MMcf/d 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 Jan-15 Gas processing volume* Gas Services is one of Pembina's fastest growing businesses 62 * Volumes at Musreau exclu
Slide 63: SEEP – construction update
Saskatchewan Ethane Extraction Plant (SEEP) – construction update $110 million, 60 MMcf/d deep cut gas plant in Saskatchewan Bakken • Acquired under-construction plant as part of Vantage acquisition • Deliver ethane to the Vantage Pipeline Project • Could produce up to ~4,500 bpd of ethane details •
Slide 64: Resthaven Expansion – construction update
Resthaven Expansion – construction update ~$145(1) million, 100 MMcf/d (gross) expansion & pipeline lateral • Bring total plant capacity to 300 MMcf/d(2) Project • Constructing 28 km 12" gathering pipeline to deliver gas into facility details • Volumes under long-term contract for Phase III and at R
Slide 65: Musreau III – construction update
Musreau III – construction update $105 million, 100 MMcf/d shallow cut gas plant • Liquids extraction capacity of ~3,000 bpd • Underpinned by long-term, take-or-pay service agreement Project • Leverages engineering and design from Musreau I and II; will use details same pipeline lateral to access ou
Slide 66: Saturn II – construction update
Saturn II – construction update $170 Million, 200 MMcf/d deep cut gas plant • Liquids extraction capacity of ~13,000 bpd Project • Leverage engineering work completed for Saturn I details • 10-year firm-service contract for 130 MMcf/d (~65% of total capacity) • Plant site construction is currently 3
Slide 67: Expanding to meet customer demand
Expanding to meet customer demand 1,600 1,463 80,000 MMcf/d 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 30,000 61% 50 growth in contracted 400 205 20,000 capacity by mid-2016 200 10,000 318 – – Cutbank Musreau Shall
Slide 68: Looking ahead
Looking ahead • Majority of Pembina's Gas Services assets have been located within the same geology; plan to expand into/increase our presence in other areas including the Montney, Duvernay and Bakken • Continue to assess acquisition opportunities • May see a near-term shift away from deep cut to sh
Slide 69: NGL Midstream – overview
NGL Midstream – overview REDWATER WEST: 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 T
Slide 70: Solid business platform: contract overview
Solid business platform: contract overview • Standard terms for NGL fractionation agreements include: – Longer-term take-or-pay volume commitment (10 years) – Payment of fixed capital fee on volume processed – Payment of pro-rata share of facility operating costs • Pembina markets finished products
Slide 71: We are investing to drive growth
We are investing to drive growth Capital Expenditures Capital Spending Details 2,000 2014 (actual): $327 million 1,800 • Spent to progress RFS II as well as NGL storage Capital Expenditures ($MM) 1,600 caverns and associated infrastructure 1,400 2015 (budget): $435 million 1,200 • $150 million to co
Slide 72: NGL – fractionation growth
NGL – fractionation growth 300 ~250 RFS II mbpd • 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 Q4 2015 mbpd 150 73 • Ethane produced at RFS II will
Slide 73: NGL salt cavern storage potential
NGL salt cavern storage potential 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 Co
Slide 74: Progressing RFS II construction
Progressing RFS II construction RFS II site in August 2013 RFS II & RFS III site in December 2014 RFS II site in May 2014 Redwater positioned to be Canada's largest fractionation site 74 See "Forward-looking statements & information."
Slide 75: RFS II – construction update
RFS II – construction update $415 million, 73 mbpd ethane-plus fractionator • 10-year take-or-pay contracts for 100% of operating capacity Project • Leverage engineering work completed for RFS I details • Erected de-propanizer; completing final tower installment • Site and foundations for compressor
Slide 76: RFS III – construction update
RFS III – construction update $400 million, 55 mbpd propane-plus fractionator • 10-year, take-or-pay contracts for 100% of operating capacity • Leverage engineering work completed for RFS I & II Project details • De-ethanization tower can be added in the future • Detailed engineering work has commen
Slide 77: Corunna facilities
Corunna facilities ~$45 million product handling capacity expansion • Rail offload and cavern injection pumps to increase offloading capacity from 3,800 cars per year to 6,200 cars per year • Adding rail track, new truck bay, brine pond, pump and system Project details upgrades • Progressing detail
Slide 78: Looking ahead
Looking ahead • Potential expansion at Younger • Expanding rail fleet • Aim to exploit assets in Sarnia with possibility of recreating our western asset footprint in support of Marcellus and Utica development • Bakken NGL egress strategy • NGL value chain integration − Export Terminal • Focused on c
Slide 79: Propane export – extending Pembina's value chain participation
Propane export – extending Pembina's value chain participation • Global opportunity − Growing North American production and robust Existing NGL Western Value Chain Asian demand Canada • Decrease of traditional markets − Eastern Canada and US expected to be supplied by growing US production • Canadia
Slide 80: Proposed propane export terminal project timeline
Proposed propane export terminal project timeline Potential US$500 million export terminal • Continue public consultation and engagement (throughout project) • Prepare and submit regulatory applications • Prepare detailed engineering 2015 • Place orders for long-lead equipment • Receive regulatory a
Slide 81: Opportunities for growth: North Dakota Bakken/Williston Basin
Opportunities for growth: North Dakota Bakken/Williston Basin NGL Production Forecast Drivers of growth opportunities 800 • Robust current production 160 mbpd of NGL 700 • Recent “flaring” regulation setup 600 significant future NGL growth: 500 increasing to 450 – 700 mbpd by 2020 creating a conside
Slide 82: Bakken NGL egress & opportunity
Bakken NGL egress & opportunity Current Egress Alternatives Potential Opportunities Transported on Third Party pipelines Construction of straddle plant infrastructure Vantage Pipeline Further expansion of the Vantage Pipeline Transported on Third Party pipelines Local Market Sales Source of supply f
Slide 83: Dedicated to Asset Integrity & Safety
DEDICATED TO ASSET INTEGRITY & SAFETY Allan Charlesworth
Slide 84: Doing the important things right: asset integrity
Doing the important things right: asset integrity The situation: What Pembina is doing right: • We continue to add new assets, expand • Focus on maintaining safe and reliable operations existing assets, and renewed long- • We have a robust integrity management program standing assets • We continue t
Slide 85: Comprehensive and continuous evaluation of all threats
Comprehensive and continuous evaluation of all threats IN-LINE INSPECTION ("ILI") FACILITY INTEGRITY • Metal loss • Governs operation, inspection, monitoring • Crack detection and mitigation (if required) for all pressure vessels and tanks • Geometry GEOTECHNICAL PROGRAM INTERNAL CORROSION PROGRAM •
Slide 86: Rigorous in-line inspection program using latest technology
Rigorous in-line inspection program using latest technology • Pembina has over 460 ILI capable Main tool technologies pipeline segments • Magnetic flux leakage ("MFL") • Pembina completes an average of 60- • Geometry (deformations) 80 inspections/year • Combo tools (MFL and geometry) • Inspections t
Slide 87: Robust geotechnical program
Robust geotechnical program INSPECTION PROGRAM • 1,731 water crossings, 430 slopes • Typically over 400 inspections/year MONITORING PROGRAM • Depth-of-cover surveys: typically over 200/year • Slope surveys and instrumentation: typically over 30/year • Weather Warning System tracks snowpack, river le
Slide 88: Innovative tube storage inspection
Innovative tube storage inspection • Tool development and testing was completed in August 2014 • Multi-diameter inspection tool, able to inspect 48-54-inch tubes • Execution of inspection runs were successful, with quality data collected • Full inspection coverage of all of Pembina’s tubes Pembina's
Slide 89: Focus on continuous risk reduction initiatives
Focus on continuous risk reduction initiatives Continue to evaluate all threats to our pipelines and facilities (corrosion, geohazards, crack, geometry, etc.) Using (developing) new technologies to enhance detection and analysis of threats Smaller diameter crack tools Larger diameter inspect
Slide 90: Our priority is on safety and reliability
Our priority is on safety and reliability Employee Safety Safe Driving • Employee near-miss reporting increased by 45% in 2014 • Mandatory AMA Collision Avoidance program • Over 1,100 employees worked more than 2.3 million hours • Back-in and dusk-to-dawn policies: spot check behind without a lost t
Slide 91: Strong Financial Platform
STRONG FINANCIAL PLATFORM Scott Burrows
Slide 92: Doing the important things right: financing
Doing the important things right: financing The situation: What Pembina is doing right: • With our large portfolio of • We continue to execute well-timed, well-priced financings secured capital, we have • We are committed to our investment grade credit rating approximately $5 billion in funding ahea
Slide 93: Financing objectives
Financing objectives 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 excel
Slide 94: Debt metrics
Debt metrics Total Debt / EBITDA Funds from Operations / Total Debt 5.0x 35% 30% 4.0x 25% 3.0x 20% 2.0x 15% 10% 1.0x 5% 0.0x - (1) 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Total Debt / Total Book Capitalization Total Debt / Total Enterprise Value 70% 30% 60% 25% 50% 20% 40% 15% 30% 10% 20%
Slide 95: Clean balance sheet
Clean balance sheet 8.0x 7.0x 6.0x 2014 Debt / EBITDA(1) 5.0x 4.0x 3.0x 2.0x 1.0x 0.0x BBB- A BBB BBB+ A- BBB A A- BBB+ BBB BB NR Pembina continues to employ significantly less leverage than its peers (1) Total debt= [short-term + current long-term + convertible debts]-cash; EBITDA from Bloomberg. S
Slide 96: Conservative structuring
Conservative structuring Debt Cost of Capital / Tenor Optimization(1) 7.0% 6.5% Peer 7 BBB Weighted Average Coupon 6.0% BBB+ Peer 3 5.5% Peer 4 5.0% Peer 2 Peer 9 4.5% Peer 5 Baa2 4.0% Peer 6 Peer 8 3.5% Peer 1 3.0% Ba2 NR BBB 2.5% 2.0% 2 yrs 3 yrs 4 yrs 5 yrs 6 yrs 7 yrs 8 yrs 9 yrs 10 yrs 11 yrs 1
Slide 97: Access capital at attractive rates
Access capital at attractive rates Medium term notes (2013-YTD) Preferred shares (2013-YTD) Common shares (2013-YTD) 700 700 700 $600 $600 600 600 600 500 500 500 400 400 400 $345 $MM $MM $MM $321 $286 $266 300 300 $250 $250 $250 300 $200 200 200 $150 200 100 100 100 $58 0 0 0 Apr-2013 Apr-2014 Feb-
Slide 98: Debt maturity profile
Debt maturity profile Senior Debt Maturity Profile Majority Fixed Rate Debt $600 Amount outstanding ($MM) $500 $400 $300 $200 96% Fixed Rate $100 $0 • Weighted average cost of debt: 4.6%(1) • $120 million drawn on the $1.5 billion revolving credit facility(1) • Weighted average length of debt to mat
Slide 99: Funding plan and capital structure is equipped for growth
Funding plan and capital structure is equipped for growth Funding Plan Prudent and flexible capital structure1 $6,000 $5 B 24% (2015 – 2018) $5,000 $4,000 Debt 4% $MM $3,000 8% 64% Capital Preferred Expenditures $2,000 DRIP Common $1,000 Cash Flow Common Shares Preferred Shares Convertible Debt Debt
Slide 100: Sensitivities
Sensitivities Conventional Pipelines Key Variables 2015 EBITDA Impact for Uncontracted Volumes ($MM) Volume ± 10,000 bpd ±$9 Gas Services Key Variables 2015 EBITDA Impact for Uncontracted Volumes ($MM) Volume ± 10,000 boe/d ±$2 NGL Midstream(1) Key Variables 2015 EBITDA Impact Before Hedging ($MM) A
Slide 101: Dividend growth supported by growing cash flow
Dividend growth supported by growing cash flow $2.50 A- $2.00 BBB BBB+ $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 per share 101 Se
Slide 102: We are dedicated to stakeholders
WE ARE DEDICATED TO STAKEHOLDERS Mick Dilger
Slide 103: Invested almost $3 million in our communities in 2014
Invested almost $3 million in our communities in 2014 Funded over 140 organizations in 2014, including: • 17 schools • 22 volunteer fire departments • 10 hospitals and/or health centres PEMBINA'S UNITED WAY BENCHMARKING 1st $2,500,000 Comparison of the Top 10 Companies in the Energy Division • 8 com
Slide 104: Purposefully growing opportunities for collaboration with Aboriginal businesses
Purposefully growing opportunities for collaboration with Aboriginal businesses • In 2014, Pembina received more than 90 First Nations project consultation completions by Provincial regulators • Pembina is continuing its efforts to become a leader in Aboriginal Relations. In 2015, Pembina plans to:
Slide 105: Reputation for attracting and retaining employees
Reputation for attracting and retaining employees • ~1,120 employees (compared to 430 employees as at the end of 2010) Canada’s Top Employers has named us one • 13 field offices of the top 70 Employers in Alberta for 2015 • Average years of service: Entire company – 7 years Field offices – 9 yea
Slide 106: Summary
7 3 ~Mick Dilger 3 PEMBINAN'
Slide 107: We have an established track record
We have an established track record 8.2 19 % CAGR % CAGR $2.50 $1,200 in ACFPS in operating margin 2005 – 2014 2005 – 2014 $1,100 Adjusted Cash Flow Per Share $1,000 $2.00 $900 $800 ($millions) $1.50 $700 $600 $1.00 $500 $400 $300 $0.50 $200 $100 - - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Slide 108: We continue driving shareholder value
We continue driving shareholder value 487 % total shareholder return* * Jan 1, 2005 – Dec 31, 2014, inclusive of dividends reinvested 5.1 % 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 % avera
Slide 109: Total Return (100 = January 1, 2005)
We produce exceptional performance 10 Year Total Return – PPL vs. S&P/TSX(1) 880 780 Total Return (100 = January 1, 2005) 680 580 480 380 280 180 80 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Pembina S&P/TSX Index Pembina’s has had an exceptional growth story and the best is yet to come! (1)
Slide 110: We are continuing to de-risk our business
We are continuing to de-risk our business $700-$1,000 4% 14% 14% million of potential incremental EBITDA 22% generated per year on a run-rate basis once 64% 82% Pembina's committed projects are all in-service* 2014 2018 Fee-for-Service / Cost-of-Service Product Margin Frac Spread In excess of 80% of
Slide 111: Key take-away: we are doing the important things right
Key take-away: we are doing the important things right Strategically located and well-established infrastructure Extensive asset footprint with high barriers to entry, serving long-life, economic hydrocarbon reserves Proven track record and management team History of safe and reliable operations
Slide 112: Contact Us: 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 113: Non-GAAP and additional GAAP measures
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
Slide 114: Counterparty overview
Counterparty overview • 75% of 2014 average 60 2014 Average 60 Day Credit Exposure(1) Non-investment day credit exposure is grade counterparties derived from customers are required to who are investment grade or are secured by 25% provide one of the guarantees from following(2): investment grade ent