Pembina Pipeline Corporation · TSX:PPL
Pembina Pipeline — Corporate Update (November 2015)
40 slides from Pembina Pipeline's corporate update, November 2015
Slide 1: Pembina Pipeline Corporation November 2015 Corporate Update
PEMBINA PIPELINE CORPORATION “DOING THE IMPORTANT THINGS RIGHT” November 2015 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 allows investors to participate in the oil and Common shares outstanding(1) 356 million natural gas liquids industry across Canada and North Dakota. We: TSX common share trading price(1) $32.84
Slide 4: Our assets and businesses at a glance
Our assets and businesses at a glance Gas Processing Plant Conventional Pipelines Redwater Fractionator 9,000+ km network transports hydrocarbon Midstream Storage Facility products and extends across much of Alberta Truck Terminal and parts of British Columbia, Saskatchewan Pembina Conventional Pipe
Slide 5: Integrated, customer-focused value chain
Integrated, customer-focused value chain Conventional Gas/HVP Value Chain: Gas Services Pipelines Midstream • Gathering and processing Mainline Extraction • Transportation on Conventional Pipelines Gathering, • Fractionation Production Processing, HVP Feeder Propane export Consumption Field Pipeline
Slide 6: Our assets and businesses operate in prolific geology
Our assets and businesses operate in prolific geology ALBERTA SASKATCHEWAN OIL SANDS MONTNEY (Resource Life 200+ years) (Resource Life TAYLOR ~170 years) FORT MCMURRAY SEAL & PELICAN LAKE DEEP BASIN SWAN HILLS (Resource Life ~23 years) Fort Saskatchewan EDMONTON DUVERNAY (Resource Life CARDIUM ~500
Slide 7: We are pursuing a fee-for-service growth portfolio
We are pursuing a fee-for-service growth portfolio Projects (all fee-for-service) In Service Capital (C$MM) Relative Growth Project Portfolio Phase II NGL/Crude Expansions $670 45% Phase III Pipeline Expansions(1) Mid 2017 $2,440 Pembina has the largest committed growth NEBC Expansion(1) Late 2017
Slide 8: Project timelines & in-service dates
Project timelines & in-service dates Committed Capital Expected In-Service Date* Expected Project Timelines* $4.5 Musreau III $4.0 ~$1.3 billion of capital expected to be put into service in 2015 $4.0 BB Saturn II SEEP Resthaven Expansion $3.5 Duvernay I Phase II Expansion $3.0 Phase III Expansion $
Slide 9: We are committed to a low risk business platform
We are committed to a low risk business platform $700-$1,000 million of potential incremental EBITDA generated per year on a run-rate basis once Pembina's committed projects are all in-service(1) ~1% - 3% ~12% - 19% 14% 22% 19% ~80% - 85% 67% 78% ~80% - 85% 2014 2015(2) 2018(3) Fee-for-Service / Cos
Slide 10: 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 7.1x 6.8x 6.0x 6.0x 4.0x 4.0x 2.0x 2.0x 0.0x 0.0x Cutbank Edmonton North(2) Provident (3) Vantage Pipeline Weighted Cutbank E
Slide 11: Dividend growth supported by growing cash flow
Dividend growth supported by growing cash flow $2.50 9.1% CAGR in ACFPS(1) 5.8% CAGR in Dividend per Share $2.00 2005 – 2014 2005 – 2014 $1.50 $1.00 $0.50 $- 2005 2006 2007 2008 2008 2010 2011 2012 2013 2014 Dividends per share Adjusted cash flow from operating activities per share Strong history of
Slide 12: Business Overview
BUSINESS OVERVIEW
Slide 13: 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 14: Conventional Pipelines – overview
Conventional Pipelines – overview • Pipeline operational excellence: 97% reliable (Q1 – Q3 2015) ALBERTA • Proximal to prolific geology FORT MCMURRAY • Q3 2015 throughput: 600 mbpd (~6% increase from Q3 2014) DUNVEGAN TAYLOR FORT • 2014 throughput: 575 mbpd (~17% increase from 2013) ST JOHN • Connec
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 • February 2015: reached a weekly all-time high peak throughput of over 650,000 bpd 612 mbpd 575 mbpd 700 600 492 mbpd 456 mbpd 417mbpd 500 393 mbpd 374
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 Phas
Slide 17: 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 18: 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 ~1,508 mbpd 1,400 1,200 420 1,000 Mbpd 800 53 55 52 40 600 175 400 200 453 – Pre Expansion (2010) Phase I (In-Service) Phase II Phase III Phase III (ultimate capacity) Phase III (combined system (LVP in-service A
Slide 19: Oil Sands & Heavy Oil – overview
Oil Sands & Heavy Oil – overview Syncrude Pipeline • Operational excellence Horizon Pipeline Cheecham Lateral ‒ 99+% reliable (Q1 – Q3 2015) Nipisi Pipeline Mitsue Pipeline Peace Pipeline • Diverse connectivity to various industry hubs for crude oil and condensate • Contracts are long-life with high
Slide 20: New Horizon Pipeline System expansion
New Horizon Pipeline System expansion • Expanding 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 $125 million • Expected to be in-servic
Slide 21: Gas Services – overview
Gas Services – overview • Operational excellence ALBERTA ‒ 100% reliable (Q1 – Q3 2015) • Positioned in active and emerging NGL rich plays FORT MCMURRAY • Provide gas gathering, compression and shallow/deep cut processing services • Nine facilities in service CUTBANK COMPLEX • Q3 2015 average proces
Slide 22: Growing volumes in Gas Services
Growing volumes in Gas Services 800 2013 Q4: Saturn I (200 MMcf/d) 2014 Q4: Musreau II (100 MMcf/d) 700 2014 Q4: Resthaven (134 MMcf/d(1)) 2015 Q3: SEEP (60 MMcf/d) 600 2015 Q3: Saturn II (200 MMcf/d) 500 MMcf/d 400 300 200 100 - 2009 2010 2011 2012 2013 2014 Q1 2015 Q2 2015 Q3 2015 (2) Gas processi
Slide 23: Duvernay I gas plant development
Duvernay I gas plant development • Development of a new 100 MMcf/d shallow cut gas plant, with expected NGL extraction capacity of ~5,500(1) bpd ‒ Facility will be located near Pembina’s Fox Creek Terminal ‒ Underpinned by a large, diversified, investment grade customer • Expected capital cost of ~$
Slide 24: Field processing capacity expanding to meet customer demand
Field processing capacity expanding to meet customer demand 1,800 90 1,567 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 25: NGL Midstream – overview
NGL Midstream – overview Gas Processing Plant Redwater 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 (larg
Slide 26: 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 • Committed take-or-pay revenue streams for 10-year 55 term from in-service date, for 97% of the operating 200 capacity • Expected on-stream date in Q1 2016 mbpd 150 73 • Ethane
Slide 27: Terminalling services for Sturgeon Refinery
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 termina
Slide 28: NGL salt cavern storage potential
NGL salt cavern storage potential ~28 Substantial storage cavern 30.0 MMbbls development potential • Cavern development: • At Redwater 25.0 ‒ 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 29: Crude Oil Midstream – overview
Crude Oil Midstream – overview • Develop and provide terminal, hub & storage services to ALBERTA ALBERTA support the energy industry • 310 mbbl of above ground crude oil and condensate FORT MCMURRAY storage capacity, with 550 mbbl under construction; TAYLOR expansion potential to 1,500 – 2,000 mbbl
Slide 30: Strong Financial Platform
STRONG FINANCIAL PLATFORM
Slide 31: 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 32: 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 $400 $400 $400 $345 $MM $MM $321 $MM $286 $274 $300 $266 $300 $300 $250 $250 $250 $225 $200 $200 $200 $200 $150 $100 $10
Slide 33: Funding plan and capital structure is equipped for growth
Funding plan and capital structure is equipped for growth Expected Funding Plan(1) Capital structure at September 30th(2) $4.5 $4 billion $4.0 (2015 – 2018) 33% $3.5 Debt $3.0 $2.5 55% $BB $2.0 Capital Preferred 1% Expenditures 11% $1.5 DRIP $1.0 Common Common Equity Preferred Equity Convertible Deb
Slide 34: Clean balance sheet
Clean balance sheet 7.0x 6.0x 5.0x Debt / EBITDA (2016E) 4.0x 3.0x 2.0x 1.0x - BBB+ A- A- BBB BBB+ A BBB BBB Ba2 NR Pembina continues to employ less leverage than its peers Source: Company filings. Based on Q3-15 total debt with preferred shares included at 50% of face value. EBITDA estimates based
Slide 35: Summary
SUMMARY
Slide 36: Our businesses in 2018
Our businesses in 2018 Now…… In 2018……. Conventional Pipelines • Largest conventional crude oil and NGL feeder system in Canada 9,000+ 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 capacity
Slide 37: 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 38: We continue driving shareholder value
We continue driving shareholder value 487 % total shareholder return* * Jan 1, 2005 – Dec 31, 2014, inclusive of dividends reinvested 5.8 % 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 % avera
Slide 39: 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 40: 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 with respect to financial measures which have not defined by GAAP but are used by management of and amortization included in operations and been identified by