Pembina Pipeline Corporation · TSX:PPL
Pembina Pipeline — Corporate Update (September 2014)
40 slides from Pembina Pipeline's corporate update, September 2014
Slide 1: Pembina Pipeline Corporation Corporate Update
PEMBINA PIPELINE CORPORATION CORPORATE UPDATE TSX: PPL, NYSE: PBA September 2014 1
Slide 2: Forward-Looking Statements & Information
FORWARD-LOOKING STATEMENTS & INFORMATION This presentation is for information purposes only and is not intended to, and should not be construed to constitute, an offer to sell or the solicitation of an offer to buy, securities of Pembina Pipeline Corporation. This presentation and its contents shoul
Slide 3: Pembina Is a Unique Investment Opportunity
PEMBINA IS A UNIQUE INVESTMENT OPPORTUNITY Pembina represents a pure play energy infrastructure company that allows investors to participate in the resurgent volume growth of the Western Canadian Sedimentary Basin Well-Positioned for Strong Demand Solid Business Growth for our Services Platform 3
Slide 4: Pembina at a Glance
PEMBINA AT A GLANCE Oil Sands & Heavy Oil TSX: PPL│NYSE: PBA 1,650 km of pipelines with 880 mbpd of contracted capacity Common shares outstanding (1) 328 million TSX common share trading price (1) $49.97 Gas Services TSX 52-week trading range (1) $31.88 - $49.97 368 MMcf/d net natural gas processing
Slide 5: Ideally Located Assets
IDEALLY LOCATED ASSETS • Integrated system of pipelines transport hydrocarbon liquids produced in western Canada: • conventional and synthetic crude oil, • heavy oil and oil sands products, • condensate (diluent) • natural gas liquids • Gas gathering and processing facilities • Oil and natural gas l
Slide 6: Assets and Major Plays in WCSB
ASSETS AND MAJOR PLAYS IN WCSB Map for illustrative purposes only. ALBERTA ATHABASCA OIL SANDS SLAVE POINT MONTNEY SEAL PELICAN LAKE SWAN HILLS DEEP BASIN DUVERNAY CARDIUM Gas Processing Plant Redwater Fractionator Midstream Storage Facility Truck Terminal Rail Terminal Pembina Conventional Pipeline
Slide 7: Customer Focused Value Chain
CUSTOMER FOCUSED VALUE CHAIN Conventional Gas Services Pipelines Midstream Mainline Extraction Gas/HVP Value Chain: • Gathering and processing • Transportation on Conventional Pipelines Gathering, • Fractionation at Production Processing, HVP Feeder Redwater Consumption Field Pipelines Terminalling
Slide 8: Strong Market Performance
STRONG MARKET PERFORMANCE 500 % total return* * Jan 1, 2004 – Dec 31, 2013, inclusive of dividends reinvested 4.6 % CAGR in dividends per share* * 2004 - 2013 $2.8 billion in dividends paid since inception* * To December 2013. Pembina began paying dividends in 1997. 18 % average compound annual retu
Slide 9: Strong Market Performance
STRONG MARKET PERFORMANCE • Significant total return outperformance in 2013 calendar year compared to both the composite index (+25%) and average peer performance (+20%) 10 Year Total Return – PPL vs. S&P/TSX(1) 2013 Calendar Year – Total Return 680 38% 35% Total Return (100 = January 1, 2004) 580 3
Slide 10: Strong Financial Performance
STRONG FINANCIAL PERFORMANCE 10 21 % CAGR % CAGR in ACFPS in operating margin 2004 – 2013 2004 – 2013 $2.50 $1,000 $900 Adjusted Cash Flow Per Share $2.00 $800 $700 $1.50 $600 ($ millions) $500 $1.00 $400 $300 $0.50 $200 $100 - - 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 ACFPS Operating Marg
Slide 11: 2014 Capital Spending Plan
2014 CAPITAL SPENDING PLAN 1,800 $1.7 billion* 4% 1,600 15% Total 2014 planned Capex = 1,400 9% • 76% higher than 2013 and largest in 1,200 Pembina’s history 21% 1,000 • ~60% directed towards NGL-related value ($ millions) 800 chain activities 600 • ~40% directed towards crude oil and 400 51% conden
Slide 12: Focused on Fee-for-Service Projects
FOCUSED ON FEE-FOR-SERVICE PROJECTS Capital Red indicates projects under Projects (all fee-for-service) In-Service (C$MM) construction or development Conventional Pipelines Phase II Crude Oil, Condensate & NGL $ 695 2014-2015 Expansions TAYLOR FORT MCMURRAY Phase III Pipeline Expansions* $ 2,000 201
Slide 13: Business Overview
BUSINESS OVERVIEW PEMBINNY
Slide 14: Conventional Pipelines
CONVENTIONAL PIPELINES • Operational excellence ALBERTA • 99% reliable FORT ST JOHN TAYLOR DUNVEGAN FORT MCMURRAY • Proximal to prolific geology • Q2 2014 throughput: 573 VALLEYVIEW mbpd (~18% increase from Q2 GRANDE PRAIRIE SWAN HILLS 2013) • 2013 throughput: 492 mbpd WHITECOURT FORT SASKATCHEWAN (
Slide 15: Solid Business Platform
SOLID BUSINESS PLATFORM • 100% of revenue is fee-for-service • No direct commodity exposure • Expansions underpinned by long-term contracts • Established infrastructure captures incremental production from major resources plays • Diversification in geology and geography • Tightening pipeline capacit
Slide 16: Growing Throughput
GROWING THROUGHPUT • Solid industry performance combined with strategically located assets has led to strength in Pembina's throughput profile 573 mbpd 492 mbpd 456 mbpd 414 mbpd 500 393 mbpd 374 mbpd 400 (mbpd) 300 200 100 - Crude & Condensate NGL Capacity expansions of ~430,000 bpd underway See “F
Slide 17: Our Expansions Could Bring Capacity to ~1.4 Million bpd
OUR EXPANSIONS COULD BRING CAPACITY TO ~1.4 MILLION BPD 1,400 ~1,400 mbpd 1,200 1,000 320 800 53 55 mbpd 52 40 600 175 400 453 200 – Pre-Expansion Phase I Phase II Phase III Phase III (Ultimate Total (in-service) (late 2014 to mid (late 2016 to mid Capacity) (combined 2015) 2017) system capacity) Cr
Slide 18: $2 Billion Phase III Expansion
$2 BILLION PHASE III EXPANSION ALBERTA FT. ST. • ~1,000 mbpd ultimate JOHN capacity on Peace & Northern TAYLOR GORDONDALE Pipelines DAWSON CREEK • Phase III will have 320 mbpd VALLEYVIEW initial capacity between Fox Creek and Edmonton – with LAGLACE GRANDE PRAIRIE SWAN ability to increase to over 50
Slide 19: Oil Sands & Heavy Oil
OIL SANDS & HEAVY OIL Syncrude Pipeline Horizon Pipeline • Operational excellence Cheecham Lateral Nipisi Pipeline • 99+% reliable over Mitsue Pipeline Peace Pipeline operating history • Diverse connectivity to various industry hubs for crude oil and condensate • Superior relationships with aborigin
Slide 20: Solid Business Platform
SOLID BUSINESS PLATFORM PIPELINE SYSTEM SYNCRUDE HORIZON CHEECHAM NIPISI & MITSUE Contracted Capacity 389,000 250,0001 136,000 127,000 (bpd) Contract Type Cost-of-Service Fixed Return Fixed Return Fixed Return Initial Term 25+ years 25+ years 25+ years 10+ years Shippers Syncrude Partnership: CNRL C
Slide 21: Potential Cornerstone Pipeline
POTENTIAL CORNERSTONE PIPELINE • Signed $35 million engineering support agreement CNRL HORIZON ("ESA") SYNCRUDE – Commenced stakeholder consultation and progressing engineering FORT MCMURRAY – Application expected to be filed by end of September CHEECHAM TERMINAL • Proposed Cornerstone Pipeline syst
Slide 22: Growing Oil Sands & Heavy Oil Capacity
GROWING OIL SANDS & HEAVY OIL CAPACITY 1,400 ~1,300 mbpd 1,200 1,000 32 800 95 mbpd 250 600 136 400 114 200 275 – Syncrude Syncrude Cheecham Lateral Horizon Nipisi & Mitsue Nipisi & Mistue Potential Total Expansion Expansions Cornerstone In-service assets Capacity could reach over 1.3 million barrel
Slide 23: Gas Services
GAS SERVICES • Operational excellence Gas Processing Plant Redwater Fractionator • 96% reliable PEACE PIPELINE Pembina Conventional MUSREAU Pipelines • Regional wells contain total GAS PLANT Pembina Gas Services Pipelines NGL of 75 -100 bbls/MMcf • Q2 2014 average processing CUTBANK Gas Services Pip
Slide 24: Solid Business Platform
SOLID BUSINESS PLATFORM • Strategically positioned infrastructure in active and emerging NGL rich plays • Provide gas gathering, compression and shallow/deep cut processing services • 100% fee-for-service revenue (no direct commodity exposure) • Underpinned by long-term contracts – 75% of 2013 reven
Slide 25: Expanding to Meet Customer Demand
EXPANDING TO MEET CUSTOMER DEMAND 1,198 MMcf/d 1,200 60,000 200 1,000 50,000 100 130 800 40,000 bpd (NGL and C5 output) 200 MMcf/d 600 30,000 50 400 205 Additional 56% of contracted 20,000 growth by end of 2015 200 10,000 318 – – Cutbank Musreau Shallow cut Saturn Resthaven Musreau II Saturn II Tota
Slide 26: NGL Midstream
NGL MIDSTREAM Map for illustrative Redwater West: purposes only. Gas Processing Plant • 73 mbpd NGL fractionator and 7.8 mmbbls Redwater Fractionator of finished product cavern storage Midstream Storage Facility Truck Terminal • Industry-leading rail-based terminal (largest Rail Terminal NGL rail ya
Slide 27: Strong Demand for Our Services: Full NGL Service Offering
STRONG DEMAND FOR OUR SERVICES: FULL NGL SERVICE OFFERING RFS II: • Doubling size of Redwater at estimated cost of $415MM expected on-stream Q4 2015 • Incremental 73,000 bpd of C2+ fractionation capacity • Committed take-or-pay revenue streams for an additional 10-year term from the in-service date,
Slide 28: Natural Gas Liquids – Fractionation Growth
NATURAL GAS LIQUIDS – FRACTIONATION GROWTH 300 RFS III ~250 mbpd • New $400 million 55,000 bpd propane- 250 plus fractionator • Underpinned by long-term take-or-pay 55 contracts with multiple producers 200 9 • Leverage design and engineering work completed for RFS I and RFS II 150 73 • In-service in
Slide 29: Storage Potential
STORAGE POTENTIAL NGL SALT CAVERN STORAGE POTENTIAL ABOVE GROUND STORAGE POTENTIAL 2,000 40 ~38 MM bbls ~1.8 mmbbls 1,800 35 1,600 30 600 1,400 millions of barrels thousands of barrels 25 1,200 20 1,000 2.6 540 800 15 600 10 17.5 330 400 5 200 300 0 – In-Service RFS Under RFS Potential Corunna Total
Slide 30: Crude Oil Midstream
CRUDE OIL MIDSTREAM • Develop and provide ALBERTA terminal, hub & storage services to support the TAYLOR FORT MCMURRAY energy industry • 630,000 barrels of above ground crude oil and condensate storage capacity PRINCE GEORGE • Expansion potential to FORT SASKATCHEWAN EDMONTON PEMBINA over 3,000 mbpd
Slide 31: Solid Business Platform
SOLID BUSINESS PLATFORM • Revenue generated from multiple service offerings • Liquids capture and terminaling support growth for other Pembina businesses • Interconnectivity increases options for customers • Access to 5 diluent streams through PNT and growing • Increasing fee-for-service revenue thr
Slide 32: Pembina Nexus Terminal
PEMBINA NEXUS TERMINAL 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 Difficult to replicate our asset locations See "
Slide 33: Strong Financial Platform
STRONG FINANCIAL PLATFORM PEMBINNY
Slide 34: Liquidity & Access to Capital
LIQUIDITY & ACCESS TO CAPITAL Access capital at attractive rates • DRIP(1) currently raising ~$26 million per month; raised Capital Structure(2) $286 million for full year 2013 3% • $1.5 billion credit facility: currently completely undrawn • $650 million of preferred shares raised (in 2013 and 21%
Slide 35: Debt Metrics
DEBT METRICS Total Debt to 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 2010 2011 2012 1 2013 Total Debt / EBITDA Funds from Operations / Total Debt Total Debt / Total Book Capitalization Total Debt / Total Enterprise Valu
Slide 36: Clean Balance Sheet
CLEAN BALANCE SHEET 7.0x BBB 6.0x A- BBB(H) A- BBB BBB+ 5.0x Total Debt / 2013E EBITDA 4.0x NR BBB 3.0x Ba2 2.0x 1.0x 0.0x Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Total Debt / 2013E EBITDA Pembina continues to employ significantly less leverage than its peers Source: Company filings,
Slide 37: Summary
SUMMARY PEMBINNY
Slide 38: Summary
SUMMARY Strategically located and well-established Highly contracted and stable cash flow infrastructure Fee-for-service focused capital program Extensive asset footprint with high barriers to entry Strong growth portfolio Assets service long-life, economic $1.7 billion capital spending plan
Slide 39: Going the Distance
GOING THE DISTANCE BOB MICHALESKI Chief Executive Officer MICK DILGER President & Chief Executive Officer MICK DILGER President & Chief Operating Officer PETER ROBERTSON Senior Vice President, Chief Financial Officer PETER ROBERTSON Vice President, Finance & Chief Financial Officer SCOTT BURROWS Vic
Slide 40: Non-GAAP and Additional GAAP Measures
NON-GAAP AND ADDITIONAL GAAP MEASURES This presentation uses certain terms that are not defined by GAAP but are used by management of Pembina to evaluate Pembina's performance. Non-GAAP and additional GAAP financial measures do not have a standardized meaning prescribed by GAAP and are therefore unl