Kinder Morgan, Inc. · NYSE:KMI
Kinder Morgan — Kinder Morgan Energy Partners — 2008 KMP Analyst Conference
28 slides from Kinder Morgan's conference presentation, Jan 24, 2008
Slide 1: Products Pipelines
ENERGY PARTNERS, L.P. Products Pipelines Tom Bannigan President Products Pipelines Group
Slide 2: Products Pipelines and Facilities
ENERGY PARTNERS, L.P. Products Pipelines and Facilities PRODUCTS PIPELINES PRODUCTS PIPELINES TERMINALS Cochin TRANSMIX FACILITIES INDICATES NUMBER OF (2,3,8) FACILITIES IN AREA KM HEADQUARTERS Pacific Northern 2 2 Miles of Pipe ~ 8,000 CALNEV 2 4 Terminals – 52 2 3 Pacific Tank Capacity - MMbbls 2
Slide 3: 2007 Volumes/Markets – Refined Products
ENERGY PARTNERS, L.P. 2007 Volumes/Markets – Refined Products Total down .4% versus 2006 Excluding Plantation – up .8% which compares to EIA 2007 growth estimate of .9% for gasoline, distillate and jet fuel Significant markets – 2007 over 2006 Pacific up 1.1% Excluding Watson, CA to Calnev short h
Slide 4: Revenue Drivers
ENERGY PARTNERS, L.P. Revenue Drivers Organic Volume Growth Expansions FERC Index Associated Terminals (higher rate of revenue growth) Targeted Tariff Incentives (In competitive markets) 4
Slide 5: Demand Factors
ENERGY PARTNERS, L.P. Demand Factors DEMAND STIMULI Population Demographics Urban Congestion Length of Commute U.S. Vehicle Fleet Size Continues to Increase POTENTIAL DEMAND CONCERNS Elasticity of Demand vs. Product Price More Efficient Vehicles (Hybrids/AFV’s and new CAFE standards) % of US Fleet
Slide 6: Historical Demand and 2008-09 Estimates
ENERGY PARTNERS, L.P. Historical Demand and 2008-09 Estimates U.S. PRODUCT CONSUMPTION EIA Growth Estimates 10 2008 2009 9 Mogas 0.8% 1.1% Distillate 1.2% 1.2% 8 Jet Fuel 1.2% 1.6% 7 Total 0.9% 1.2% MILLION BARRELS PER DAY 6 Motor Gasoline 5 Distillate Fuel Oil Jet Fuel 4 3 2 1 0 1998 1999 2000 2001
Slide 7: Historical FERC Tariff Index Regime
ENERGY PARTNERS, L.P. Historical FERC Tariff Index Regime Start Current PPI FG – 1 PPI FG PPI FG + 1.3% (1995 - 1999) (2000 – 2005) (2006 - 2010) Effects of Indexing on Tariff of $1/Bbl in 1994 Index Year Multiplier Index Value $1 tariff Basis $1.000 January 1, 1995 to June 30, 1995 1.002175 0.22% $
Slide 8: Historical FERC Tariff Index Regime
Ja nu ar y1 ,1 99 Ju 5 ly to 1, Ju 19 ne $0.900 $0.950 $1.000 $1.050 $1.100 $1.150 $1.200 $1.250 $1.300 $1.350 Ju 95 30 ly t o ,1 1, J 99 un 5 19 e Ju 96 30, ly to 19 1, Ju 96 19 n e Ju 97 30 ly t o ,1 1, Jun 99 7 19 e 98 30 Ju to ,1 ly Ju 99 1, 19 ne 8 Ju 99 30, ly to 19 1, Ju 99 20 ne 00 30 Ju to
Slide 9: Products Pipelines Revenues
ENERGY PARTNERS, L.P. Products Pipelines Revenues Includes Pacific, Calnev, WCT, CFPL, KMST, Plantation (51%), Cochin, Cypress and Transmix Terminal Revenues Average 33% of Total 1000 800 $ millions 600 Terminals 400 Pipelines 200 0 2005 2006 2007 2008 Plan 9
Slide 10: Terminals
ENERGY PARTNERS, L.P. Terminals Pacific, Calnev and CFPL Associated terminal revenues have experienced double digit revenue growth Drivers for growth Ethanol storage and blending Additive storage and blending − Lubricity − Red dye Expanding product slate 10
Slide 11: 2008 Product Pipeline Plan
ENERGY PARTNERS, L.P. 2008 Product Pipeline Plan Refined Products Refined Products Pipeline Volumes – Million Barrels Pipeline Revenues - $million (a) Percent Percent 2008 Plan 2007 Actual Change 2008 Plan 2007 Actual Change Pacific 455.1 438.3 3.8% 410.8 377.2 8.9% Calnev 51.9 49.4 5.1% 75.3 68.9 9
Slide 12: Expanding to Meet Market Demand
ENERGY PARTNERS, L.P. Expanding to Meet Market Demand Expansion Projects Approved and Underway Project Description In Service Cost - $MM Pacific Eugene Ethanol Blending Facility and tank modifications to provide 10% blending 2008 3.0 Fresno Terminal Expansion Add 80 MB tank and two lane truck loadin
Slide 13: Arizona East Line Expansion Complete
ENERGY PARTNERS, L.P. Arizona East Line Expansion Complete ELX June 2006 / EPX December 2007 ELX On budget of $210 MM Two months delay in service date (June, 2006) EPX Final cost of $153 MM is $8.5 MM over budget reflecting project scope changes Placed in service on schedule (December 2007)
Slide 14: CALNEV Expansion
ENERGY PARTNERS, L.P. CALNEV Expansion $23.7 MM in incremental expansion projects completed Increased capacity to 157,000 B/D Mainline Expansion (16” pipeline) $425.8 MM In service April 2011 Permitting/Engineering Design underway Initial capacity 200,000 B/D Can be increased to over 300,000 B/D w
Slide 15: TAMPA Pipeline Project
ENERGY PARTNERS, L.P. TAMPA Pipeline Project $25 MM 9-mile 8” pipeline to Tampa airport and 120,000 BBL Tank 20-year volume commitment from airline consortium Tank construction underway Pipeline route subject to City of Tampa franchise approval Expect franchise decision in February – however neighbo
Slide 16: California Renewable Fuel Opportunities (Near-term)
ENERGY PARTNERS, L.P. California Renewable Fuel Opportunities (Near-term) California Increase from 5.7% to 10% Ethanol Blend Rate mandate Effective 1/1/2010 $8 MM investment in storage and blending infrastructure Improvements to offloading and storage at certain of our thirteen terminal facilities 1
Slide 17: Pacific Northwest Biofuels Opportunities (Near-term)
ENERGY PARTNERS, L.P. Pacific Northwest Biofuels Opportunities (Near-term) Oregon 10% blend mandate City of Portland – converted 1/1/08 9 adjacent counties (to Portland) converted 1/15/08 Southern Oregon (Eugene) – converts 4/15/08 Washington State - 2% state wide average mandate - 11/30/2008 State
Slide 18: CFPL Ethanol (Near-term)
ENERGY PARTNERS, L.P. CFPL Ethanol (Near-term) Tampa/Orlando markets – approximately 20,000 B/D of ethanol demand at 10% blend rate Not mandated by state – attractive market economics and logistics, existing marine and rail infrastructure and 200,000 BBLS of storage that can be readily converted to
Slide 19: KMST Ethanol (Near-term)
ENERGY PARTNERS, L.P. KMST Ethanol (Near-term) Implement storage/blending capability by April 2008 Five terminal locations – Richmond and Chesapeake VA, Selma (Raleigh) and Greensboro, NC and Athens, GA Favorable infrastructure for accelerated implementation Adding blend capability to convention
Slide 20: Transportation of Batched Ethanol by Pipeline
ENERGY PARTNERS, L.P. Transportation of Batched Ethanol by Pipeline Batch denatured ethanol on CFPL’s 16” dedicated gasoline line Technical considerations Pipeline and Facility Integrity Seals/gasket and pump rotating elements Corrosion prevention and monitoring of corrosion inhibitor effectiven
Slide 21: Summary Of New Energy Act Mandate
ENERGY PARTNERS, L.P. Summary Of New Energy Act Mandate INCREASES MANDATE 9 Billion Gallons in 2008 36 Billion Gallons in 2022 REQUIRES NEW FEEDSTOCK SOURCES 21 Billion gallons of the new mandate in 2022 to be from “Advanced Biofuels” (non-conventional feedstocks such as cellulosic materials) AUTHOR
Slide 22: Renewable Mandate Timeline
ENERGY PARTNERS, L.P. Renewable Mandate Timeline 2,500 2,500 Energy Independence Act of 2007 non- Conventional Biofuels 2,000 Energy Independence Act of 2007 2,000 Additional Conventional Biofuels BARRELS PER DAY (000'S) Energy Policy Act of 2005 Conventional Biofuels 1,500 1,500 1,000 1,000 500 500
Slide 23: Ethanol Production Capacity and Demand
ENERGY PARTNERS, L.P. Ethanol Production Capacity and Demand PRODUCTION CAPACITY 2007 EOY ~ 8.1 BGal/Yr 2008 EOY ~ 11.9 BGal/Yr (Estimated) Additional capacity infrastructure encouraged by higher mandates DEMAND 2007 EOY ~ 7.3 BGal/Yr 2008 EOY ~ 10.1 BGal/Yr (Estimated) While 2007 Demand greatly out
Slide 24: Technical Challenges of Expanded Mandate
ENERGY PARTNERS, L.P. Technical Challenges of Expanded Mandate GRANTS AIMED TO SOLVE KNOWN CHALLENGES Authorizes $500 million annually for FY08-15 for the production of advanced biofuels that have at least an 80 percent reduction in lifecycle GHG emissions relative to current fuels Authorizes $25 mi
Slide 25: Logistical Implications of New Mandate
ENERGY PARTNERS, L.P. Logistical Implications of New Mandate 2.3 million bbls per day of biofuels to market at 36B gallons by 2020 1.0 million bbls per day conventional biofuels Scale of non-conventional production centers/feedstocks? Linking production centers with consuming markets Existing infras
Slide 26: Renewable Opportunities Long-term
ENERGY PARTNERS, L.P. Renewable Opportunities Long-term COMMERCIALLY WELL POSITIONED FOR NEW MANDATE EXISTING INFRASTRUCTURE Existing coast-to-coast participation in Biofuels Coastal marine and river terminals well positioned for imports and exports Many pipelines and terminals are distributed throu
Slide 27: SFPP Rate Case Update
ENERGY PARTNERS, L.P. SFPP Rate Case Update FERC Decision on 12/26/2007 Upheld previous Grandfathering determination FERC affirms full ITA and SFPP implementation methodology Certain adjustments to cost of service Broadened entitlement to reparations for interim rates and additional time periods Reh
Slide 28: ENERGY PARTNERS, L.P.
KINDER/MORGAN ENERGY PARTNERS, L.P.
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