Enbridge Inc. · TSX:ENB
Enbridge — TD Securities Calgary Energy Conference 2014
26 slides from Enbridge's conference presentation, Jul 9, 2014
Slide 1: Market Access - The Strategic Imperative Continues
Market Access - The Strategic Imperative Continues Al Monaco, President & CEO TD Securities - Calgary Energy Conference July 9, 2014
Slide 2: Agenda
Agenda 1. The global energy context 2. North American crude oil fundamentals 3. Market access imperative 4. Executing infrastructure investment programs 2
Slide 3: Legal Notice
Legal Notice This presentation includes certain forward looking information (FLI) to provide Enbridge shareholders and potential investors with information about Enbridge and management’s assessment of its future plans and operations, which may not be appropriate for other purposes. FLI is typically
Slide 4: Enbridge Footprint
Enbridge Footprint Gas 23% Liquids Pipelines 9% 68% Power, International, & Energy Services 4
Slide 5: Global Energy Outlook
Global Energy Outlook • Energy demand growing Global energy supply mix 250 • Energy growth decoupled from GDP 2040 2010 • Shifting supply mix QBtu • All sources of supply required to meet global demand 0 5
Slide 6: Global Crude Oil Demand Outlook
Global Crude Oil Demand Outlook • Oil consumption grows by 17 MMbpd (2030) • Growth driven by non-OECD countries - China +6 MMbpd • OECD demand growth flat MMbpd 120 100 80 60 40 20 0 2012 2020 2025 2030 Canada & U.S. Other OECD Non-OECD Source: EIA 6
Slide 7: Global Supply Growth
Global Supply Growth + 14 MMbpd by 2025 16 14 Other 12 10 OPEC 8 6 4 Canada & U.S. Enbridge’s systems are accessible to 2/3rd of 2 incremental supply growth 0 Sources: EIA, CAPP, Enbridge Internal Forecasts 7
Slide 8: North American Crude Supply Growth
North American Crude Supply Growth + 7 MMbpd by 2025 MMbpd 4.0 3.5 Cardium, Viking, Duvernay Niobrara 3.0 Other 2.5 Permian Basin 2.0 1.5 Oil Sands Eagle Ford 1.0 0.5 Bakken 0.0 Heavy Light Sources: Enbridge Internal Forecast and External Forecasts 8
Slide 9: U.S Crude Demand and Sources of Supply
U.S Crude Demand and Sources of Supply U.S. production displaces waterborne imports 16 12 8 4 0 2010 2015 2020 2025 2030 US Production Other Imports Imports from Canada Sources: EIA 9
Slide 10: North American Refinery Markets
North American Refinery Markets Eastern Canada & PADD I 2 MMbpd Refining Capacity PADD II 3.5MMbpd Refining Capacity PADD III 8 MMbpd Refining Capacity Light Markets • East Coast • Eastern PADD II • PADD III Heavy Markets • PADD II Source: StatsCan, EIA, Enbridge Internal Forecasts • PADD III
Slide 11: Challenge #1 – Historic Crude Flow Pattern
Challenge # 1 – Historic Crude Flow Pattern Reconfiguration of pipeline grid underway
Slide 12: North American Regional Pricing Disparities
North American Regional Pricing Disparities Peak Heavy Differentials 1 Year ended June 30, 2014 WCS - Maya ($34.41) Alberta WCS - WTI ($41.20) Pacific Light $92 AECO WCS - Brent ($51.94) $16.46 $104 $116 $3.77 WCS - Pacific ($52.38) (LNG) WCS $78 Bakken Light $95 Brent $112 * Light Crude WTI Heavy C
Slide 13: Challenge #2 – The Cost of Adding NA Production
Challenge #2 – The Cost of Adding NA Production Global price signals required to induce investment 120 Kashagan Field Oil Sands - Breakeven Price (Brent - USD/bbl) Mining 100 Ultra- deepwater US 80 Deepwater – Oil Sands Tight Oil Gulf of Mexico - SAGD Oil Sands – Mining & Upgrading 60 40 Arctic 20 R
Slide 14: Challenge #3 – Opposition to Energy Development
Challenge #3 – Opposition to Energy Development Stakeholders require more of energy companies GHGs and High climate profile change incidents Opposition to energy development Well- National organized Debate opposition 14
Slide 15: Market Access Priorities
Market Access Priorities (2) ee b. a, OP WH Regional Infrastructure WH Inland to Coastal Markets Wl «Coastal to Global 3/N_—
Slide 16: Liquids Pipelines - Regional Infrastructure
Liquids Pipelines - Regional Infrastructure Alberta Bakken Norealis Saskatchewan Enbridge Mainline Athabasca Terminal Terminal Saskatchewan System (ENF) North Dakota System Cheecham Terminal Bakken Expansion Project Bakken Access Program Berthold Rail Kirby Lake Sandpiper Terminal Weyburn Cromer Ste
Slide 17: Capacity Outlook – WCSB Takeaway
Capacity Outlook – WCSB Takeaway* Producers placing high value on market access and optionality MMbpd 9.0 8.0 • Keystone XL • ENB Northern Gateway 7.0 • TransMountain Expansion • Energy East 6.0 5.0 4.0 3.0 ENB 2.0 1.0 OTHER 0.0 2013 Enbridge Forecast 2013 Enbridge Upside Forecast Optimal Pipeline C
Slide 18: Enbridge Providing New Market Access
Enbridge Providing New Market Access Light Oil Market Access Norman Wells Eastern Access Zama +250 kbpd Fort McMurray Light +50 kbpd Edmonton Heavy Western USGC Hardisty Regina +50 Access Seattle Cromer kbpd St. John Clearbrook Light Superior Montreal Portland +250 Buffalo Nanticoke +50 Casper kbpd
Slide 19: Northern Gateway
Northern Gateway Northern Gateway to connect Canada to global markets - Approved in June 2014 Priorities: - Meet 209 conditions - Continue to engage with communities - Work with the Gov’t of BC on 5 conditions 19
Slide 20: Narrowing Regional Pricing Disparities
Narrowing Regional Pricing Disparities WCS - Maya • PADD II demand (BP Whiting) $10 • Enhancements and $0 optimization ($10) - Drag reducing agent ($20) - Improved scheduling - Quality pooling ($30) - Line allocations ($40) * ($50) 20
Slide 21: Pricing Outlook (2020)
Pricing Outlook (2020) Regional prices reflect pipeline transportation costs Alberta Pacific Light $93 $100 $96 WCS $82 Bakken Light $95 Brent Inland prices $106* increase relative to WTI global prices 2020 IHS Prices $98 Light Crude LLS Heavy Crude Maya $105 Source: IHS June 27, 2014 Long Range For
Slide 22: Executing the Capital Program
Executing the Capital Program Projects In-Service • Major projects capability 2008 – Q1 2014 - Supply chain management $18B - Skills and processes - On time, on budget, safely Completed at 3% under budget Consolidated Credit Facilities & Cash* • Financing $19.0 Cash - Ample liquidity Unutilized $12.
Slide 23: Earning Public Trust
Earning Public Trust • Putting safety and environment first • Exceeding regulatory requirements • Engaging stakeholders • Investing in world class performance Gain the benefits of economic development in a sustainable way 23
Slide 24: Industry Leading EPS & DPS Outlook
Industry Leading EPS & DPS Outlook $42 Billion Enterprise Wide Capital Program An Industry Leading EPS* An Industry Leading DPS Growth Outlook (but lumpy) Growth Outlook (smoother) • EPS Growth • Tilted Return Projects • Surplus Cash - $7.5B Line 3 Flow Replacement • New Growth Platforms • Sponsored
Slide 25: Key Takeaways
Key Takeaways • Global energy consumption rising • North America well-positioned • Good progress, but market access still challenging • Energy development critical to Canadian economic development • More balanced discussion on the importance of energy Market Access - The Strategic Imperative Continu
Slide 26: Question & Answer Period
Question & Answer Period
Enbridge — TD Securities Calgary Energy Conference 2014 on 6ix