Pembina Pipeline Corporation. C o r p o r a t e U p d a t e F e b r u a r y 2018 TSX: PPL; NYSE: PBA

Transcription

1 Pembina Pipeline Corporation C o r p o r a t e U p d a t e F e b r u a r y 2018 TSX: PPL; NYSE: PBA

2 Forward-looking statements and information This presentation contains certain forward-looking statements and information that are based on Pembina's expectations, estimates, projections and assumptions in light of its experience and its perception of historical trends as well as current market conditions and perceived business opportunities. In some cases, forward-looking information can be identified by terminology such as "expects", "will", "would", "anticipates", "plans", "estimates", "develop", "intends", "potential", "continue", "could", "create", "keep", and similar expressions suggesting future events or future performance. In particular, this presentation contains forward-looking statements, including certain financial outlooks, pertaining to, without limitation: EBITDA expectations, future capital program, capital expenditures, anticipated capacity and in-service dates for growth projects, enterprise value, counterparty exposure, fee-for-service cash flows, future dividends which may be declared on Pembina's common shares and any future dividend payment date; the ongoing utilization and expansions of and additions to Pembina's business and asset base, expectations regarding future commodity market supply, demand and pricing and supply and demand for hydrocarbon and derivatives services. Undue reliance should not be placed on these forward-looking statements and information as they are based on assumptions made by Pembina as of the date hereof regarding, among other things, the integration of the assets and entities acquired through the acquisition of Veresen Inc. (the "Transaction"), that favourable growth parameters continue to exist in respect of current and future growth projects (including the ability to finance such projects on favorable terms), future levels of oil and natural gas development, potential revenue and cash flow enhancement; future cash flows, with respect to Pembina's dividends: prevailing commodity prices, margins and exchange rates, that Pembina's businesses will continue to achieve sustainable financial results and that the combined company's future results of operations will be consistent with past performance of Pembina and Veresen and management expectations in relation thereto, the availability and sources of capital, operating costs, ongoing utilization and future expansion for the combined company, the ability to reach required commercial agreements, and the ability to obtain required regulatory approvals. While Pembina believes the expectations and assumptions reflected in these forward-looking statements are reasonable as of the date hereof, there can be no assurance that they will prove to be correct. Forwardlooking statements are subject to known and unknown risks and uncertainties which may cause actual performance and financial results to differ materially from the results expressed or implied, including but not limited to: the failure to realize the anticipated benefits or synergies of the Transaction following closing due to integration issues or otherwise and expectations and assumptions concerning, among other things: customer demand for the combined company's services, commodity prices and interest and foreign exchange rates, planned synergies, capital efficiencies and cost-savings, applicable tax laws, future production rates, the sufficiency of budgeted capital expenditures in carrying out planned activities, the impact of competitive entities and pricing; reliance on key industry partners, alliances and agreements; the strength and operations of the oil and natural gas industry and related commodity prices; the regulatory environment and the ability to obtain regulatory approvals; fluctuations in operating results; the availability and cost of labour and other materials; the ability to finance projects on advantageous terms; and tax laws and tax treatment. Additional information on these factors as well as other risks that could impact Pembina's operational and financial results are contained in Pembina's Annual Information Form and Management's Discussion and Analysis for the year ended December 31, 2016, and described in our public filings available in Canada at and in the United States at Readers are cautioned that this list of risk factors should not be construed as exhaustive. The forward-looking statements contained in this document speak only as of the date of this document. Except as expressly required by applicable securities laws, Pembina and its subsidiaries assume no obligation to update forward-looking statements and information should circumstances or management's expectations, estimates, projections or assumptions change. The forward-looking statements contained in this document are expressly qualified by this cautionary statement. Readers are cautioned that management of Pembina approved the financial outlooks contained herein as of the date of this presentation. The purpose of the financial outlooks contained herein is to give the reader an indication of the value of Pembina's current and anticipated growth projects, including with respect to the acquisition of assets pursuant to the Transaction. Readers should be cautioned that the information contained in the financial outlooks contained herein may not be appropriate for other purposes. In this presentation, we refer to certain financial measures such as adjusted EBITDA, adjusted EBITDA per share, adjusted cash flow from operating activities or adjusted cash flow per share, total enterprise value and operating margin, among others that are not determined in accordance with International Financial Reporting Standards ("Canadian GAAP"). Management believes these non-gaap measures provide an indication of Pembina's ability to generate liquidity through cash flow from operating activities and the expected effect of growth projects on Pembina's current business. These measures may also be used by investors and analysts for assessing financial performance and for the purpose of valuing an issuer, including calculating financial and leverage ratios. The information contained herein with respect to non-gaap measures may not be appropriate for other purposes. For more information about these non- GAAP measures, see the Appendix to this presentation. All financial information is expressed in Canadian dollars unless otherwise specified. 2

3 Presentation outline Leading North American Infrastructure Company Delivering on our promises: capital program execution Building on a strong track record of increasing value and decreasing risk Increased financial strength and enhanced financing flexibility The future is bright: positioning for long-term growth Pembina is a leading North American energy infrastructure company 3

4 Leading North American Infrastructure Company

5 Recent updates Closed Veresen acquisition on October 2, 2017 with essentially all integration now complete Placed $5.1 (1) billion of capital projects into service in 2017 Announced 2018 capital budget of $1.3 billion Announced ~$700 million (net) of secured capital projects during Q including: Duvernay infrastructure, Prince Rupert LPG Export Terminal & North Central Liquids Hub Issued $400 million in preferred shares (oversubscribed) Announced senior officer appointments Recent developments continue to support the future progression of Pembina (1) Total capital in service 2017 is based on original announced capital amount (does not include cost savings). See "Forward-looking statements and information" and "Non-GAAP measures." 5

6 Pembina's services reach natural gas, NGL and crude oil markets across North Amercia 6

7 Integrated, customer-focused services Empress, Sarnia and Corunna (Mainline Extraction, Fractionation, Distribution) Value chain extension opportunities Gas & NGL Value Chain ("HVP") Production Via NGTL NGL Storage Fractionation Distribution Conventional Pipelines NGL Midstream Prince Rupert LPG Export Terminal (secured) PDH/PP Consumption Gathering, Processing, Field Extraction Natural Gas Pipelines (Alliance) Mainline Extraction (Aux Sable) Fractionation (Aux Sable) NGL Distribution (Aux Sable) Oil & Condensate Value Chain ("LVP") Production Field Terminals Crude Oil Midstream Oil/C 5 /Oil Sands Conventional/Oil Sands Pipelines Terminalling Marketing Crude Oil Midstream Refining (Partial Upgrading) Consumption Pembina has a fully-integrated value chain for natural gas, NGL, crude oil and condensate See "Forward-looking statements and information." 7

8 Balance and diversification 23% Pipelines Operating Segment (2018 EBITDA) (1) 19% 58% Processing Midstream (NGL & Crude) Hydrocarbon Mix (2018 EBITDA) (1) 35% 35% 30% Crude Oil NGL Gas Currency Exposure (2018 EBITDA) (1) US 18% Canada 82% WCSB Bakken US Rockies Counterparty Exposure (3) 23% 77% Investment Grade (2) Non-Investment Grade Pembina is well diversified across key measures (1) Figures based on estimated contribution by segment, hydrocarbon or geography to Adjusted EBITDA in the respective time periods. Illustrative segments/geography may vary from figures reported in Pembina's financial statements. (2) Includes split-rated counterparties, which includes a counterparty that has an investment grade rating by one rating agency and a non-investment grade rating by the other rating agency. (3) Based on gross 60-day exposure of Pembina and Veresen. Counterparty ratings are representative of the counterparties' current rating as of January 5, 2018 for Pembina approximate exposure and as of November 30, 2017 for Veresen approximate exposure. Non-investment grade exposure that is secured with letters of credit from investment grade banks are considered investment grade. See "Forward-looking statements and information" and "Non-GAAP measures." 8

9 Delivering on our promises: excellence in capital program execution

10 Snapshot project execution highlights Safety metric (1) Project In-service date Completed on-time? Completed on-budget? Man Hours Travel (km) Conventional NEBC Expansion October 2017 On time On budget 750,000+ 2,900, Phase III Expansion June 2017 On time Under budget 7,300, ,200, Phase II Mainline Expansion April and September 2015 Slightly delayed On budget 1,400,000+ 9,700, Phase I Mainline Expansion December 2013 On time On budget 320,000+ 3,200, Gas Services Duvernay I November 2017 Ahead of schedule Under budget 149, , Musreau III April 2016 Ahead of schedule Under budget 134, , SEEP August 2015 On time Under budget 100,000+ 1,000, Saturn II August 2015 On time Under budget 500, , Musreau II December 2014 Ahead of schedule Under budget 200,000+ 1,800, Midstream RFS III June 2017 Ahead of schedule Under budget 580, , RFS II April 2016 One quarter delayed On budget 1,140,000+ n.a CDH June 2017 On time Under budget 350,000+ 1,200, Heavy Oil & Oil Sands Horizon Expansion July 2016 On time Under budget 244,000+ 1,500, Pembina has an exemplary track record of safe, on-time and on-budget project execution LTI Frequency (1) Project metrics for man hours, kilometers driven and lost-time injuries ("LTI") are based on contractors or sub-contractors only. See "Forward-looking statements and information" and "Non-GAAP measures." 10

11 Billions of dollars in fee-for-service capital projects recently brought into service 2017 In-service Growth Secured Growth Projects In-Service Capital Cost ($MM) In-service Capital Cost ($MM) Phase III Expansion June 30, 2017 $2,440 RFS III Fractionator June 30, 2017 $415 CDH June 30, 2017 $215 Total savings (under budget) ~$250 (1) Tower Gas Plant September 20, 2017 $340 Sunrise Gas Plant September 27, 2017 $405 Saturn Phase I Gas Plant November 1, 2017 $235 Midstream Partnership (other) Throughout 2017 $145 NEBC Expansion Late October 2017 $235 Altares Lateral Late October 2017 $70 Duvernay Complex November 1, 2017 $242 Redwater Infrastructure July 2017 $12 ENT Expansion Capital Throughout 2017 $130 NWR Sturgeon Refinery Throughout 2017 $180 Other laterals Throughout 2017 $70 Total 2017 In-service $5.1 BB (2) North Central Liquids Hub Late 2018 $150 Saturn Phase II Gas Plant Early/Mid 2018 $205 Midstream Limited Partnership Total $0.4 BB Duvernay II + infrastructure Mid to late 2019 $290 Gas Services Total $0.3 BB Phase IV & V Late 2018 $460 Other laterals Various $20 Conventional Pipelines Total $0.5 BB Prince Rupert Export Terminal Mid 2020 $250 Burstall Ethane Storage Late 2018 $140 Cavern Development Throughout 2018 $80 Redwater Infrastructure Various $118 Midstream Total $0.6 BB Total (2018+ Growth) $1.8 BB 2017 was transformational: ~$5.1 BB of projects recently completed + additional ~$1.8 BB of projects underway 1) Phase III, RFS III and CDH came into service on June 30, On a combined basis, the assets were under budget by approximately 8% of the total original capital cost of $2.8 billion. 2) Total capital in service 2017 is based on original announced capital amount (does not include cost savings). See "Forward-looking statements and information" and "Non-GAAP measures." 11

12 Adjusted EBITDA ($MM) Transformational growth recently completed in 2017 Historical Adjusted EBITDA and 2018 Outlook $3,000 MM $2.55 BB to $2.75 BB $2,500 MM $2,000 MM $750 MM to $850 MM $1,500 MM $1,189 MM $1,000 MM $920 MM $983 MM $500 MM E (1) Pembina is delivering on its promises and creating a stronger foundation for long-term growth (1) 2018 projected Adjusted EBITDA for Pembina reflects proportionate consolidation of equity accounted investments. Figures are approximate. See "Forward-looking statements and information" and "Non-GAAP measures." 12

13 Mboed Hydrocarbon pipeline transportation systems Net pipeline capacity 3,500 3,000 2,500 In-service Project under development Uncommitted project Hydrocarbon Liquids 2.7 MMbpd 330 Natural Gas MMboed 180 2, , , Mboed (2) Pre Expansion Phase I & II Nipisi + Mitsue Horizon Syncrude Cheecham Phase III Phase IV + V AEGS + (pre-2013) Vantage Alliance Pipeline (2) (Net) Total hydrocarbon transportation capacity could reach ~3.2 MMboed (1) Ruby Pipeline (2) (Net) Total (1) Pembina's 68 mbpd Vantage ethane pipeline is a key supply source for AEGS, and feeds into the total system capacity. (2) Alliance Pipeline and Ruby Pipeline capacities are presented net to Pembina and converted to mboed (thousands of barrels of oil equivalent per day) from million cubic feet per day (MMcf/d) at 6:1 ratio. See "Forward-looking statements and information." 13

14 MMcf/d + Further Duvernay Potential Creating the WCSB's largest third-party gas processor Net processing capacity 7,000 6,000 In-service Project under development Bcf/d (1) 368 5, , ,000 2,088 2,000 1, Cutbank - Initial Acquisition (2009) Cutbank - Expansions Kakwa River Acquisition Saturn Complex Resthaven Complex Younger Empress SEEP Duvernay I (Gross) Hythe / Steeprock (net) Aux Sable (net) Dawson (net) (2) Saturn Phase II (net) Duvernay II Large-scale field processing asset base complemented by strategically-located mainline extraction plants (1) All capacities are shown as net to Pembina unless otherwise noted. (2) Dawson assets form part of the Veresen Midstream partnership and include the Tower, Sunrise and Saturn gas processing facilities. See "Forward-looking statements" 14

15 Mbpd Largest fractionation capacity in the WCSB Net fractionation capacity In-service 285 mbpd RFS I RFS Debottleneck RFS C3+ Debottleneck Acquisition (2012) RFS II RFS III Sarnia Aux Sable (Net) Total 285 mbpd of NGL fractionation capacity across premier liquids markets: Edmonton, Sarnia and US midcontinent See "Forward-looking statements and information." 15

16 MMbbls Significant growth in hydrocarbon storage capacity Net storage capacity 16.0 Underground Storage Capacity (Redwater and Veresen) Above Ground Storage Capacity 14.2 MMbbls In-service Project under development MMbbls Provident Acquisition (2012) (initial Redwater capacity) 3 Caverns (2013) 2 Caverns (2015) 3 Caverns (2016) 3 Caverns (2018) Veresen Burstall Storage (2018) Edmonton North Terminal (ENT) (2010) ENT Expansion (2016) Canadian Diluent Hub (CDH) (2017) Total Capacity One of Canada's largest storage owners See "Forward-looking statements and information." 16

17 Building on a strong track record of increasing value and decreasing risk

18 Financial Guard Rails 2015A 2018E 1 Maintain target of 80% fee-based contribution to EBITDA ~77% ~87% 2 Target <100% payout of fee-based distributable cash flow by 2018 (3) ~135% ~90% 3 Target 75% credit exposure from investment grade and secured counterparties 79% ~80% (1) 4 Maintain strong BBB credit rating (2) ~16% FFO/Debt ~20% FFO/Debt 5 Target 8% -10% cash flow per share growth without putting Guard Rails at risk Low End High End We remain committed to building our business within the Guard Rails (1) Based on gross 60-day exposure. Counterparty ratings are representative of the counterparties' current rating as of January 5, 2018 for Pembina approximate exposure and as of November 30, 2017 for Veresen approximate exposure. Non-investment grade exposure that is secured with letters of credit from investment grade banks are considered investment grade. (2) Based on Standard and Poor's methodology and adjustments. (3) Illustrative calculation based on total common share dividends, preferred share dividends, interest, general and administrative expenses and illustrative cash taxes as compared to consolidated fee-for-service operating margin. See "Forward-looking statements and information" and "Non-GAAP measures." 18

19 Maintain target of 80% fee-based contribution to EBITDA Contribution by revenue type ($MM) $3 77% fee-based 77% fee-based 80% fee-based 87% fee-based Take-or-pay/Cost-of-service $3 Fee-for-service Product margin $2 Frac spread ~5% ~8% ~5% ~16% $2 $1 ~1% ~22% ~4% ~19% ~13% ~15% ~19% ~71% Fee-based EBITDA $1 ~33% ~64% ~61% ~44% A 2016A 2017E 2018E Pembina has significantly grown its fee-based contribution to EBITDA (1) figures based on actual results (including internal allocations), while forward years are based on Pembina's forecast and actual results may vary depending on asset utilization, project in-service dates, commodity pricing and other factors. See "Forward-looking statements and information" and "Non-GAAP measures." 19

20 Credit considerations and counterparty credit stats Non Investment Grade 23% Split Rating 18% 60-day credit exposure (1,3) Retail 14% Refining 2% Marketing 12% Cooperative & Other 3% AA- to AA+ 12% Financial 0% Chem 15% A- to A+ 19% BBB- to BBB+ 28% Non-investment grade and split-rated (3) overview Pembina assesses all counterparties during on-boarding process and actively monitors credit limits and exposures across the business ~200+ counterparties of varying operational scope and financial size Overall 60-day credit exposure: 59% with investment grade counterparties and 18% with split-rated (3) counterparties Non-investment grade counterparties may be required to provide one of the following (2) : Parental guarantee, letter of credit, pre-payment, cash deposit Non-investment grade and split-rated counterparty exposure is diversified among various industries Midstream 12% E&P 43% (1) Based on gross 60-day exposure of Pembina and Veresen. Counterparty ratings are representative of the counterparties' current rating as of January 5, 2018 for Pembina exposure and as of November 30, 2017 for Veresen exposure. Non-investment grade exposure that is secured with letters of credit from investment grade banks are considered investment grade. Low-risk and diverse counterparty exposure (2) Depending on financial materiality, Pembina uses its discretion regarding requirements for non-investment grade counterparties. (3) Split-rated denotes a counterparty has an investment grade rating by one rating agency and a non-investment grade rating by the other rating agency. See "Forward-looking statements and information" and "Non-GAAP measures." 20

21 $/Share Dividend growth supported by growing cash flow $3.00 $2.50 $2.00 $1.50 $1.00 $ Dividend per share Adjusted cash flow from operating activities per share Strong history of growing Pembina's dividend and adjusted cash flow per share See "Forward-looking statements and information" and "Non-GAAP measures." 21

22 Increased financial strength and enhanced financing flexibility

23 $BB Capital expenditures and financing objectives $3.0 $2.0 $1.0 - Funding plan for 2018 capital (~$1.3 BB) Capital Expenditures Internal Equity DRIP Preferred Shares Common Equity Debt Proceeds from asset disposition (1) Ongoing financing objectives Finance growth ~50/50 debt/equity over the long term Maintain strong 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 remains actively engaged with the rating agencies Bi-annual business/operations updates Review of potential transactions Pembina s current plan is to fund growth without dilution (1) On March 7, 2017, Pembina announced the suspension of its Premium Dividend and Dividend Reinvestment Plan ("DRIP"), effective April 25, See "Forward-looking statements and information" and "Non-GAAP measures." 23

24 Debt / EBITDA (2018E) Commitment to a strong BBB credit rating Debt/Adjusted EBITDA (2018 Forecast) (1) Leverage comparison across industry (4) 4.5x 4.0x 3.5x 3.0x 2.5x 2.0x 3.75x x 3.9x 2018 Forecast Target Fund from Operations/Debt (2018 Forecast) (3) 9.0x 8.0x 7.0x 6.0x Pembina continues to employ less leverage than its peers 25% 20% 15% 10% 5% - 18% - 22% 19% 2018 Forecast Target Debt to Total Capitalization (2018 Forecast) (2) 5.0x 4.0x 3.0x 46% 36% 26% 16% 6% (4%) 38% - 40% 38% 2018 Forecast Target 2.0x 1.0x - BBB BBB- BBB- A- BBB BBB+ BBB+ BB+ BBB BBB+ Ba2 BBB Pembina remains committed to prudent financial management & maintaining a strong BBB credit rating (1) Debt to adjusted EBITDA calculated as total debt divided by adjusted EBITDA, on a proportionate consolidation basis. (2) Debt to total capitalization calculation assumes exclusion of debt related to Veresen's subsidiaries. (3) Debt to funds from operations defined and calculated as per Standard and Poor's methodology. See "Forward-looking statements and information" and "Non-GAAP measures." (4) Source: CIBC World Markets, Barclays, (November 2017). Peers include AltaGas, Canadian Utilities, Emera, Enbridge, Enterprise Product Partners, Fortis, Gibson, Inter Pipeline, Keyera, Plains All American, TransCanada. 24

25 The future is bright: positioning for long-term growth

26 Our future is bright: many large-scale potential projects Project portfolio Prince Rupert Export Terminal (Secured) Veresen Midstream Peace Pipeline Expansion PDH / PP Facility ~$6.9 BB of projects in-service/secured 2017 / ~$20 BB Unsecured Growth Duvernay development Alliance Pipeline Expansion 2017 / Potential projects across the value chain PDH/PP Facility Peace Expansion (pump stations) Alliance Expansion Jordan Cove LNG Project & Pacific Connector Pipeline LNG Jordan Cove LNG Project & Pacific Connector Pipeline Duvernay development Incremental Veresen Midstream Prince Rupert Terminal Recently secured in December 2017 ~$250-$270 MM expected capital cost Many large-scale potential projects to continue Pembina's growth trajectory Map for illustrative purposes only. See "Forward-looking statements and information." 26

27 Supporting growth in the liquids rich Duvernay today and in the future Duvernay I (in-service November 1, 2017 ) Fully-contracted Duvernay I 100 MMcf/d shallow cut gas plant (gross) and field hub infrastructure NGL extraction capacity of ~5,500 (2) bpd Duvernay II + additional infrastructure ($290 MM) Developing first tranche of infrastructure under the 20-year agreement with a significant area of dedication across Chevron's Duvernay land base Pembina will develop and construct: Raw product separation and water removal infrastructure Condensate stabilization with ~30 mbpd of handling capacity Duvernay II 100 MMcf/d shallow cut gas plant (replica of Duvernay I) 10-inch condensate lateral Underpinned by 20 year fee-for-service and fixed-return arrangements Expected in-service date mid to late-2019 (3) Pipeline transportation and fractionation agreements also executed Pembina is substantially increasing our competitive position in the Duvernay (1) Lands shown on the illustrative map are based on current public data and represent all Chevron regional lands; not all lands are dedicated exclusively to Pembina. (2) Subject to gas compositions. (3) Subject to regulatory and environmental approval. Source: IHS AccuMap. Map is for illustrative purposes only. See "Forward-looking statements and information. 27

28 The future: doing more with molecules we already handle Challenge: the WCSB is oversupplied with numerous hydrocarbons Value-add opportunity Opportunity: value-add infrastructure development and market access to create demand End use / value-add product Natural Gas (C 1 ) - Jordan Cove Liquefied Natural Gas Terminal - Gas-to-Liquids Conversion - Address global demand for clean burning natural gas - Gasoline, diesel, methanol Ethane (C 2 ) - Pembina is largest transporter of C 2 ; has potential to aggregate supply to support new infrastructure - Polyethylene: most globally used polymer (plastic's foundation) Propane (C 3 ) - PDH/PP Facility and Global LPG Exports - Polypropylene: 2 nd most globally used polymer (plastic's foundation) and growing emerging market propane demand Butane (C 4 ) - Alkylation - Alkylate: gasoline blending additive Condensate (C 5 +) - Diluent Terminal - CDH: cost-effective domestic supply near end market Evaluating numerous opportunities to enhance customer netbacks and support long-term growth See "Forward-looking statements and information." 28

29 Proven track record of value chain investment and extension Integrated Value Chain Initial Extension Investment Follow on Investment Highlights Pembina system constructed to bring product from Drayton Valley to Edmonton (January 1954) $300 MM Acquisition of Cutbank Complex from Talisman (April 2009) $3 BB+ $1.5 BB+ Largest NGL feeder system in WCSB Largest crude oil feeder pipeline system in WCSB One of the largest 3 rd party gas processors in WCSB ~1.8 Bcf/d in total field gas processing from ~300 MMcf/d at acquisition Completed the acquisition of Paramount's Kakwa River facility (March 2016) $3.2 BB Acquisition of Provident Energy, including RFS Fractionation Complex (January 2012) $2 BB+ Largest fractionation complex in Canada (increased capacity from initial 64 mbpd to over 200 mbpd) Largest ethane and propane supplier in Canada Largest cavern storage operator in western Canada $9.4 BB Acquisition of Veresen Inc. (October 2017) $10 BB+ (unsecured growth opportunities) Creates a parallel natural gas value chain Further diversification and enhances customer service offerings Increases growth portfolio PDH/PP Facility $1.9-$2.1 BB (PDH/PP Facility) $250-$275 MM (LPG Export) LNG opportunity Currently in FEED study for proposed PDH/PP Facility Board approval to develop the Prince Rupert LPG Export Terminal Filed FERC application for proposed Jordan Cove LNG Once Pembina enters a business line, we are committed to follow on investment, growth, and economies of scale LPG Export LNG See "Forward-looking statements and information." 29

30 Propane Volume (Mbpd) WCSB propane market dynamics Illustrative WCSB propane supply & demand (1)(2) The WCSB has an overabundance supply of propane Propane market dynamics support opportunities for Pembina to develop new infrastructure Integrated PDH and PP facility Prince Rupert LPG export terminal Pembina is the largest WCSB marketer of propane Alberta Demand Eastern Canadian Demand CKPC PDH (550 kta) Competitively positioned to supply our infrastructure opportunities under evaluation plus potentially supply other infrastructure under development by third-parties Inter Pipeline PDH (525 kta) Kinder Morgan Cochin Deliveries Excess Propane Supply Propane Supply Propane Supply (Upside Case) Propane market conditions are very supportive of value-add infrastructure (1) Source: AER, company filings, Internal forecasts, ICF International. (2) Timelines noted are meant to be illustrative and actual schedule may vary. Upside case includes illustrative potential production growth associated with potential LNG development and Alliance Pipeline expansion. See "Forward-looking statements and information." 30

31 PDH/PP investment rationale: Alberta propane market conditions Increasing Alberta Propane Supply Revolution in unconventional drilling and NGL production has created an abundance of propane production RFS II & RFS III fractionators added ~40 mbpd of propane production capacity in the last two years Other midstream companies have also added propane capacity Demand Access Challenges Alberta produces more than 5x the propane it consumes (export driven market) No existing propane-based petrochemical production No pipeline egress (propane exported 100% by rail) Pricing Impacts Alberta propane is priced based on a rail-cost differential to major US markets Market imbalance creates opportunity to produce propylene through the processing of cost-advantaged Alberta propane 31

32 Proposed PDH/PP Facility overview (1) Proposed PDH/PP Facility Different grades of PP have different characteristics Pembina and PIC are progressing a proposed world-scale integrated PDH/PP production facility to be located in Alberta's Industrial Heartland in close proximity to Pembina's Redwater Complex The expected capacity of the facility is ~550,000 metric tonnes per year, consuming 22,000 bpd of propane PP would be rail loaded and marketed throughout North America and overseas Impact Copolymer Random Copolymer Homopolymer Stiffness Automotive Housewares Dairy containers Housewares Packaging Blow molded bottles Carpets, diapers Bottle caps, cups and containers Flexible packaging Pembina is proposing development of a world-scale, integrated PDH/PP facility in Alberta's Industrial Heartland (1) The project is subject to approval of Pembina and PIC's Board of Directors, as well as required approvals. See "Forward-looking statements and information." 32

33 CKPC's Alberta PDH/PP Project: key milestones Opportunity Identification Purchased 2,200 acres of lands adjacent to RFS PDH/PP only requires ~400 acres PIC and Pembina announce they would be jointly evaluating feasibility of an Alberta-based PDH/PP facility Development Stage Detailed feasibility study for the project completed Awarded $300 MM in royalty credits (1) from Alberta's Petrochemicals Diversification Program Executed 50/50 JV agreements and formed Canada Kuwait Petrochemical Corporation (CKPC) Front End Engineering Design No Environmental Impact Assessment required determination from AEP April 2017 Executed PDH & PP process technology licenses in July 2017 Primary FEED contract awarded in Q Final Investment Decision Completion of primary FEED contract expected in late 2018 Followed by Final Investment Decision from Pembina and PIC's Board of Directors (PIC approval includes Kuwait Petroleum Corporation's Board of Directors) Detailed Engineering, Procurement & Construction Commence detailed engineering, procurement and construction (1) Conditional award from the Alberta Government's Petrochemicals Diversification Program. The project is subject to approval of Pembina and PIC's Board of Directors, as well as required approvals. See "Forward-looking statements and information." Currently progressing FEED study of proposed PDH/PP Facility 33

34 Prince Rupert LPG Export Terminal Developing a Prince Rupert LPG Export Terminal with an expected capital cost of $250 to $270 million Permitted up to ~25 mbpd of LPG export capacity Site features sheltered berth, adequate existing dock infrastructure, and well-established rail connections between Redwater, AB and Watson Island Offers efficient shipping routes to the Americas (South, Central) and Asia LPG will be largely sourced from Pembina's Redwater Complex Secured a long-term export permit Expected to be placed into service mid-2020, subject to regulatory and environmental approval Prince Rupert export terminal will provide our customers with international market access See "Forward-looking statements and information." 34

35 Jordan Cove LNG project Jordan Cove LNG Terminal 7.8 MMTPA (1) (~1.3 Bcf/d) greenfield liquefied natural gas export facility Price competitive with USGC brownfield on a delivered into Tokyo basis 9 days shipping to Tokyo with no hurricane risk or Panama Canal risk Access to long-term and diverse natural gas supply from WCSB and US Rockies Large-scale existing regional gas transportation network Pacific Connector Gas Pipeline ~229 mile (~369 km) greenfield pipeline to connect Malin Hub in southern Oregon to Jordan Cove Terminal Key Milestones FERC Certificate and other required regulatory approvals Finalize agreements with existing offtakers Securing offtake for remaining capacity Secure project financing (1) MMTPA refers to million tonnes per year of liquefied natural gas. See "Forward-looking statements and information." Jordan Cove is the most advanced LNG project on the west coast of North America 35

36 Summary

37 We continue to deliver on our promises Proven history of safe and reliable operations while developing enduring relationships with local communities Our long-term strategy remains unchanged and continues to create significant shareholder value Enhanced customer service offering, scale and diversification Substantial portfolio opportunities support Pembina's 8% to 10% adjusted cash flow per share growth target Working for the interests of all Pembina's stakeholders See "Forward-looking statements and information" and "Non-GAAP measures." 37

38 CONTACT US Pembina Pipeline Corporation Suite th Avenue S.W. Calgary, Alberta T2P 1G1 investor-relations@pembina.com Toll free: Phone:

39 Appendix

40 Conventional Pipelines ALBERTA Pipeline operational excellence: 98% reliable (YTD Q3 2017) Proximal to prolific geology TAYLOR FORT ST JOHN GRANDE PRAIRIE DUNVEGAN VALLEYVIEW FOX CREEK WHITECOURT SWAN HILLS DRAYTON VALLEY FORT MCMURRAY FORT SASKATCHEWAN EDMONTON Q revenue volumes: 780 mbpd (~21% increase from Q3 2016) YTD 2017 revenue volumes: 722 mbpd (~10% year-over-year increase) Connected to refineries, export pipelines, fractionation and petrochemical facilities Diverse producers and product types with over 300 receipt points EMPRESS, ALBERTA CAROLINE EMPRESS VANTAGE PIPELINE SEEP NEBC/Western System Peace System Drayton Valley System Liquids Gathering System (LGS) Northern System Swan Hills System Brazeau NGL System STATELINE TIOGA, NORTH DAKOTA Leader in conventional hydrocarbon products gathering business See "Non-GAAP measures." 40

41 Mbpd Our Conventional Pipeline revenue volumes continue to grow mbpd 614 mbpd 650 mbpd 722 mbpd mbpd 417 mbpd 456 mbpd 492 mbpd Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Crude & Condensate Pembina's Conventional Pipeline business continues to see strong system volume growth NGL See "Forward-looking statements and information" and "Non-GAAP measures." 41

42 Crude Oil Midstream ALBERTA Develop and provide terminal, hub & storage services to support the energy industry TAYLOR PRINCE GEORGE Gas Processing Plant Redwater Fractionator Midstream Storage Facility Truck Terminal Rail Terminal Midstream Operations Other Pembina Pipelines Third Party Pipelines EDMONTON PEMBINA NEXUS TERMINAL CALGARY FORT MCMURRAY FORT SASKATCHEWAN ~1.4 mmbbls of above ground crude oil and condensate storage capacity Access to approximately 1.2 mmbpd of crude oil and condensate supply through connected pipelines Revenue generated from multiple service offerings and commodity types Opportunities exist in various market conditions Strategically positioned assets continue to deliver strong performance despite challenging commodity markets See "Forward-looking statements and information." 42

43 Our Midstream assets are well-positioned and interconnected Synthetic Redwater Synthetic Diluent Oil Sands Diluent Pipelines Namao Crude Canadian Diluent Hub Local Refineries Export Crude Pipelines Potential connections Current / under development connections Edmonton North Terminal Edmonton Diluent Pool Heavy Crude Interconnectivity between conventional, heavy oil, NGL pipelines, storage and downstream markets is key to value creation See "Forward-looking statements and information." 43

44 Midstream assets are positioned to create significant optionality Redwater Complex PNT-H (Canadian Diluent Hub) PNT-N (Namao) Cloverbar Hub PNT-E (Edmonton North Terminal) Pipeline Alley Pembina Crude Oil Pipelines Pembina NGL Pipelines Strategically located, difficult to replicate, and integrated asset base creates competitive advantage See "Forward-looking statements and information." 44

45 Oil Sands & Heavy Oil Syncrude Pipeline Horizon Pipeline Cheecham Lateral Nipisi Pipeline Mitsue Pipeline Peace Pipeline Operational excellence: ~98% reliable (Q3 2017) Diverse connectivity to various industry hubs for crude oil and condensate Long-life contracts with credit worthy counterparties Pipeline System Syncrude Horizon Cheecham Nipisi & Mitsue Contracted Capacity (bpd) 389, , , ,000 Contract Type Cost-of-Service Fixed Return Fixed Return Fee-for-Service Initial Term 25 years 25 years 25 years 10 years Shippers Syncrude Partnership: Suncor 54% Imperial Oil 25% Sinopec 9% Nexen 7% Mocal 5% CNRL Conoco Total CNOOC CNRL Cenovus PMLP Map for illustrative purposes only, using third-party info. One of Canada's largest oil sands and heavy oil pipeline operators See "Forward-looking statements and information." 45

46 Gas Services Kakwa River Cutbank Complex (Musreau I, II & III) Resthaven Saturn I & II Duvernay I ALBERTA Fort McMurray Edmonton Positioned in active and emerging NGL rich plays Provide gas gathering, compression, condensate stabilization, shallow cut and both sweet and sour deep cut processing services 693 MMcf/d shallow cut and 1,079 MMcf/d (net) deep cut gas processing capacity Q average revenue volumes: 1,024 MMcf/d (15% increase vs. Q2 2016) Facilities placed into service / acquired in 2016 Musreau III, Resthaven Expansion, Kakwa River Duvernay I and Field Hub placed into service November 2017 Duvernay II and infrastructure under development Gas Processing Plant Calgary Redwater Fractionator Pembina Pipelines Leader in third-party gas processing Maps for illustrative purposes only (does not show SEEP). See "Non-GAAP measures." 46

47 MMcf/d Growing volumes in Gas Services 1,200 1, Revenue Volumes (1) Gas Services is one of Pembina's fastest growing businesses (1) Volumes at Musreau exclude deep cut processing as those volumes are counted when they are processed through the shallow cut portion of the plant. (2) See "Non-GAAP measures." 47

48 NGL Midstream Redwater West: 210 mbpd of NGL fractionation capacity and 8.3 mmbbls of finished product cavern storage Industry-leading rail-based terminal (largest NGL rail yard in Canada) with unit train capability 320 MMcf/d (net to Pembina) Younger extraction and fractionation facility in northeast B.C. Empress East: 2.1 bcf/d capacity in the straddle plants at Empress, Alberta 20 mbpd of fractionation capacity and 1.1 mmbbls hydrocarbon of cavern storage in Sarnia, Ontario 5.3 mmbbls of hydrocarbon storage at Corunna, Ontario 15 MMbbl (net) commercial cavern storage Gas Processing Plant Fractionator Midstream Storage Facility Truck Terminal Rail Terminal Pembina Pipelines Third Party Pipelines Corunna Pembina has a leading position in Canadian NGL markets Maps for illustrative purposes only. 48

49 Over $1 billion of capital projects completed at Redwater RFS I Operating 73,000 bpd C2+ fractionator RFS II In service 73,000 bpd C2+ fractionator commissioned March 2016 RFS III In service 55,000 bpd C3+ fractionator commissioned June 2017 Rail Loading Operating & Under Construction Expanding facility to handle 250+ cars per day. Ability to load crude, LPG, diesel, propylene and condensate NWR Sturgeon Refinery Terminalling Under Construction Truck and rail loading, storage, as well as handling and processing equipment for a variety of products delivered from North West Refining Cavern Expansion Under Construction Cavern development program at a to store products ranging from NGL mix to LPG to ethylene Control Centre & Office Opened Q ,000 square feet of office space for 200+ employees $1 billion in capex, 1,000 workers, 100 new permanent employees and over 2,000,000 construction man hours See "Forward-looking statements and information." 49

50 Veresen Assets ALBERTA Pipeline business includes: 100% interest in AEGS, 50% interest in Alliance and a 50% convertible interest in Ruby Gas services business includes: 47% (1) interest in Veresen Midstream (gas processing plants, liquids hubs and pipeline laterals) Midstream business includes: Aux Sable (42.7% interest in Aux Sable U.S. and 50% interest in Aux Sable Canada) 100% interest in Burstall ethane storage facility (under construction) (1) As of June 30, Maps for illustrative purposes only. See "Non-GAAP measures." Transformational corporate acquisition closed on October 2,

51 Non-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 unlikely to be comparable to similar measures presented by other companies. Pembina uses the non-gaap terms: Total Enterprise Value (market value of Pembina's common shares plus preferred shares and convertible debentures plus senior debt less cash and cash equivalents), Adjusted EBITDA (earnings for the period plus share of profit (loss) from equity accounted investees (before tax, depreciation and amortization) plus net finance costs plus income taxes plus depreciation and amortization (included in operations and general and administrative expense) and unrealized gains or losses on commodity-related derivative financial instruments. Adjusted EBITDA also includes adjustments for loss (gain) on disposal of assets, transaction costs incurred in respect of acquisitions, impairment charges or reversals and write-downs in respect of goodwill, intangible assets and property plant and equipment, and non-cash provisions), Adjusted Cash Flow from Operating Activities (cash flow from operating activities plus the change in non-cash operating working capital, adjusting for current tax and share-based payment expenses, and deducting preferred share dividends declared), and the additional GAAP term Operating Margin (gross profit before depreciation and amortization included in operations and unrealized gain/loss on commodity-related derivative financial instruments). Adjusted EBITDA is used interchangeably with EBITDA in this presentation. Management believes these Non-GAAP measures provide an indication of the results generated by Pembina's business activities and the value those businesses generate. Investors should be cautioned that these Non-GAAP measures should not be construed as an alternative to net earnings, cash flow from operating activities or other measures of financial performance determined in accordance with GAAP as an indicator of Pembina's performance. For additional information with respect to financial measures which have not been identified by GAAP, including reconciliations to the closest comparable GAAP measure, see Pembina's Management's Discussion and Analysis for the fiscal year ended December 31, 2016 available on SEDAR at or in Pembina's annual report on Form 40-F for the fiscal year ended December 31, 2016 available on EDGAR at 51