Morgan Stanley Marcellus-Utica Conference

Transcription

1 Morgan Stanley Marcellus-Utica Conference September 19, All rights reserved. Enterprise Products Partners L.P. Randy Fowler EVP & CFO

2 Forward Looking Statements This presentation contains forward-looking statements based on the beliefs of the company, as well as assumptions made by, and information currently available to our management team. When used in this presentation, words such as anticipate, project, expect, plan, seek, goal, estimate, forecast, intend, could, should, will, believe, may, potential and similar expressions and statements regarding our plans and objectives for future operations, are intended to identify forward-looking statements. Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. You should not put undue reliance on any forward-looking statements, which speak only as of their dates. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those expected, including insufficient cash from operations, adverse market conditions, governmental regulations, the possibility that tax or other costs or difficulties related thereto will be greater than expected, the impact of competition and other risk factors discussed in our latest filings with the Securities and Exchange Commission. All forward-looking statements attributable to Enterprise or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained herein, in such filings and in our future periodic reports filed with the Securities and Exchange Commission. Except as required by law, we do not intend to update or revise our forward-looking statements, whether as a result of new information, future events or otherwise. All rights reserved. Enterprise Products Partners L.P. 2

3 Key Investment Considerations Largest publicly traded energy partnership in United States with an enterprise value of approximately $63 billion 62 nd on Fortune th on Fortune Global 500 Integrated midstream energy system serving producers and consumers of natural gas, NGLs, crude oil, petrochemicals and refined products Access to prime natural gas / NGL / crude oil supply basins in the U.S. Pipeline connected to every U.S. ethylene steam cracker (largest consumer of NGLs) and 95% of refining capacity east of the Rockies Diversified businesses and sources of cash flow $7.5 billion of growth projects under construction Investor-friendly structure no GP IDRs lower cost of capital History of financial discipline while executing growth strategy All rights reserved. Enterprise Products Partners L.P. 3

4 Leading Business Positions Across Midstream Energy Value Chain Midstream Energy Services Natural Gas Pipelines Storage Natural Gas Pipelines Ethane NGLs Natural Gas Pipelines Natural Gas Crude Oil Gas Processing Mixed NGLs Pipelines Propane Butane Iso-Butane N Gasoline NGL Fractionation Storage NGL Pipelines NGL Wholesale Trucks Petrochemical Pipelines Barges Crude Oil Pipelines Storage Propylene Splitters Storage Butane Isom Gasoline Additives Barges Refined Products Pipelines Provide services at every link of the value chain Crude Oil Refining All rights reserved. Enterprise Products Partners L.P. 4

5 EPD Portfolio of Integrated Assets Major Asset Overview 50,700 miles of natural gas, NGL, crude oil, refined products and petrochemical pipelines 190 MMBbls of NGL, refined products and crude oil, and 14 Bcf of natural gas storage capacity 25 natural gas processing plants 20 NGL & Propylene fractionators 6 offshore hub platforms NGL import / export terminals Butane isomerization complex; octane enhancement facility; high-purity isobutylene facility All rights reserved. Enterprise Products Partners L.P. 5

6 Continually Evaluating Emerging Shale / Non-Conventional Plays Williston Basin Bakken Appalachian Basin Utica Appalachian Basin Marcellus Jonah Pinedale Uinta Basin Mancos Piceance Basin Mancos San Juan Basin Mancos Permian Basin Bone Spring Avalon & Wolfcamp Anadarko Basin Woodford Fort Worth Basin Barnett Powder River Basin Niobrara Denver Basin Niobrara Anadarko Basin Hz Mississippian Arkoma Basin Woodford Michigan Basin Antrim Arkoma Basin Fayetteville Michigan Basin Utica Illinois Basin New Albany Black Warrior Basin Floyd & Chattanooga Primarily Rich Gas Primarily Dry Gas Delaware Basin Barnett / Woodford South Texas Eagle Ford & Pearsall North Louisiana, East Texas Haynesville & Bossier South Louisiana Tuscaloosa Marine All rights reserved. Enterprise Products Partners L.P. 6

7 Low Gas to Crude Spread Drives U.S. NGL Advantage NYMEX Natural Gas Price as a % of Crude Dollars Per Metric Ton Ethylene 1,400 1,200 1, Ethane Global Indicative Ethylene Cash Costs Ethane Ethane Propane Wtd Avg. U.S. ethane as of 8/28/12 is $0.33/gallon and would have to rise to $0.84/gallon to reach Naphtha cash costs Naphtha Naphtha Naphtha Naphtha Margin Cents Per Pound (10) (20) Indicative U.S. Ethylene Cracker Profit Margin by Feedstock 000 Barrels/Day 1, Middle East 688 Western Canada US US US US NE Asia WEur SE Asia Average ethane demand for July 2012 was 30% above the average U.S. Ethane Demand Ethane demand: average 743 MBPD 966 Ethane Propane Lt. Naphtha 500 Sources: EPD Fundamentals, EIA and CMAI Jul-12 All rights reserved. Enterprise Products Partners L.P. 7

8 All rights reserved. Enterprise Products Partners L.P. Marcellus / Utica

9 Shale Plays: Staying Power and Future Development Potential Play Estimated Acres Remaining Locations Wells per Year Potential Years of Drilling Marcellus 15,000, ,000 1, Utica 13,000,000 50, Eagle Ford 10,000, ,000 2, Mississippian 6,500, , Barnett 4,000,000 30,000 (>19,000 drilled) 1, Haynesville / Bossier 3,500,000 50,000 1, Hydrocarbons from shale rocks are the source for conventional oil and gas We have known about shales and their potential for years but could not extract their oil and gas in economic quantities Horizontal drilling and fracking techniques now enable hydrocarbon recovery from the natural fractures found in shales Source: Enterprise Fundamentals All rights reserved. Enterprise Products Partners L.P. 9

10 Marcellus / Utica Announced Gas Processing Additions 5,000 4,500 4,000 3,500 3,000 MMcf/d 2,500 2,000 1,500 1, Marcellus Utica Sources: Press Releases and EPD Fundamentals All rights reserved. Enterprise Products Partners L.P. 10

11 Enterprise Marcellus / Utica NGL Forecast MBPD Most Likely Case MBPD C2 C3 NC4 IC4 C5+ Total NGL Marcellus assumes 5 GPM gas and 75% of production connected to gas processors in 2014 going to 95% by 2016 Utica assumes 6 GPM gas and 95% of production connected to gas processors in 2014 forward Source: EPD Fundamentals / Supply Appraisal All rights reserved. Enterprise Products Partners L.P. 11

12 NGL Demand and Enterprise Solutions All rights reserved. Enterprise Products Partners L.P.

13 Largest (and Growing) Ethane Market is on the U.S. Gulf Coast Alberta Ethane Market: 200 MBPD (2013) Eastern Canadian Ethane Market: 60 MBPD (2013) BASF, CP Chem, Dow, Exxon, Formosa, Ineos, LyondellBassell, Sasol, Shell, Westlake and Williams have all announced new builds / expansions to increase ethane consumption on the USGC by 500 MBPD ( ) U.S. Gulf Coast Ethane Market: Today: 1.1 MMBPD New build / expansions: 500 MBPD Estimated creep: 120 MBPD Estimated 2017: 1.7 MMBPD All rights reserved. Enterprise Products Partners L.P. 13

14 Appalachia to Texas (ATEX) Express P/L Transport Ethane from Marcellus / Utica Shale Volumes MBPD 100 Proposed Ethane Header P/L 550-mile pipeline system Proposed in-service date: 2Q Contracted Option 1,230-mile pipeline with initial capacity up to 190 MBPD Will include 369 miles of new 20 pipe from PA to IN Reverse existing EPD 16 pipe from IN to Beaumont Build 55 miles of new 16 pipe from Beaumont to Mont Belvieu Access to every ethylene plant in the U.S. Shippers executed take-or-pay TSAs with 15-year terms Expected in-service: 1Q 2014 All rights reserved. Enterprise Products Partners L.P. 14

15 Enterprise NGL Pipeline Connectivity Enterprise has connectivity to all U.S. Gulf Coast petrochemical plants, which reflect 95% of U.S. petrochemical capacity All rights reserved. Enterprise Products Partners L.P. 15

16 Enterprise TE Pipeline is Ideally Located for Forecasted Marcellus & Utica Propane 160 Estimated Marcellus / Utica Propane Production MBPD Source: EPD Fundamentals / Supply Appraisal Enterprise TE transports propane into New York and Pennsylvania Even after the ATEX Ethane pipeline, Enterprise TE will continue to make Northeast propane deliveries All rights reserved. Enterprise Products Partners L.P. 16

17 Additional Possibilities for Handling Marcellus / Utica NGLs EPD has a proven track record of repurposing existing assets to efficiently satisfy industry needs, such as ATEX and Seaway. EPD has additional pipelines with potential for alternate service as the market may dictate. All rights reserved. Enterprise Products Partners L.P. 17