Sital K. Mody Chief Commercial Officer Kinder Morgan Midstream A NEW LANDSCAPE August 15, 2017
Forward-Looking Statements This presentation includes forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts. In particular, statements, express or implied, concerning future actions, conditions or events, future operating results or the ability to generate revenues, income or cash flow or to pay dividends are forward-looking statements. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future actions, conditions or events and future results of operations of Kinder Morgan, Inc. may differ materially from those expressed in these forward-looking statements. Many of the factors that will determine these results are beyond Kinder Morgan's ability to control or predict. These statements are necessarily based upon various assumptions involving judgments with respect to the future, including, among others, the timing and extent of changes in the supply of and demand for the products we transport and handle; national, international, regional and local economic, competitive and regulatory conditions and developments; the timing and success of business development efforts; technological developments; condition of capital and credit markets; inflation rates; interest rates; the political and economic stability of oil producing nations; energy markets; weather conditions; environmental conditions; business, regulatory and legal decisions; terrorism, including cyber-attacks; and other uncertainties. There is no assurance that any of the actions, events or results of the forward-looking statements will occur, or if any of them do, what impact they will have on our results of operations or financial condition. Because of these uncertainties, you are cautioned not to put undue reliance on any forward-looking statement. Please read "Risk Factors" and "Information Regarding Forward-Looking Statements" in our most recent Annual Report on Form 10-K and our subsequently filed Exchange Act reports, which are available through the SEC s EDGAR system at www.sec.gov and on our website at www.kindermorgan.com. 2
The Big Picture Dramatic supply growth continues MarcellusÇ, UticaÇ, PermianÇ, Eagle FordÇ.. Unconventional = the new conventional? Gas demand continues growth trajectory US economy : power gen Ç residential / industrial Ç Exports : LNGÇ; MexicoÇ Infrastructure impetus New sources Æ new plumbing Æ supply to market Mexico Energy Reform 3
Current Key Trends Ind +3.1 Bcfd +7.7 Bcfd +9.6 Bcfd Res +1.9 Bcfd U.S. becomes net exporter Industrial demand growth Gas-fired generation increases -2.0 Bcfd +20.1 Bcfd +1.5 Bcfd Less Canadian Exports to U.S. Source: ICF International and Kinder Morgan Analysis Continued supply increases More U.S. Exports to Mexico 4
Natural Gas Supply BCF/d Source: ICF International and Kinder Morgan Analysis 5
Key Natural Gas Basins Well-positioned connecting key natural gas resources with major demand centers (a) Includes KM share of non-wholly owned projects. Includes projects currently under construction. 6
Demand Excluding Exports Source: ICF International and Kinder Morgan Analysis 7
Flow Changes Source: ICF International and Kinder Morgan Analysis 8
Mexico Supply Demand Forecast SENER Forecasts demand in Mexico to grow by 1.3 Bcfd between 2016 and 2026 24 GW of renewable power generation capacity being installed between 2016 and 2030 No natural gas storage in Mexico Production in Mexico is forecasted to grow 460 MMcfd from 2016 to 2026 Imports are forecasted to grow by 850 MMcfd between 2016 and 2026 9
Regional Demand Growth Regional Demand Forecasts Noroeste +440 Noreste Centro- Occidente +380 Demand (mmpcd) 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 +700 Centro Noroeste Noreste Centro-Occidente Centro Sur-Sureste Sur-Sureste -20-230 Source: SENER 10
Mexico Energy Reform CENAGAS formed CENAGAS Operating Gas Pipelines Mexico auctions pipeline capacity New CENACE - Electricity Market Commences 2014 2015 2016 2017 2018 Round 0 Bidding Energy Reform Authorized via change to Mexico s Constitution Round 1 Bidding Oil & Gas Production Open to private investment Petroleum product prices deregulated Market-based gas pricing Electricity More merchant generation. Additional bidding rounds Gas Transmission Shipper direction 11
Open / Competitive Natural Gas Market Law Pipeline Capacity Natural Gas Supply Storage / Balancing Transparent Pricing at Liquid HUBS Need all to have a successful market 12
Kinder Morgan / Mexico Strong History Interconnect 12 Direct 4 Indirect Authorized Export Capacity 16 3.1 BCF/d BCF/d Current supply to Mexico 2.9 667 $Millions Capital Invested since 2013 13
Kinder Morgan Supply Points Export Points Capacity North Baja 500 1 Sierrita 200 Nogales 9 Willmex + Monument 187 El Fresnal 199 Douglas 117 Samalayuca + Cactus Hill A B C D 910 Border 300 Texas/Monterrey 700 Tejas to NET 712 2 TGP Pemex 185 TGP Rio Bravo 320 TGP to NET 513 2 NGPL to NET 500 2 E F G H I J K L M N STRONG CONNECTIVITY A EPNG Sierrita B C D F G E MEXICO H I N M J K L 1 Capacity is based on North Baja pipeline which receives gas from EPNG 2 Capacity based on Tejas, NGPL, and TGP delivery point capacities to NET Mexico NGPL Midstream TGP 14
Kinder Morgan Provides Options 15
More Supply Needed at Agua Dulce Growing Demand ~3 BCF/d Supply Deficit LNG 2.1 Bcf/d Other 1.0 Bcf/d Capacity ~5.4 Bcf/d + Local Supply 1.2 Bcf/d Agua Dulce 2019 Demand 9.6 Bcf/d KM Border / Mier 1.0 Bcf/d NET Mexico 2.1 Bcf/d TGP TETCO 0.5 Bcf/d 0.3 Bcf/d Valley Crossing 2.6 Bcf/d (Oct-18) 16
Gulf Coast Express Pipeline Delaware Basin Midland Basin 1.8 BCF/d KATY MARKETS Adds much needed supply into South Texas LNG EXPORTS 17 17
Why Gulf Coast Express? Value Connectivity Optionality Track record Supply EPNG Waha Mendoza Trails DCP / ATMOS Waha Atmos Enterprise Transwestern ETC Trans-Pecos Oasis Waha Markets KM Tejas Cheniere / Freepoint Power / Katy / Tres Southcross KM Texas Industrial / Power HPL / Howard Webb Valley Crossing TGP / NGPL NET Mexico 18
Kinder Morgan Border Expansion 150,000 Dth/d 19
Mier-Monterrey Expansion 200,000 to 500,000 DTH/d 20
Mier-Monterrey Trading Hub New Hub within Mexico Texas Liquidity Maximization of transport capacity In-Service: July 1, 2018 Future Interconnects Howard, MX GIMSA CMG M1 Meter Station CFE CENAGAS GAS FENOSA Existing Interconnects 21
EPNG Permian Interconnection Activity Status Receipt (Mcfd) Plains 2012 610,000 2013 615,000 2014 492,000 2015 1,566,200 Delaware Basin Carlsbad Hobbs Eunice Central Platform Midland Basin 2016 1,337,200 New Mexico 2017* 3,827,000 Texas Guadalupe Black River Cornudas Gresham Wink Line 3162 Keystone Waha * Includes interconnects currently under construction Puckett 22
EPNG South Mainline Expansion SAN JUAN ANADARKO Phoenix New Compression PERMIAN Ehrenberg 17-mile Pipeline Loop Sierrita Pipeline El Paso Waha Increase west flow capability by 271,000 DTH/d to Sierrita and Ehrenberg by 2020 23
Sierrita Expansion: Year 2020 Expand Sierrita Pipeline capacity by 230,000 Dth/d Ehrenberg Phoenix Incremental volumes to serve growing demand in Western Mexico Tucson Sierrita Pipeline Sonora, Mexico 24
TGP Supply Diversity TGP touches > 42 Bcf/d of diverse shale supply basins ~ 2 Bcf/d of northeast supply flows through Sta. 87 Average flowing supply (2017): 8.6 Bcf/d Utica 4.6 Bcf/d Fayetteville 1.1 Bcf/d Marcellus 19.8 Bcf/d Haynesville 6.7 Bcf/d Barnett 3.4 Bcf/d Eagle Ford 6.4 Bcf/d NET Mexico Reynosa Rio Bravo 25
Kinder Morgan Contacts Kinder Morgan Intrastate (Houston) Larry Bell President Intrastate Pipelines 713.369.8776 larry_bell@kindermorgan.com David Grisko VP Business Development 713.369.9870 david_grisko@kindermorgan.com El Paso Natural Gas / Sierrita (Colorado Springs) Will Brown VP Marketing 719.520.4250 willw_brown@kindermorgan.com Greg Ruben - VP Business Development 719.520.4870 gregory_ruben@kindermorgan.com Tennessee Gas Pipeline (Houston) Ernesto Ochoa Director Marketing 713.420.1734 ernesto_ochoa@kindermorgan.com Preston Troutman- VP Business Development 713.420.3022 preston_troutman@kindermorgan.com 26
Unparalleled Asset Footprint n Largest natural gas network in North America Own or operate ~70,000 miles of natural gas pipeline Connected to every important natural gas resource play in the U.S. n Largest independent transporter of petroleum products in North America Transport ~2.1 MMBbl/d (a) n Largest transporter of CO 2 in North America Transport ~1.3 Bcf/d of CO 2 (a) n Largest independent terminal operator in North America Own or operate ~155 terminals ~152 MMBbls liquids capacity Handle ~53 MMtons of dry bulk products (a) Own 16 Jones Act vessels (including 2 under construction) n Only Oilsands pipeline serving the West Coast Transports ~300 MBbl/d to Vancouver / Washington State; planned expansion takes capacity to 890 MBbl/d (a) 2017 budget. 27