Power, International & Energy Services J. Richard Bird Executive Vice President, Chief Financial Officer & Corporate Development
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 identified by words such as anticipate, expect, project, estimate, forecast, plan, intend, target, believe and similar words suggesting future outcomes or statements regarding an outlook. Although we believe that our FLI is reasonable based on the information available today and processes used to prepare it, such statements are not guarantees of future performance and you are cautioned against placing undue reliance on FLI. By its nature, FLI involves a variety of assumptions, risks, uncertainties and other factors which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied in our FLI. Material assumptions include assumptions about: the expected supply and demand for crude oil, natural gas and natural gas liquids; prices of crude oil, natural gas and natural gas liquids; expected exchange rates; inflation; interest rates; the availability and price of labour and pipeline construction materials; operational reliability; anticipated in-service dates and weather. Our FLI is subject to risks and uncertainties pertaining to operating performance, regulatory parameters, weather, economic conditions, exchange rates, interest rates and commodity prices, including but not limited to those discussed more extensively in our filings with Canadian and US securities regulators. The impact of any one risk, uncertainty or factor on any particular FLI is not determinable with certainty as these are interdependent and our future course of action depends on management s assessment of all information available at the relevant time. Except to the extent required by law, we assume no obligation to publicly update or revise any FLI, whether as a result of new information, future events or otherwise. All FLI in this presentation is expressly qualified in its entirety by these cautionary statements. This presentation will make reference to certain financial measures, such as adjusted net income, which are not recognized under GAAP. Reconciliations to the most closely related GAAP measures are included in the earnings release and also in the Management Discussion and Analysis posted to the website. 2
New Growth Platform Leadership Team Executive VP, CFO, & Corporate Development J. Richard Bird VP Green Power & Transmission Don Thompson Senior VP Energy Marketing & International Leigh Cruess VP Alternative & Emerging Technology Chuck Szmurlo VP International Lino Luison 3
North American Power Market Fundamentals TWH 6, North American Power Demand ~1% Annual Growth 5, 4, 3, 2, 1, 213 215 217 219 221 223 225 227 229 Nuclear Hydro Fuel Oil Coal Gas Renewables Source: Wood Mackenzie 213 Modest long term power demand growth Gas-fired and renewable sources dominate 21-22 supply growth investment of ~$5 billion $1 billion of 21-22 transmission investment required 4
Power Generation Focus and Objectives Largest Canadian solar power producer, second largest wind power producer Focus Areas Renewables and gas-fired are in scope Measured pace of development CDN U.S. Solar 1 MW 5 MW Wind 1,32 MW 25 MW Geothermal - 23 MW Waste Heat 3 MW - Power Generation Capacity MW 3, 2, 1, 213 217 5
Power Transmission Focus and Objectives Montana-Alberta Tie Line (MATL) is in-service Focus Areas Enbridge/Nextera/Borealis consortium selected for Ontario East-West project Focus is on MATL expansion, Ontario and Alberta MW 1 Transmission Capacity Measured pace of development 5 213 217 6
BCF/d TCF Mboe/d bn boe Quadrillion Btu Mbbl/d MMbbl International Fundamentals Source: EIA Asian Demand Growth 45 4 35 3 25 2 15 1 5 215 22 225 23 235 24 OECD Asia Other Non-OECD Asia India China 1,6 1,4 1,2 1, 8 6 4 2 Colombia Crude Oil Market Balance 212 213 214 215 216 217 218 Production (Mbbl/d) Net exports (Mbbl/d) Source: Business Monitor International 3,5 3, 2,5 2, 1,5 1, 5 Consumption (Mbbl/d) Reserves (MMbbl) RHS Australia Natural Gas Market Balance 14 6 12 5 1 4 8 6 3 4 2 2 1 212 213 214 215 216 217 218 Production (BCF/d) Consumption (BCF/d) Net exports (BCF/d) Reserves (TCF) RHS Source: Business Monitor International Peru Hydrocarbon Market Balance 6 3.5 5 3. 4 2.5 3 2. 1.5 2 1. 1.5. 212 213 214 215 216 217 218 Production (Mboe/d Consumption (Mboe/d) Net exports (Mboe/d) Reserves (bn boe) RHS Source: Business Monitor International 7
International Focus Measured pace of development Colombia Oleoducto al Pacífico Peru Australia Primary focus is greenfield development Cenit (Ecopetrol subsidiary) joined OAP as a funding partner Colombia 8
Energy Services Fundamentals Pricing as at September 25, 213 (USD per barrel) Asia WCS Alberta Light $18 $72 $89 Condensate: Edmonton: $99 Mt. Belvieu: $88 Conway: $85 Bakken Light $96 $112 * Brent WTI $13 WTS: $11 US Sour: $99 Light Crude $96 Maya $15 LLS Heavy Crude *Brent price is a landed price on US East Coast/ US Gulf Coast. Assumed tanker freight cost of US$2. per bbl. 9
Energy Services Business Strategies Storage Transportation Buy- February $1. / bbl Simultaneously Buy & Sell WCS Sell March $11.15 / bbl Edmonton Enbridge Mainline Chicago STORAGE TANK Buy: DOM @ Cushing, AB ($1.) Storage Fee and TVM ($.65) Sell: DOM @ Cushing, OK $11.15 Storage Margin $.5 Spearhead Cushing Buy: WCS @ Edmonton, AB ($82.) Tariff and TVM ($6.) Sell: WCS @ Cushing, OK $9. Transportation Margin $2. Refinery Supply Simultaneously Buy & Sell Bakken Condensate Transportation Rail from Chicago to Edmonton Enbridge N.D. Pipeline Refinery Minnesota Edmonton, Alberta Chicago Transport by pipe to Chicago North Dakota Field Location Buy: Bakken @ North Dakota ($83.) Truck fees, Tariff & TVM ($5.) Conway, Kansas Buy: CON @ Mt. Belvieu, TX ($91.) Sell: CON @ Edmonton, AB $93. Sell: Bakken @ Clearbrook, MN $9. Refinery Supply Margin $2. Mont Belvieu, Texas (net of Tariff, Terminal Fees, Rail & TVM) Transportation Margin $2. 1
$ millions Energy Services Focus and Objectives Continued replacement and expansion of current strategies Low risk arbitrage Producer and refiner services Extension of business model Rail niche markets Geographic expansion Long-term transactions 15 125 1 75 5 25 Earnings Contribution 27 28 29 21 211 212 213 217 11
New Growth Platforms Summary Well positioned to provide modest near term growth, base for increased longer term growth and diversification Near Term Growth Longer Term Potential Growth / Diversification Power Generation Power Transmission International Energy Services 12
Power, International & Energy Services