Market Access for Land Locked North American Crude Oil TD London Energy Conference January 14, 2013 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. FLI inherently 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: 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; availability and price of labour and pipeline construction materials; operational reliability; customer project approvals; maintenance of support and regulatory approvals for Enbridge s projects; anticipated in-service dates and weather. Our FLI is subject to risks and uncertainties pertaining to operating performance, regulatory parameters, project approval and support, construction schedules, weather, economic and competitive conditions, exchange rates, interest rates, commodity prices and supply and demand for commodities, 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 may 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 MD&A filings and/or Supplementary Financial Information available on our website or in the slides that accompany this presentation, if applicable. 2
$45 Billion Energy Infrastructure Asset Base Norman Wells Zama Fort McMurray Edmonton Hardisty Quebec City Portland Salt Lake City Clearbrook Superior Casper Chicago Patoka Cushing Toronto Montreal 2011 Adjusted Earnings Toronto 2011 Adjusted Earnings 17% 16% Liquids Pipelines Houston 62% 65% Gas Distribution Fort St. John Edmonton Wind Power Generation Solar Power Generation Waste Heat Recovery Geothermal Power Generation Power Transmission Edmonton Toronto Chicago Sarnia 2011 Adjusted Earnings 19% 2011 Adjusted Earnings 2% Gas Pipelines Houston 17% Renewable Energy 3
Total Shareholder Return CAGR Value Creation Track Record Enbridge Performance Relative to S&P/TSX Composite Index As at December 31, 2012 25% 20% 15% 16% 20% Enbridge Inc. S&P/TSX Composite Index 19% 10% 7% 9% 5% 0% 1 Year 5 Year 10 Year 1% North American Peer Group Percentile 89% 100% 96% 4
Dominant Transporter of Canadian Crude Oil US Imports 2012 1 Western Canada Enbridge Other MMbpd 2.1 Saudi Arabia 1.5 Mexico 1.0 1.3 0.8 Trans Mountain 8% W Corridor 3% Alberta Oilsands Edmonton Hardisty Fort McMurray Express 9% Enbridge transports 63% of U.S. bound Western Canadian production Venezuela 0.8 Iraq 0.5 Columbia 0.4 Nigeria 0.4 Kuwait 0.3 Brazil 0.3 Keystone 17% Chicago ENB ~ 15% Total US Imports Angola 0.3 Others 1.1 Total 8.8 2012 Capacity MMbpd 1 Average Q1/Q2 2012. Source: Enbridge, Energy Information Administration 2 Includes tanker shipments from Canadian east coast production Enbridge 2.50 Keystone 0.59 Trans Mountain 0.30 Express 0.28 West Corridor 0.15 5
USD per bbl Global Light Oil Price Benchmark Outlook Brent Price Outlook (2011 dollars) 2013-2025 $120 $115 $110 PIRA U.S. Domestic Production Growth EIA $105 $100 $95 $90 $85 Developing Country Demand Growth $80 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: EIA Annual Energy Outlook 2013, PIRA Energy Group 6
Western Canada/U.S. Northwest Supply Growth Forecast Western Canada Production MMbpd 6.0 MMbpd 6.0 Forecast Bakken Production 5.0 5.0 4.0 1.5 MMbpd 2.4 MMbpd 4.0 3.0 3.0 2.0 2.0 1.0 1.0 1.0 MMbpd 1.3 MMbpd 0.0 0.0 CAPP Forecast PIRA Energy Group Forecast 7
Landlocked Supply Price Discounts Pricing reflects December 2012 averages (Crude prices are in US$ per bbl) Asia $106 Edm Light $81 WCS $55 $85 Bakken Light Brent $113 * WTI $88 Maya $91 LLS $110 Brent $113 * Light Crude Heavy Crude NOTE: * Brent price is a landed price on US East Coast/ US Gulf Coast. Assumed tanker freight cost of US$2.00 per bbl. 8
Value Lever # 1 Mainline System Oil Sands Edmonton Hardisty Kerrobert Regina Cromer Bakken Gretna Clearbrook Superior Montreal Flanagan Chicago Patoka Sarnia Detroit Toledo Buffalo Largest crude oil pipeline system in the world Value Leverage: Cushing Scale Product Segregation Market Diversity Houston Premium Markets Established ROW 9
Value Lever # 2 Alberta Regional System Suncor (Firebag) Suncor (MacKay River) ConocoPhillips (Surmont) Statoil (Leismer) Athabasca Terminal Imperial Oil (Kearl) Husky (Sunrise) Nexen (Long Lake) Cheecham Terminal Cenovus (Christina Lake) Largest operator in Alberta Value Leverage: Low cost expansion Bridging of new projects Regional expertise Alberta Cold Lake ROW access Edmonton Hardisty Hub Lloydminster Dual delivery hubs Waupisoo Pipeline (up to 580 kbpd) Athabasca Pipeline (up to 600 kbpd) Athabasca Twin Pipeline (initially 450 kbpd) Woodland Pipeline Extension Project Connections Total Secured Capital = $3.4 B 10
Value Lever # 3 Bakken Regional System Saskatchewan Enbridge Mainline System Saskatchewan System (ENF) North Dakota System (EEP) Bakken Expansion Project (EEP/ENF) Largest operator in the Bakken Value Leverage: Sole gathering/collector system in Bakken core Weyburn Access to mainline multiple premium markets Steelman Lignite Cromer Contract and common carrier service Tioga Stanley Minot Gretna Established ROW Berthold North Dakota Clearbrook Total Secured Capital = $0.8 B 11
Value Lever # 4 Existing Mainline Extensions Fort McMurray Edmonton Hardisty Kerrobert Regina Cromer Gretna Clearbrook Superior Montreal Flanagan Chicago Sarnia Detroit Toledo Buffalo Value Leverage: Market Diversity Patoka Established ROW Cushing Mainline Joint Tolls Houston 12
New Market Access Initiative # 1 Western U.S. Gulf Coast Access 4 # 4. Associated Mainline Expansions ($1.2B) Expanding Line 67 from 450 kbpd to 800 kbpd Expanding Line 61 from 400 kbpd to 560 kbpd # 3. Flanagan South Pipeline ($2.8B) Enbridge Inc. 100% Twin Spearhead Pipeline (36-inch pipeline, 591 miles) Initial capacity 585 kbpd, expandable to 800 kbpd In-service mid-2014 3 Chicago/ Flanagan Cushing # 1. Seaway Pipeline Acquisition + Reversal ($1.4B) Enbridge Inc. and Enterprise JV Initial capacity 150 kbpd, up to 400 kbpd by Q1 13 Reversal started May 2012 Connectivity to ECHO Terminal in 2013 (65 miles) 1 2 Houston # 2. Seaway Pipeline Twin + Lateral ($1.0B) Enbridge Inc. and Enterprise JV Twin Seaway Pipeline (515 miles) Initial capacity 450 kbpd, In-service mid-2014 Connectivity to Port Arthur (85 miles) Port Arthur Total Secured Capital = $6.4 B 13
New Market Access Initiative # 2 Eastern Access Hardisty Regina Gretna Clearbrook Montreal Superior 1 Westover 4 4 Sarnia 1 Line 5 Expansion Chicago 3 2 5 Toledo 2 Spearhead North Expansion Patoka 3 Line 6B Replacement 4 Line 9 Reversal 5 Toledo Pipeline Partial Twin Cushing Total Secured Capital = $2.7 B 14
New Market Access Initiative # 3 Light Oil Market Access Hardisty Gretna Clearbrook Montreal Superior 1 2 Canadian Mainline Terminal Capability ($0.6B) Sandpiper Project ($2.5B) Sarnia 3 U.S. Mainline Expansion ($1.8B) a) Superior to Flanagan b) Chicago Area Connectivity Flanagan Patoka Chicago Toledo 4 Eastern Access Upsize ($0.5B) a) Line 6B Expansion b) Line 9 Reversal Expansion 5 Southern Access Extension ($0.8B) Cushing Total Secured Capital = $6.2 B 15 15
Other New Market Access Initiatives Asia Pacific/West Coast Refinery Markets Canadian/U.S. East Coast Refinery Markets Eastern U.S. Gulf Coast Refinery Markets 16 16
$35 Billion Growth Investment Plan 2012 2016 Enterprise Wide Growth Capital Risked Unsecured Highly Probable Unsecured Commercially Secured $35 B $5 B $12 B $35 B $5 B $3 B $18 B $27 B Enbridge Day (Oct 2012) Current 17
An Industry Leading Growth Outlook Highly Probable Unsecured Adjusted EPS* Growth $3.00 Commercially Secured (as at Enbridge Day) Tilted Return Projects 2016 Risked Unsecured New Growth Platforms Sponsored Vehicle Drop Downs $0.00 2011 2016e * Please refer to Non-GAAP Measures disclosure in news release. All figures are based on US GAAP reporting. 18
Investment Merits Summary Exceptional array of attractive return investment opportunities Financial risk tightly managed Ample access to low cost conventional funding sources Sponsored vehicles further augment access to low cost capital, accelerate growth Attractive investments low cost of capital Industry leading growth Substantial Valuation Upside 19