NASEO WINTER ENERGY OUTLOOK

Transcription

1 ENTERPRISE PRODUCTS PARTNERS L.P. NASEO WINTER ENERGY OUTLOOK October, 2014 Mike Smith Group Sr. Vice President ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com

2 DISCLAIMER 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 ENTERPRISE ASSETS: NATURAL GAS, NGLS, CRUDE OIL AND PETROCHEMICALS Asset Overview Pipelines: 52,000 miles of natural gas, NGL, crude oil, refined products and petrochemical pipelines Storage: 200 MMBbls of NGL, refined products, petrochemical and crude oil, and 14 Bcf of natural gas storage capacity Processing: 24 natural gas processing plants; 22 fractionators Exports: added refined products export terminal; expanding World Scale LPG export facilities and adding ethane exports 2016 Connectivity Connected to U.S. major shale basins Connected to every U.S. ethylene cracker Connected to 90% of refineries East of Rockies Pipeline connected to 22 Gulf Coast PGP customers Connected to the First and Last Mile for supplies and markets through extensive marine and trucking fleets ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 3

4 MIXED NGL (Y GRADE) PROJECTS Front Range JV: 1/3 each EPD, Anadarko and DCP 435 miles of 16 pipe; DJ basin to Skellytown; connections to Texas Express and MAPL Capacity: 150 MBPD, expandable to 230 MBPD 10 year ship-or-pay contracts In-service: February 2014 MAPL Rocky Mountain Expansion 265 miles of 16 pipeline and pump modifications 10 year ship-or-pay contracts Capacity from 275 MBPD to 350 MBPD 75 MBPD committed beginning January 1, 2014 In-service: January 2014 Texas Express JV: 35% EPD, 35% Enbridge / Midcoast, 20% Anadarko and 10% DCP 580 miles of 20 pipe; Skellytown to Mont Belvieu Capacity: 280 MBPD, expandable to 400 MBPD 10 year ship-or-pay contracts In-service: November 2013 ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 4

5 MONT BELVIEU: FRACS VII AND VIII Built 5 Fracs, adding 425 MBbls of capacity in the last 5 years Frac IV Frac V Frac VI Frac VII Frac VIII ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 5

6 NGLS U.S. DEMAND MATRIX NGL Ethane Propane Normal Butane Iso-Butane Natural Gasoline Percent of NGL BBL 40% 30% 8% 10% 12% Petrochemicals Heating, Crop Drying Motor Fuels Export Source: EPD Fundamentals ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 6

7 EPD LPG EXPORT FACILITY PREMIER LPG EXPORT FACILITY IN THE U.S. 14,000 bph currently, using two dedicated pipes (16 and 10 ) from Mont Belvieu (>7.5 MMBbls/month) 2,500 bph planned expansion in 1Q 2015 ( 1.5 MMBbls/month) 11,000 bph planned expansion in 4Q 2015 ( 7.0 MMBbls/month) New 30 pipeline from Mont Belvieu Maximum capacity 26 ships / month ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 7

8 US PROPANE PRODUCTION UP 50% SINCE 2011 AND +100 MBBLS/D YOY Source: EIA ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 8

9 U.S. LPG A GROWING SURPLUS MBPD 3,000 1,250 MBPD Excess 2,500 2,000 1,500 1, LPG Demand Current LPG Exports Growing Surplus LPG Supply Source: EPD Fundamentals Note: LPG is Propane and Butane ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 9

10 2013 REVIEW / 2014 UPDATE ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com

11 MAJOR U.S. PROPANE PIPELINES Rockies Conway: 18.4 cpg Rockies MTBV: 15.9 cpg Incremental to Conway: 2.5 cpg Tariff to MTBV: 9.8 cpg Hobbs Hobbs Conway: 5.8 cpg Hobbs MTBV: 4.7 cpg Incremental to Conway: 1.7 cpg ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 11

12 IN 2013, PROPANE STOCKS WERE STRONG (BUT IT WASN T IN THE MID-CONTINENT) The Mid-Continent did not build inventories to normal levels throughout 2013, thus making it vulnerable to strong 4Q 2013 draws (crop drying / winter)...whereas Gulf Coast propane inventories were elevated until the start of winter. Source: EIA ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 12

13 Jan-12 PRICING DISLOCATION IN JANUARY 2014 AND RAPID INDUSTRY RESPONSE Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 Market Responses Truck and Rail Imports to Northeast, mostly Waterborne Lower Exports Incremental Pipeline Batches to Northeast Petrochemicals Move from Propane to Butane CNWAY MTBV $2.00 $1.50 $1.00 $0.50 $0.00 For almost 2 years, pricing favored moving propane to the US Gulf Coast ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 13

14 WHAT DOES 2014 LOOK LIKE? KEY INDICATORS U.S. Propane Inventories Conway and Mont Belvieu Pricing Regional Propane Inventories Pipeline Throughput ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 14

15 US: LIKELY TO END SEP. AT MULTI-YEAR HIGHS AFTER BEGINNING 2014 AT MULTI-YEAR LOWS ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 15

16 cpg 2014 PRICING FAVORS CONWAY STORAGE Conway / Mont Belvieu Differential Positive value indicates Conway pricing premium Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 16

17 PADD 2 STOCKS HAVE RECOVERED RAPIDLY, AND ARE MUCH HEALTHIER THAN IN 2013 ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 17

18 PADD 3 STOCKS TO END SEASON AT HIGHEST LEVELS IN OVER 10 YEARS ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 18

19 MAPL NORTHERN PROPANE SYSTEM MAPL Northern ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 19

20 Average Barrels Per Day MAPL NORTHERN PROPANE SYSTEM 140, , ,000 80,000 60,000 40, ,000 - Note: Shaded area is range Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec April through September, shippers have transported approximately 3.4 million additional barrels (145 million gallons) into the Midwest than during the same period in 2013 ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 20

21 DIXIE PIPELINE SYSTEM Dixie ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 21

22 PADD 3 STOCKS TO END SEASON AT HIGHEST LEVELS IN OVER 10 YEARS ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 22

23 Average Barrels Per Day DIXIE PROPANE SYSTEM 140, , ,000 80,000 60,000 40,000 20,000 0 Dixie Pipeline (Propane Throughput) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Apex Cold Storage full (18.9 million gallons) Hattiesburg Note: Pipeline capacity from Hattiesburg approximately 162,000 bpd ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 23

24 TE PRODUCTS BATCHED PIPELINE SYSTEM TE Products ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 24

25 TE PRODUCTS BATCHED PIPELINE SYSTEM ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 25

26 TE PRODUCTS BATCHED PIPELINE SYSTEM Mainline is 890 mile 20 pipeline (Gulf Coast to Indiana) Northeast System (primarily propane): Indiana to New York, Pennsylvania (approximately 1.7 million barrels of linefill) to Indiana Batched system with approximate 10 day cycles Propane, Isobutane, Normal Butane, Natural Gasoline, Diluent, Premium Unleaded, Regular Unleaded, Diesel Propane averages 21% of total mainline capacity ( ) Propane utilization in 2012 was down 36% from 2009 ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 26

27 TE PRODUCTS PIPELINE CAN SOURCE PROPANE FROM U.S. GULF COAST AND MARCELLUS U.S. Gulf Coast inventories at record high levels in 2014 Propane is available to be shipped in the pipeline when prices favor Northeast Inventories near high levels for available storage Todhunter out of service and Harford Mills brine pond repairs NE excessing propane during summer of 2014 ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 27

28 Average Barrels Per Day TE PRODUCTS NORTHEAST SYSTEM 120,000 TE Products NE System (Propane Throughput) 100,000 Propane deliveries to Marcus Hook NE Injectors from Marcellus / Utica fractionators 80,000 60, , Majority of throughput is NE origin and delivery Less than 1,000 barrels per day of U.S. Gulf Coast receipts (May Sep) in ,000 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Gulf Coast injections forecasted for October ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 28

29 KEY TAKEAWAYS Nearly every indicator shows that the propane industry is better prepared in 2014 Pricing has been supportive of Conway inventories Inventories are up in PADD 2 Shipper utilization of propane pipelines has increased (where needed) Increased propane production in Marcellus / Utica continues to reduce propane transportation from the U.S. Gulf Coast ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 29

30 THANK YOU ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com