IHS LATIN AMERICA LPG SEMINAR

Transcription

1 ENTERPRISE PRODUCTS PARTNERS L.P. IHS LATIN AMERICA LPG SEMINAR November 8, 2016 Joseph Fasullo Manager, International NGLs ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. enterpriseproducts.com

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, scheduled, 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 PRODUCTS OVERVIEW One of the largest integrated midstream energy companies Integrated system enables EPD to reduce impact of cyclical commodity swings Large supply aggregator and access to domestic and international markets provides market optionality to producers and consumers History of successful execution of growth projects and M&A $36 billion of organic growth projects and $26 billion of major acquisitions since IPO in 1998 $5.6 billion of capital growth projects under construction Actively pursuing and developing new projects In 9M 2016 our 50,000 mile pipeline system transported: 12.1 Billion cubic feet per day of natural gas 5.2 Million barrels per day of liquids 439 Thousand barrels per day of NGLs to Marine Terminals ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 3

4 EPD: NATURAL GAS, NGLS, CRUDE OIL, PETROCHEMICALS AND REFINED PRODUCTS Asset Overview Pipelines: 49,000 miles of natural gas, NGL, crude oil, petrochemicals and refined products pipelines Storage: 250 MMBbls of NGL, petrochemical, refined products, and crude oil, and 14 Bcf of natural gas storage capacity Processing: 26 natural gas processing plants; 22 fractionators; 10 condensate distillation facilities Export Facilities: ethane, LPG, PGP, crude oil and refined products Connectivity Fully integrated midstream energy company aggregating domestic supply directly connected to domestic and international demand 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 ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 4

5 SUPPLY RELIABILITY OF MULTIPLE BASINS ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 5

6 POTENTIAL TAKEAWAY PROJECTS FOR NORTHEAST NGLS Centennial Pipeline Repurposing ATEX Expansion ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 6

7 THE SUPPLY TREADMILL : 1/3 OF GLOBAL OIL PRODUCTION MUST BE REPLACED BY 2020 Oil and Gas Industry Needs to Replace Declines and Satisfy Demand Growth MMBPD of Oil Declines of Existing Fields Annual Demand Growth Annual Additions to Supply Cumulative Additions to Supply Industry needs to replace 5 6% decline rates in existing fields in addition to meeting new demand Supply: average annual decline of 5% on 95 MMBPD of production is 5 MMBPD of brown field decline Demand: just 1.5% annual demand growth requires another ~1.2 MMBPD of new production Note: the decline rate for shale is much steeper, especially in the early periods Billions of CapEx dollars are dedicated yearly to expanding and maintaining existing fields; lesser amounts are dedicated to new fields and exploratory drilling (riskier, longer lead time investments) Sources: EPD Fundamentals, IEA, EIA and Various Company Announcements ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 7

8 Jan-10 Jul-10 Jan-11 THE SHALE REVOLUTION Rapidly Growing Production and Falling Prices Jul-11 Jan-12 Jan-03 Jul-12 Jan-04 Jan-13 Jul-13 Jan-05 Jan-14 Jan-06 Jul-14 Jan-15 Jan-07 Jul-15 Jan-08 Jan-16 Jan-09 Jan-10 Jan-09 Jan-11 Jul-09 Jan-10 Jan-12 Jul-10 Jan-11 Jan-13 Jul-11 Jan-14 Jan-12 Jul-12 Jan-15 Jan-13 Jul-13 Jan-16 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Bcf/d NYMEX Natural Gas Price vs. Shale Production Natural Gas Price Shale Gas $/MMBtu $16.0 $14.0 $12.0 $10.0 $8.0 $6.0 $4.0 $2.0 $0.0 MBPD 2,000 1,800 1,600 1,400 1,200 1, Ethane Prices vs. Production Capacity Ethane Without Rejection Net of Rejection Ethane Price $/Gal $1.0 $0.9 $0.8 $0.7 $0.6 $0.5 $0.4 $0.3 $0.2 $0.1 $0.0 MBPD 14,000 13,000 12,000 11,000 10,000 9,000 8,000 7,000 6,000 5,000 4,000 WTI vs. Liquids Hydrocarbon Production WTI Price Liquids Production $/Bbl $120 $100 $80 $60 $40 $20 $0 Sources: NYMEX and EPD Fundamentals ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 8

9 $/Bbl $70 $60 $50 $40 U.S. OFFERS WORLD CLASS RESOURCES AT COMPETITIVE PRICES Crude Breakeven Price Production Increases Production Stable $30 $20 $10 $0 Source: EPD Fundamentals Estimate Note: Assumes gas price of $2.75/MMBtu. Assumes 20% BFIT ROI Average High-grade ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 9

10 U.S. HAS PLENTIFUL NATURAL GAS BELOW $3.50 $/MMBtu $5 Natural Gas Breakeven Price Production Increases $4 $3 Production Stable $2 $1 $0 $0 Source: EPD Fundamental s Estimate Note: Assumes oil price of $45/Bbl,. Assumes 20% BFIT ROI Average High-grade ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 10

11 MMBPD OIL PRODUCTION FORECAST 11 U.S. Oil & Condensate Forecast October $60+ $50-$55 Current Forward Strip Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 6 Source: EPD Fundamentals ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 11

12 MMBPD NGL PRODUCTION FORECAST 5.5 U.S. Available NGL Supply Forecast October $60+ $50-$55 Current Forward Strip Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan Source: EPD Fundamentals ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 12

13 $/mt Bcf/d NG as % WTI U.S. Cents Per Pound LOW GAS TO CRUDE SPREAD DRIVES GLOBAL NGL CRACKING ADVANTAGE NYMEX Natural Gas Price as a % of Crude Shale Gas Production Now Totals 50% of Total Gas Production Shale Gas Production 140% 120% 100% 80% 60% 40% 20% 0% U.S. Ethane Crackers: Global Cost Advantage Far East / Asia Naphtha NWE Naphtha U.S. Propane U.S. Ethane 120% 110% International Propane as % of Naphtha Asia C3 % of Naphtha NWE C3 % of Naphtha Ethylene less Propylene US NWE Asia 100% % 0 80% 70% 60% Sources: EPD Fundamentals, NYMEX, EIA and CMAI ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 13

14 U.S. LPG BALANCES WILL BE DRIVEN BY EXPORTS MBPD 3,000 Supply Range 2,500 2,000 Exports will fill the gap 1,500 1, LPG Demand Current LPG Exports Source: EPD Fundamentals Note: LPG is Propane and Butane ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 14

15 N G L S LPG EXPORT FACILITY Largest LPG Export Terminal in the World Refrigerated Low Ethane Propane (LE C3) HD5 Propane (C3) Isobutane (IC4) Normal Butane (NC4) LPG Mix Butane Mix PGP HOUSTON SHIP CHANNEL EHSC CROSS CHANNEL CONNECTIONS MONT BELVIEU Ship Docks Barge Docks Berth B D Draft LOA x x 300 Beam DWT 128, , , , , , ,000 20,000 20,000 Max Loading Rate LPG: 30 MBPH PGP: 3 MBPH Crude: 15 MBPH Products: 15 MBPH LPG: 30 MBPH Crude: 15 MBPH Products: 15 MBPH LPG: 30 MBPH Crude: 15 MBPH Products: 15 MBPH LPG: 30 MBPH Crude & Products: 5 MBPH Crude & Products: 5 MBPH ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 15

16 ENTERPRISE ETHANE EXPORT FACILITY Largest of Its Kind HOUSTON SHIP CHANNEL MORGAN S POINT New ethane export facility with a combined operating rate of 200 MBPD across two docks 18 miles of 24 pipeline MTBV to Morgan s Point 90% of capacity is under long-term contracts with ramp through 2018 ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 16

17 MMbls U.S. THE LARGEST EXPORTER OF LPG LPG Exports by Destination Through 3Q EPD LPG Exports by Destination Region: MMBbls % of Cargos Loaded EPD% of Destination Market North America 21% 40% South America 13% 33% Europe/Africa 15% 9% Far East 51% 14% Other 0% 0% North America & Caribbean 60.4 MMBbls 24.1 MMBbls (40%) EPD South America & Central America 43.5 MMBbls 14.5 MMBbls (33%) EPD Europe & Africa MMBbls 16.3 MMBbls (9%) EPD Top LPG Exporters in 2013, 2014, 2015 and 9M2016 Far East MMBbls 57.3 MMBbls (14%) EPD EPD YTD Source: Waterborne - USA Qatar Algeria UAE Saudi Norway Iran Kuwait ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 17

18 EPD: LINKING ABUNDANT U.S. SUPPLIES TO GLOBAL DEMAND HSC Mont Belvieu Beaumont West Beaumont East ECHO Morgan s Point Texas City Docks Pipeline Corridors NGLs Refined Products Crude Oil Corpus Christi Freeport / Jones Creek Product Ship Barge Under Docks Docks Construction Beaumont West Multi Beaumont East Refined Houston Ship Channel Multi Morgan's Point Ethane, Crude Texas City Processed Condensate, Crude Freeport / Jones Creek Crude Corpus Christi Crude Source: EPD Fundamentals ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P. 18