Risks and Forward-Looking Statements

Transcription

1 Terry Doherty Director Crude Oil Strategy and Commercial Development Crude & Hazardous Liquids By Rail Safety 2015 Conference Houston, TX August 2015!!

2 Risks and Forward-Looking Statements This presentation may include forward looking statements within the meaning of Section 21A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934 as amended. Except for the historical information contained herein, the matters discussed in this presentation include forward looking statements. These forward looking statements are based on the Partnership s current assumptions, expectations and projections about future events, and historical performance is not necessarily indicative of future performance. Although Genesis believes that the assumptions underlying these statements are reasonable, investors are cautioned that such forward-looking statements are inherently uncertain and necessarily involve risks that may affect Genesis business prospects and performance, causing actual results to differ materially from those discussed during this presentation. Genesis actual current and future results may be impacted by factors beyond its control. Important risk factors that could cause actual results to differ materially from Genesis expectations are discussed in Genesis most recently filed reports with the Securities and Exchange Commission. Genesis undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information or future events. This presentation may include non-gaap financial measures. Please refer to the presentations of the most directly comparable GAAP financial measures and the reconciliations of non-gaap financial measures to GAAP financial measures included in the end of this presentation. 2

3 Genesis Business Segments Genesis Energy is a diversified midstream energy MLP focused on offering high quality, safe, and efficient crude oil transportation services Supply & Logistics! Crude oil terminals with ~2.9 mmbbl storage along with ~.9 mmbbl for refined products! Truck fleet of ~285 trucks! Rail logistic services including 500 Coil Insulated tank cars Refinery Services! Sulfur removal services located at refineries! Production of sodium hydrosulfide for delivery to Mining and Pulp and Paper! Terminals in US, Canada, S.A Offshore Pipeline Transportation! Own interests in Crude Oil pipelines and infrastructure located in the Gulf of Mexico! ~1200 miles of offshore pipelines! Recently acquired Enterprise Offshore Pipeline assets Onshore Pipeline Transportation! Transportation & supply of crude oil and CO 2! Ownership in ~770 miles of inland pipelines Marine Transportation! Inland marine fleet of 62 barges! Offshore fleet of 9 boats/9 barges! Acquisition of 330 MBBL Aframax ship! 3

4 Genesis Focus: The Right Crude to the Right Market " Genesis is well positioned to serve the US Gulf Coast refineries " Terminals are built to handle light, medium and heavy crudes " Ready for the Neat Bitumen challenge " Prepared for Crude Oil exports " Focus on pipeline delivery to refinery " Multiple Class 1 RR access is a must " Suite of services includes barge, pipelines, trucks and terminals 4

5 Genesis Always Has Competitive Rail Access in Mind " Dual served Class 1 rail terminals will always have an advantage " Rail price competition can make or break some deals " Rail competition offers the option to use the best performing Railroad " Competitive access offers service disruption alternatives " Multiple carrier access improves supply and market optionality " Competition always gives your business a higher priority 5

6 Canadian&and&US&Crude&Oil&Forecasts&from&February&2015&

7 Canadian Production Increase Slows But Is Not Stopping! Source:(CAPP(June(2015(Forecast( # To!minimize!rail!either!Keystone!XL!or!Energy!East!must!move!forward.!Both!have!major! obstacles!to!overcome!and!a!lengthy!?meline!if!ever!approved.! # To!slow!down!rail!volume!TransMountain!Express!and!Northern!Gateway!need!to!move! forward.!possibly!1!but!not!both!!!!!

8 US Refineries operating at record Levels # Current!produc?on!levels!exceeding!all!previous!levels!since!EIA!started!publishing!data!in!1990! # Low!Crude!Oil!prices,!high!global!demand!has!led!to!improved!refinery!margins,!encouraged! investment!and!high!refinery!runs! # Refineries!con?nue!to!maximize!rail!whenever!feasible!! # EIA!es?mates!US!Crude!Oil!produc?on!to!be!9.5!Mill!BPD!in!2015!declining!to!9.3!Mill!BPD!in!2016!

9 Issues&affec=ng&con=nued&success&of&Crude&by&Rail& " RRs attempt to protect their franchise thru pricing. Forces pipeline or Pipeline to rail consideration. " Reduction of highly visible derailments a must thru regulation and capital " Opening up of California to a rail option will be a boon to CBR but when!! " Softening of the US export rules will open a significant new CBR market " Governments must support CBR " Entire supply chain needs to be the safest possible

10 Determining the right number of cars is challenging Not&enough&cars&in&2013/2014&& " Brutal winter impact on cycles and fleet sizing " Compounded by record grain crops " RRs operating with tight resources " Competing for RR assets against the lobbying efforts of other business segments. Too&many&cars&in&2015& " Drop in crude oil prices reduced production " Tank cars were forced into storage in record volumes and at very high storage pricing Beyond&2015&???& " Crude oil prices will improve " Major Canadian production surge in " Pipeline takeaway capacity will remain tight " New tank car regs may impact fleet sizing 10

11 The New DOT 117 tank car New!Feature! Capacity! Wall!Thickness! Thermal!Protec?on! Jacke?ng! Head!Shield! Boaom!Outlet!Design! Braking!System! Top!Fibngs! Descrip?on!of!New!Built!DOT!117!Going!Forward! 286,000!lb!capable!car!! 9/16!inch!steel!vs!current!CPC!1232!cars!of!7/16!inches! Thermal!Protec?on!protect!cars!from!fire!for!a!?me!during!a!derailment! New!weather!?ght!steel/!material!to!add!a!further!layer!of!protec?on! Full!½!inch!thick!steel!head!shield!vs!current!½!in!head!shield!on!CPC!1232!cars! Design/removal!of!boaom!outlet!valve!prevents!breaking!during!a!derailment! New!Advanced!Braking!System!for!cars! Improved!top!fibng!protec?on!from!rollovers!

12 Industry&Reac=on&to&New&Regula=ons&!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! " API,&RRs&and&other&organiza=ons&are&pushing&back&on&several&changes&&! Proposed!ECP!braking!systems!are!unproven!as!beneficial!!! Sugges?ng!a!longer!retrofit!?me!frame!for!DOT!111/CPC!1232!cars!is!needed!!! Loosening!of!opera?onal!restric?ons!on!the!railways! " Pay&aPen=on&to&your&leases&and&avoid&the&surprises:&! Monthly!lease!costs!can!increase!significantly!based!on!the! mandated!regula?on! clause!in!most!leases.!a!500!car!fleet!with!retrofit!cost!of!$90,000!per!car!will!!by!~$9! million!per!year.!can!you!afford!that???!!! Significant!penal?es!for!excess!empty!miles!beyond!lease!limits.!Cars!are!travelling! longer!distances!and!faster!making!this!a!huge!expense!! When!markets!are!bad!Crude!Oil!Marketers!move!empty!cars!without!a!previous!load! to!create!an!opportunity.!rrs!do!not!move!emp?es!for!free!so!do!not!exceed!your! 106%!limit!on!empty!moves.!

13 Genesis Crude by Rail Terminals Pronghorn Niobrara Key Operating Under Construction Permian Wink Natchez Scenic Station Walnut Hill Raceland USGC Market Scenic Station Natchez Raceland Walnut Hill Pronghorn Wink Status Operating Operating Under Construction Q start up Operating Operating Operating Railroad Access CP via KCS CN CN via NTZR BNSF UP BN/CN/CSX/NS/KCS via AGR UP via Class 1/AGR UP BNSF UP via TNMR Delivery Points XOM Anchorage Tank Farm GEL Port of BR Terminal Barge Loading on the Mississippi Genesis Pipeline XOM Pipeline Genesis Jay Pipeline system to Mobile, AL Western / Gulf Coast / East Coast Refineries via Rail West Coast / Gulf Coast Refineries via Rail 13

14 Baton Rouge: Creating a World ( Class Logistics Hub Phase 1 :Scenic Station Rail Terminal and Port Hudson Barge /Truck Terminal LA Port Hudson Truck Station Port Hudson Marine Terminal! Accepted first unit train June 27, 2014! Unit Train unload rate less than 15 hours! Competitive rail access: CN and CP/KCS KCS Scenic Station Unit Train Facility Phase 1! Double loop with unloading of 140 kbpd CN KCS! Scenic Station has ~440 kbbl of stg XOM Anchorage Tank Farm XOM Baton Rouge Refinery (506 kbd)! Port Hudson has ~416 kbbl of storage! New 18 mi, 24 pipeline connecting Port Hudson to Scenic and Anchorage Placid Refinery (60 kbpd) Baton Rouge Terminal ~1.1 Million Barrels of Stg Port of Greater Baton Rouge Aframax Class Ships/Barges Phase 2

15 Scenic Station Unit Train Unloading Rack " Enclosed facility with 20 unload spots expandable to 40 or 80 unload spots " Current trains unloading on average at hours per train 15

16 Baton Rouge: Creating a World Class Logistics Hub Phase 2: Construction of new Crude Oil import/export terminal! ~1.1 Million barrels of storage with expansion capability! Pipeline connected to the Port of Baton Rouge, our Scenic Station unit train terminal and Port Hudson! Capable of handling Aframax size ships! Expected start-up Q

17 Raceland, LA Rail Terminal (Under Construction)! Designed to handle 2 UTs per day! Unloading capacity of ~140 kbbl/day Rail!Track!Construc?on!! 2 Parallel 118-car tracks! kbbl tanks and kbbl tank! Terminal is served by BN and UP! Will accept Canadian and US Crudes! Completion expected Q4 2015! Pipeline access to over 2 Million barrels per day of refining capacity 17

18 The Raceland Advantage &&&&&&&&&&&&&( &&&&&&&&&&&To&Bakken&Producers& " Direct!BN!route!from!North!Dakota! " Car!cycle!and!fleet!size!improvement!! " Single!line!rail!pricing!improvement!! " Access!to!+2!Mill!BBLS!of!refining!cap! " Op?on!if!eastern!US!markets!shrink!!!!!!!!( &&&&&&&&&& &&&&&&&&&&&&! &&&&&&&&&&&To&Niobrara&Producers& & " Access!to!a!BN/UP!served!terminals! " Niobrara!displacing!some!Bakken! " Compe??ve!terminal!and!rail!pricing!! " +2!Mill!BBLS!of!refining!capacity! " Op?on!if!Eastern!US!markets!shrink! &&&&&&&& &&&&&&&&&&& &&&&&&&&&&&&&( &&&&&&&&&&To&Canadian&Producers& " Refinery!appe?te!for!Canada s!heavy!oil!!! " BN,!UP,!CN!and!CP!compe??ve!op?ons! " Canadian!produc?on!surge!is!coming! " Access!to!+2!Mill!BBLS!of!refining!cap! "&&&&&&&&&&&&&&&&&&& A!Neat!Bitumen!op?on! & &&&&&&&&&&&&&&&&& &&&&&&&&&&&&&&&&&&&&! &&&&&&&&&&&&&&&&&To&Refineries& & " BN,!UP,!CN!and!CP!access!to!mul?ple! crude!grades!and!producers! " Desirable!Crude!Oil!pipeline!delivery! system! " A!neat!Bitumen!op?on!

19 Raceland Connectivity to Lower Mississippi Refineries ~730 kbpd St. James ~405 kbpd Clovelly to Norco 24 ~565 kbpd Houston to Clovelly/St. James 22 Raceland Houma Houma to Clovelly 24 Clovelly 19

20 Pronghorn Wyoming Rail Terminal (Operating)! Unit Train terminal commenced operations December 2013 Map! Located in the Powder River Basin Shale Play! 3 x 110 kbbl tanks! Double loop track capable of handling car trains per day To West Coast Existing GEL Pipelines Pronghorn To East Coast! Located in Converse County and served by BNSF and UP! Capable of receiving crude via Genesis pipelines and trucks 20

21 Pronghorn Crude by Rail Terminal Unit!Train!Departure! Unit!Train!Departure! Unit!Train!Departure!! New!Tank!Construc?on!

22 Walnut Hill Rail Terminal (Operating)! Genesis operates crude oil unit train terminal at Walnut Hill, FL! Location allows pipeline access to regional refineries in AL and MS along with Mobile s import/export terminal capability! Multiple Class 1 connections via the Alabama Gulf Coast Railway shortline : BNSF, CN, KCS, CSX and NS railroads! Designed to handle 1 train per day with expansion capability! kbbl tanks connected to Genesis Jay Pipeline system MS AL PAA Pipeline Ten Mile Pascagoula Walnut Hill Rail Facility FL Mobile, Al 22

23 Walnut Hill Off-load 23

24 Natchez Rail Terminal (Operating) LA MS From Memphis Jackson! CBR terminal in Natchez, MS handling both unit train and manifest shipments! Designed to handle Railbit and Dilbit and many of the more difficult Crudes to handle! Facilitates the movement of Canadian crudes to high value Gulf Coast markets Mississippi River Natchez NTZR CN Brookhaven! Located on Mississippi River providing access to local refineries via barge! Located on Natchez Railway which is a shortline connected to CN! Facility operational as of January 2013 with the following amount of storage: kbbl Tank Gulf Coast Refineries 2-50 kbbl Tanks 5-30 kbbl Tanks 24

25 Natchez Unloading Racks 25

26 Wink Rail Terminal (Operating)! Commenced operation of CBR terminal in Wink, Texas - March 2014! Located in the Permian Basin and served by the UP-TNMR! Expansion to 140 car capacity unit train capability in 2014! Storage capacity (with expansion capability):! kbbl tank! 1-50 kbbl tank! Target markets are the West Coast and USGC refineries 26

27 ! Genesis Marine: Compliments Our Existing Operations &&&&&&&&&Genesis&Barge&Opera=ons& " Brown!water!barge!fleet!!consists!of!26!boats!! and!62!inland!barges!!(30n38,000!bbl!capacity)!!! " Blue!water!barge!fleet!!consists!of!9!boats!and! 9!coastwise!barges!(65n135,000!!BBLs!capacity)! " New!builds!planned!for!2015!and!2016( &&&&&&&&&&& &&&&&&&&&&& &&&&&&&&&&&&&Latest&Aframax&Acquisi=on& " In!2014,!Genesis!acquired!the!M/T!American! Phoenix!from!Mid!Ocean!Tanker!Company!for! approximately!$157!million! " Modern,!doublenhulled,!Jones!Act!qualified! tanker!with!330,000!barrels!of!cargo!capacity! "!!

28 Genesis: Positioned to Maximize on CBR Opportunities " The safe handling of Crude By Rail is our number 1 priority " Terminal design focused on dual rail access and pipeline delivery " Five operational terminals now with Raceland complete Q " Terminal construction focused on handling US and Canadian crudes " Preparing for the export and neat bitumen challenges " Customer supply chain utilizes our wide range of our assets ( 28