Inter Pipeline New Template (sm) 16 x...
Transcript of Inter Pipeline New Template (sm) 16 x...
1
2
FORWARD-LOOKING INFORMATIONThis Corporate Presentation contains certain forward-looking statements or information (collectively referred to as “forward-looking statements”) within the meaning of applicable securities legislation.
All statements, other than statements of historical fact included in this Corporate Presentation, which address activities, events or developments that Inter Pipeline expects or anticipates to occur in
the future, are forward-looking statements. Forward-looking statements often contain terms such as "may", "will", "should", "anticipate", "expect", “continue”, “estimate”, “believe”, “project”, “forecast”,
“plan”, “intend”, “target”, "outlook", "focus", "could" and similar words suggesting future outcomes or statements regarding an outlook. Forward-looking statements in this Corporate Presentation
include, but are not limited to, statements regarding: 1) Inter Pipeline’s belief that it is well positioned to maintain its current level of dividends to its shareholders; 2) Inter Pipeline being well positioned
to operate and grow in the future including anticipated benefits of acquisitions and growth opportunities associated with acquisitions; 3) financial forecasts or anticipated financial performance; 4)
timing and cost of capital projects, and forward EBITDA (as defined herein) estimates in respect of these projects (including PDH and PP facilities); and 5) capital expenditure forecasts.
Readers are cautioned not to place undue reliance on forward-looking statements, as such statements are not guarantees of future performance. Inter Pipeline in no manner represents that actual
results, levels of activity and achievements will be the same in whole or in part as those set out in the forward-looking statements herein. Such information, although considered reasonable by Inter
Pipeline may later prove to be incorrect and actual results may differ materially from those anticipated in the forward-looking statements. Inter Pipeline applies a variety of factors and assumptions
when making forward-looking statements and making forecasts, projections, predictions or estimations, which include, but are not limited to, Inter Pipeline’s ability to successfully implement its
strategic initiatives and achieve expected benefits; Inter Pipeline’s ability to maintain its investment grade credit ratings; the availability and price of labour, equipment and materials; assumptions
concerning operational reliability; the availability and price of energy commodities; the availability of adequate levels of insurance; and general economic and business conditions.
By their nature, forward-looking statements are subject to various known and unknown risks, uncertainties and other factors, which are beyond Inter Pipeline’s control, including, but not limited to: the
status, credit risk and continued existence of customers having contracts with Inter Pipeline and its affiliates; competitive factors, pricing pressures and supply and demand in the oil and gas
transportation, natural gas liquids (NGL) extraction and storage industries; fluctuations in currency and interest rates; risks of war, hostilities, civil insurrection, instability and terrorist actions, as well
as political and economic conditions, in or affecting countries in which Inter Pipeline and its affiliates operate; public opinion regarding the production, transportation and use of oil and gas; severe
weather and environmental conditions; risks associated with technology; Inter Pipeline’s ability to access external sources of debt and equity capital; the potential delays of, and costs of overruns on,
construction projects in all of Inter Pipeline’s business segments; Inter Pipeline’s ability to make capital investments and the amounts of capital investments; changes in laws and regulations,
including environmental, regulatory and taxation laws, and the interpretation of such changes to Inter Pipeline’s business; the risks associated with existing and potential or threatened future lawsuits
and regulatory actions against Inter Pipeline and its affiliates; increases in maintenance, operating or financing costs; difficulty in obtaining necessary regulatory approvals or land access rights and
maintenance of support of such approvals and rights; the realization of the anticipated benefits of acquisitions; and such other risks and uncertainties described from time to time in Inter Pipeline’s
reports and filings with the Canadian securities authorities. The impact of any one assumption, risk, uncertainty or other factor on a particular forward-looking statement cannot be determined with
certainty, as these are interdependent and Inter Pipeline’s future course of action depends on management’s assessment of all information available at the relevant time.
Readers are cautioned that the foregoing list of assumptions, risks, uncertainties and factors is not exhaustive. See also the section entitled RISK FACTORS of Inter Pipeline’s most recent
Management’s Discussion and Analysis filed on SEDAR at www.sedar.com for further risk factors. The forward-looking statements contained in this Corporate Presentation are made as of the date
of this document and, except to the extent expressly required by applicable securities laws and regulations, Inter Pipeline assumes no obligation to update or revise forward-looking statements made
herein or otherwise, whether as a result of new information, future events, or otherwise. The forward-looking statements contained in this document and all subsequent forward-looking statements,
whether written or oral, attributable to Inter Pipeline or persons acting on Inter Pipeline’s behalf are expressly qualified in their entirety by these cautionary statements.
3
WORLD SCALE ENERGY INFRASTRUCTURE ASSETS
2.3 million b/d of
contracted capacity
Bulk Liquid
Storage
3,900 km pipeline
network in
western Canada
27 million barrels
of storage capacity
in Europe
Oil Sands
Transportation
Conventional
Oil Pipelines
NGL
Processing
Over 240,000 b/d of
production capacity
59% 19% 11% 11%
2016 September YTD EBITDA
4
AREAS OF OPERATION
IRELAND
ENGLANDGERMANY
SWEDEN
DENMARK
2016 September YTD EBITDA
Canada
Europe
89%
11%
5
LOW RISK BUSINESS STRATEGY
DIVERSIFIED
INFRASTRUCTURE ASSETS
• Large-scale and strategically
located
• Capital-efficient growth
opportunities
OPERATIONAL
EXCELLENCE
• Exceptional EH&S
performance and reliability
• Industry leading project
execution
STRONG FINANCIAL
POSITION
• Solid balance sheet
• Excellent access to capital
markets
• BBB+ credit rating
LIMITED COMMODITY
PRICE EXPOSURE
• 91% of EBITDA from cost of
service and fee based
contracts
• Majority investment grade
counterparties
DIVIDEND
STABILITY
14 consecutive
dividend increases
5–year dividend
CAGR ~9%
6
RECENT DEVELOPMENTS
• 14th consecutive dividend increase to
$1.62 per share annually
• Acquired the remaining 15% interest in
Cold Lake for $528 million
• Secured a new long term cost of service
contract for CNR’s Kirby North project
• Acquired a large scale NGL and olefin
extraction, transportation and
fractionation business for $1.35 billion
• Potential PDH and PP facility
development totaling ~$3.15B
759%2016 September YTD
EBITDA
8
OIL SANDS TRANSPORTATION• Three major oil sands
pipeline systems with combined ultimate
capacity
of 4.6 million b/d
Corridor
Cold Lake
Polaris
• Over 3,300 km of pipeline and 3.8 million
barrels of storage
• Long term cost of service agreements
• Substantial available capacity for 3rd
party growth projects
AOSP IMPERIAL KEARL
SUNCOR
AOC
HANGINGSTONE
FCCL CHRISTINA LAKE
CNR KIRBY SOUTH
CNR PRIMROSE
/ WOLF LAKE
BRUDERHEIM
FACILITY
LAMONT TERMINAL
CNR KIRBY NORTH
9
0
200
400
600
800
1,000
1,200
1,400
Current Throughput* Installed Capacity Ultimate Capacity
CORRIDOR PIPELINE CAPACITY
*YTD September 30, 2016; ** subject to existing shipper approval
POTENTIAL
3RD PARTY
CAPACITY**
CONTRACTED
VOLUMES
374465
1,400
935
465
000’s b/d
10
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Original Cold Lake FCCL CNR Kirby North & South Osum Orion Ultimate Capacity
AVAILABLE CAPACITY
COLD LAKE PIPELINE CAPACITY
CONTRACTED VOLUMES
000’s b/d
650
50090 14
1,900
~645
~1,255
2,000
11
0
100
200
300
400
500
600
700
800
FCCL ImperialKearl
HuskySunrise
CNR KirbyNorth & South
SuncorConnection
JACOSHangingstone
AOCHangingstone
UltimateCapacity
POLARIS PIPELINE CAPACITY000’s b/d
350
12030 24 10 7 5
1,300
~755
~545
1,300AVAILABLE CAPACITY
CONTRACTED VOLUMES
12
OVER-BUILD STRATEGY
• Successfully completed expansion of the Cold Lake and Polaris pipeline
systems increasing total available capacity to 2.3 million b/d
Over-build economics supported by existing contracts
Well positioned to accommodate high return “bolt-on” projects
(000’s b/d) Contracted Available Ultimate
Cold Lake 1,255 645 1,900
Corridor 465 935* 1,400
Polaris 545 755 1,300
Total Capacity 2,265 2,335 4,600
*Subject to existing shipper approval
1319%2016 September YTD
EBITDA
14
CONVENTIONAL OIL PIPELINES
• 3,900 km of oil pipelines servicing
over 100 producers
• 100% fee based business,
excluding midstream marketing
• Strong production from Viking
formation
1511%2016 September YTD
EBITDA
16
BULK LIQUID STORAGE• 16 petroleum and petrochemical
storage terminals
• Approximately 27 million barrels
of storage capacity
• Fee based revenue structure
• Average utilization rate
of 98%*
• Successful integration of Vopak
Sweden acquisition
*YTD September 30, 2016
Shannon
Immingham West
Tyne
Riverside
Immingham East
Mannheim NorthMannheim South
Ensted
Asnaes
Gulfhavn
Malmo
Gavle
Sodertalje
Gothenburg
Stigsnaes
IRELAND
ENGLAND GERMANY
SWEDEN
DENMARK
Seal Sands
1711%2016 September YTD
EBITDA
18
NGL PROCESSING
*50% working interest in the Empress V facility
• Large scale NGL infrastructure
Three straddle plants strategically located on
the TransCanada Alberta System
Two offgas extraction facilities with
dedicated supply agreements
Boreal pipeline with low cost expansion up
to 125,000 b/d
NGL and olefin fractionation at Redwater
• Potential PDH and PP facility
development totaling ~$3.15 billion
• Largest ethane producer in Canada
19
WILLIAMS CANADA ACQUISITION SUMMARY
• Inter Pipeline acquired Williams Canada on September 23, 2016 for ~CAD $1.35
billion
• Diversifies and strengthens Inter Pipeline’s existing large scale NGL processing
business
• Provides platform to develop Canada’s first propane dehydrogenation (“PDH”)
facility and expand Inter Pipeline’s NGL value chain
• Underpinned by long term supply and ethane-ethylene sales agreements
• Supports Inter Pipeline’s commitment to responsible environmental stewardship
20
Redwater
Olefinic
Fractionator
OffgasAECO
OffgasAECO
Offgas Extraction
Facilities
Boreal
Pipeline
Marketed Products
1Ethane-
Ethylene Mix
1
• Extraction of NGL and olefins from offgas received directly from Suncor and CNRL Horizon upgraders
• The NGL and olefin mix is transported to the Redwater Olefinic Fractionator via the Boreal pipeline where it
is fractionated
Proposed
PDH Facility
Market Propane
PDH Polymer Grade
Propylene
2• Propane sourced from Redwater Olefinic Fractionator and the local market would be processed at PDH
facility into polymer grade propylene
• Polymer grade propylene to be used as feedstock at the PP facility and processed into polypropylene
OFFGAS PROCESSING, PDH & PP OVERVIEW
Proposed
PP Facility
2
Redwater
Propane
Polypropylene
21
0
5
10
15
20
25
30
2011 2012 2013 2014 2015 2016 Q3YTD
Redwater Olefinic Fractionator sales volume
000’s b/d
OFFGAS VOLUMES AND COMPOSITIONRedwater Olefinic Fractionator
Product Composition*
Ethane-Ethylene 39%
Propane 30%
Polymer Grade Propylene 12%
Normal Butane 7%
Alky Feed 8%
Olefinic Condensate 4%
• The CNRL Horizon located facility in service
since February 2016, adding 15,000 b/d of
production capacity
• Volumes for 2016 Q3 YTD were negatively
impacted by:
• Wildfires in the Fort McMurray region
• Planned Suncor upgrader turnaround
*For the eight day period from September 23 – 30, 2016; composition based on production volumes which may differ from sales volumes
Ethane-Ethylene
Contract In Service
22
PDH AND PP OPPORTUNITY
• Proposed petrochemical complex that will convert
propane into polypropylene
Design capacity to consume ~22,000 b/d of propane to
produce ~525,000 tonnes per year of polypropylene
Polypropylene is a high value, easy to transport plastic
used in the manufacturing of a wide range of finished
products
Awarded $200 million of royalty credits under the Alberta
Government’s Petrochemical Diversification Program
• Approximately $250 million invested to date in the
PDH facility
• FID expected by mid-2017
Targeted in service date of mid-2021
23
INTER PIPELINE IN THE AIH
• As of December 2016 Inter Pipeline had 704 employees in Canada and paid
gross payroll in excess $100,000,000
• In our Sherwood Park office we have 126 FTE and that location is the control
room and operations centre for all of our pipeline operations
• IPL various entities paid ~$6.6 million dollars of property tax in the AIH area
in 2016
• Since 2014 Inter Pipeline has invested $400,000+ in various AIH community
initiatives (Food Banks, APPLE Schools, E4C’s Kids in the Hall Bistro
Program)
2424
CONTACT INFORMATION
SUITE 3200, 215 – 2ND ST SW CALGARY, ALBERTA T2P 1M4
PHONE: 1 866 716 7473
PHONE: (403) 290 6000
FAX: (403) 290 6090
WEB: INTERPIPELINE.COM