Post on 28-Jun-2020
Partnering Between the Rail and Pipeline Industry
Terry Doherty Director of Rail Strategy North American Crude Market and Storage Summit Houston TX June 29-July 1, 2015
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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.
Risks and Forward-Looking Statements
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Genesis Business Segments
Marine Transportation
Supply & Logistics Refinery Services
Genesis Energy is a diversified midstream energy MLP focused on offering high quality, safe, and efficient crude oil transportation services
Transportation & supply of crude oil and CO2
Ownership in ~770 miles of inland pipelines
Sulfur removal services located at refineries
Production of sodium hydrosulfide for delivery to Mining and Pulp and Paper
Terminals in US, Canada, S.A
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
Onshore Pipeline Transportation
Offshore Pipeline Transportation
Own interests in Crude Oil pipelines and infrastructure located in the Gulf of Mexico
~1200 miles of offshore pipelines serving gulf production
Inland marine fleet of 62 barges
Offshore fleet of 9 boats/9 barges
Acquisition of 330 MBBL Aframax ship !
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Genesis Entered The Crude by Rail Market in 2012
Lower Capital than Building a Pipeline
Less Environmental & Regulatory Risk
Short Construction Time
Supply Optionality for Refineries
Product Integrity
Right Barrel to the Right Market
With growing North American crude oil production and pipeline limitations, Genesis is taking advantage of the CBR opportunity
Genesis Focus: The Right Crude to the Right Market
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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
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
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Genesis Always Has Competitive Rail Access in Mind
Brutal winter impact on cycles and fleet sizing Compounded by record grain crops and RRs
operating with tight resources We had to compete for RR assets against the
lobbying efforts of other business segments.
Drop in crude oil prices reduced production Tank cars were forced into storage in record
volumes and at very high storage pricing
Crude oil prices will improve Major Canadian production surge in 2016-2019 Pipeline takeaway capacity will remain tight New tank car regs may impact fleet sizing
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Do we have the right number of tank cars?
Not$enough$cars$in$2013/2014$$
Too$many$cars$in$2015$
Beyond$2015$???$
The New DOT 117 tank car New!Feature! Descrip/on!of!New!Built!DOT!117!Going!Forward!Capacity! 286,000!lb!capable!car!!
Wall!Thickness! 9/16!inch!steel!vs!current!CPC!1232!cars!of!7/16!inches!
Thermal!Protec/on! Thermal!Protec/on!protect!cars!from!fire!for!a!/me!during!a!derailment!
Jacke/ng! New!weather!/ght!steel/!material!to!add!a!further!layer!of!protec/on!
Head!Shield! Full!½!inch!thick!steel!head!shield!vs!current!½!in!head!shield!on!CPC!1232!cars!
BoRom!Outlet!Design! Design/removal!of!boRom!outlet!valve!prevents!breaking!during!a!derailment!
Braking!System! New!Advanced!Braking!System!for!cars!
Top!FiTngs! Improved!top!fiTng!protec/on!from!rollovers!
Poten=al$Impact$on$all$of$us$
!!!!!
Summary!of!what!the!new!regula/ons!suggest!!
The!new!DOT!117!tank!car!and!retrofit!schedules!for!current!fleet! More!accurate!classifica/on!of!unrefined!petroleum!based!products!! Rail!rou/ng!risk!assessments! Rail!rou/ng!no/fica/on!process!improvements! Reduced!opera/ng!speeds!determined!by!various!criteria!
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!Industry!Reac/on!! API,!RRs!and!other!organiza/ons!are!pushing!back!including!lawsuits!!
Proposed!braking!systems!are!unproven!as!beneficial!! Sugges/ng!a!longer!retrofit!/me!frame!for!DOT!111/CPC!1232!cars!needed!! Loosening!of!opera/onal!restric/ons!on!the!railways!
For!those!of!us!who!have!not!paid!aRen/on!to!their!leases!and!have!DOT!111/!CPC!1232!cars!lease!costs!increase!upon!retrofit!under!a!“mandated!regula/on!clause”.!We!es/mate!a!500!car!fleet!with!retrofit!cost!of!$90,000!per!car!that!your!annual!lease!costs!increase!to!be!~$9!million!per!year.!Can!you!afford!that???!!
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Wink
Natchez Walnut Hill Scenic Station
Pronghorn
Key
Operating
Under Construction
Raceland
Genesis Crude by Rail Terminals
Scenic Station Natchez Raceland Walnut Hill Pronghorn Wink
Status • Operating • Operating • Under
Construction • Q1 2015 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
Niobrara
USGC Market
Permian
!!
Phase 1 :Scenic Station Rail Terminal and Port Hudson Barge /Truck Terminal
XOM Baton Rouge Refinery (506 kbd)
Port Hudson Truck Station
Baton Rouge Terminal ~1.1 Million Barrels of Stg
LA
XOM Anchorage Tank Farm
KCS
CN
Port Hudson Marine Terminal
Placid Refinery (60 kbpd)
Port of Greater Baton Rouge Aframax Class Ships/Barges
Scenic Station Unit Train Facility
Phase 2
Baton Rouge: Creating a World Class Logistics Hub
Phase 1
Accepted first unit train June 27, 2014
Unit Train unload rate less than 15 hours
Competitive rail access: CN and CP/KCS
Double loop with unloading of 140 kbpd
Scenic Station has ~440 kbbl of stg
Port Hudson has ~416 kbbl of storage
New 18 mi, 24” pipeline connecting Port Hudson to Scenic and Anchorage
KCS
Scenic Station Unit Train Unloading Rack
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Enclosed facility with 20 unload spots expandable to 40 or 80 unload spots
Current trains unloading on average at 12-14 hours per train
~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 Q3 2015
Baton Rouge: Creating a World Class Logistics Hub
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Phase 2: Construction of new Crude Oil import/export terminal
Port!of!Baton!Rouge!
Raceland, LA Rail Terminal (Under Construction)
Designed to handle 2 UTs per day
Unloading capacity of ~140 kbbl/day
2 Parallel 118-car tracks
3-135 kbbl tanks and 1-110 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
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Rail!Track!Construc/on!
Tank!Construc/on!Near!Comple/on!
The Raceland Advantage
$$$$$$$$$$$$$!
$$$$$$$$$$$$! $$$$$$$$$$$$$$$$$$$$!
$$$$$$$$$$$$$!$$$$$$$$$$$To$Bakken$Producers$ Direct!BN!route!from!North!Dakota! Car!cycle!and!fleet!size!improvement!! Single!line!rail!pricing!improvement!! Access!to!+2!Mill!BBLS!of!refining!cap! Op/on!if!eastern!US!markets!shrink!!!!!!!!!
$$$$$$$$$$$$$$$$$$$$$$$$$$$To$Canadian$Producers$ Refinery!appe/te!for!Canada’s!heavy!oil!!! BN,!UP,!CN!and!CP!compe//ve!op/ons! Canadian!produc/on!surge!is!coming! Access!to!+2!Mill!BBLS!of!refining!cap! A!Neat!Bitumen!op/on!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
$$$$$$$$$$$$$$$$$To$Refineries$$ BN,!UP,!CN!and!CP!access!to!mul/ple!
crude!grades!and!producers! Desirable!Crude!Oil!pipeline!delivery!
system! A!neat!Bitumen!op/on!
$$$$$$$$$$
$$$$$$$$$$$To$Niobrara$Producers$$
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!
Houma
Clovelly
St. James
Houston to Clovelly/St. James 22”
Clovelly to N
orco 24”
Raceland
Houma to Clovelly 24”
Raceland Connectivity to Lower Mississippi Refineries
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~730 kbpd
~405 kbpd ~565 kbpd
Unit Train terminal commenced operations December 2013
Located in the Powder River Basin Shale Play
3 x 110 kbbl tanks
Double loop track capable of handling 2-120 car trains per day
Located in Converse County and served by BNSF and UP
Capable of receiving crude via Genesis pipelines and trucks
Map
Pronghorn
Existing GEL Pipelines
To West Coast
To East Coast
Pronghorn Wyoming Rail Terminal (Operating)
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Pronghorn Crude by Rail Terminal
Unit!Train!Departure!
New!Tank!Construc/on!
Unit!Train!Departure!Unit!Train!Departure!!
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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
2 -100 kbbl tanks connected to Genesis Jay Pipeline system
Walnut Hill Rail Facility
MS AL
FL
Ten Mile
PAA Pipeline
Pascagoula Mobile, Al
Walnut Hill Off-load
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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
Located on Mississippi River providing access to local refineries via barge
Located on Natchez Railway which is a short-line connected to CN
Facility operational as of January 2013 with the following amount of storage:
• 1-100 kbbl Tank
• 2-50 kbbl Tanks
• 5-30 kbbl Tanks
Natchez Rail Terminal (Operating)
Natchez
Jackson
Brookhaven
MS LA
CN
Gulf Coast Refineries
From Memphis
NTZR
Mis
siss
ippi
Riv
er
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Natchez Unloading Racks
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):
1-100 kbbl tank 1-50 kbbl tank
Target markets are the West Coast and USGC refineries
Wink Rail Terminal (Operating)
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!Genesis Marine: Compliments Our Existing Operations
$$$$$$$$$Genesis$Barge$Opera=ons$ Brown!water!barge!fleet!!consists!of!26!boats!!
and!62!inland!barges!!(30h38,000!BBL!Capacity)!!!
Blue!water!barge!fleet!!consists!of!9!boats!and!9!coastwise!barges!(65h135,000!!BBLs!capacity)!
New!builds!planned!for!2015!and!2016!$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$Latest$Aframax$Acquisi=on$
In!2014,!Genesis!acquired!the!M/T!American!Phoenix!from!Mid!Ocean!Tanker!Company!for!approximately!$157!million!
Modern,!doublehhulled,!Jones!Act!qualified!tanker!with!330,000!barrels!of!cargo!capacity!
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Genesis: Positioned to Maximize on CBR Opportunities
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The safe handling of Crude By Rail is our number 1 priority
Terminal design focus is on having dual rail access and pipeline delivery
Five fully operational terminals now with Raceland complete Q4 2015
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 !