ENTERPRISE PRODUCTS PARTNERS L.P. IHS LATIN …Cumulative Additions to Supply 6.2 12.4 18.6 24.8 31...
Transcript of ENTERPRISE PRODUCTS PARTNERS L.P. IHS LATIN …Cumulative Additions to Supply 6.2 12.4 18.6 24.8 31...
ENTERPRISE PRODUCTS PARTNERS L.P.
enterpriseproducts.com © ALL RIGHTS RESERVED. ENTERPRISE PRODUCTS PARTNERS L.P.
IHS LATIN AMERICA LPG SEMINAR November 8, 2016
Joseph Fasullo Manager, International NGLs
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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.
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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
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EPD: NATURAL GAS, NGLS, CRUDE OIL, PETROCHEMICALS AND REFINED PRODUCTS
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
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
Asset Overview Connectivity
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SUPPLY RELIABILITY OF MULTIPLE BASINS
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POTENTIAL TAKEAWAY PROJECTS FOR NORTHEAST NGLS
Centennial Pipeline Repurposing ATEX Expansion
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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)
MMBPD of Oil 2016 2017 2018 2019 2020
Declines of Existing Fields 5.0 5.0 5.0 5.0 5.0
Annual Demand Growth 1.2 1.2 1.2 1.2 1.2
Annual Additions to Supply 6.2 6.2 6.2 6.2 6.2
Cumulative Additions to Supply 6.2 12.4 18.6 24.8 31
Sources: EPD Fundamentals, IEA, EIA and Various Company Announcements
Oil and Gas Industry Needs to Replace Declines and Satisfy Demand Growth
“THE SUPPLY TREADMILL”: ≈1/3 OF GLOBAL OIL PRODUCTION MUST BE REPLACED BY 2020
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THE SHALE “REVOLUTION” Rapidly Growing Production and Falling Prices
$0.0
$2.0
$4.0
$6.0
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$10.0
$12.0
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$16.0
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$/MMBtu Bcf/d
Shale Gas
$0
$20
$40
$60
$80
$100
$120
4,000
5,000
6,000
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8,000
9,000
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12,000
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14,000
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-09
Jul-0
9
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Jul-1
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1
Jan
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$/Bbl MBPD
WTI Price
Liquids Production
WTI vs. Liquids Hydrocarbon Production
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$1.0
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1,000
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2,000
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$/Gal MBPD
Ethane Without Rejection
Net of Rejection
Ethane Price
Ethane Prices vs. Production Capacity
NYMEX Natural Gas Price vs. Shale Production
Natural Gas Price
Sources: NYMEX and EPD Fundamentals
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Source: EPD Fundamentals Estimate Note: Assumes gas price of $2.75/MMBtu. Assumes 20% BFIT ROI
U.S. OFFERS WORLD CLASS RESOURCES AT COMPETITIVE PRICES
Crude Breakeven Price
Production Stable
Production Increases
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$10
$20
$30
$40
$50
$60
$70$/Bbl
Average High-grade
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Source: EPD Fundamental’s Estimate Note: Assumes oil price of $45/Bbl,. Assumes 20% BFIT ROI
U.S. HAS PLENTIFUL NATURAL GAS BELOW $3.50
Natural Gas Breakeven Price Production Increases
$0 $0
$1
$2
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$/MMBtu
Average High-grade
Production Stable
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MM
BP
D
$60+
$50-$55 Current Forward Strip
OIL PRODUCTION FORECAST
Source: EPD Fundamentals
U.S. Oil & Condensate Forecast October 2016
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NGL PRODUCTION FORECAST
Source: EPD Fundamentals
2.0
2.5
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3.5
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4.5
5.0
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MM
BPD
$60+
$50-$55 Current Forward Strip
U.S. Available NGL Supply Forecast October 2016
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60%
70%
80%
90%
100%
110%
120%International Propane as % of Naphtha
Asia C3 % of Naphtha NWE C3 % of Naphtha
LOW GAS TO CRUDE SPREAD DRIVES GLOBAL NGL CRACKING ADVANTAGE
Sources: EPD Fundamentals, NYMEX, EIA and CMAI
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70U.S. Ethane Crackers: Global Cost Advantage
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nts
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Far East / Asia Naphtha
NWE Naphtha U.S. Propane
U.S. Ethane
Shale Gas Production Now Totals
≈50% of Total Gas Production
NYMEX Natural Gas Price as a % of Crude
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20%
40%
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120%
140%
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NG
as
% W
TI
Bcf
/d
Shale Gas Production
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$/m
t
Ethylene less Propylene
US NWE Asia
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U.S. LPG…BALANCES WILL BE DRIVEN BY EXPORTS
Note: LPG is Propane and Butane Source: EPD Fundamentals
0
500
1,000
1,500
2,000
2,500
3,000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
MBPD
LPG Demand Current LPG Exports
Supply Range
Exports will fill the gap
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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
NG
LS
MONT BELVIEU
EHSC
CROSS CHANNEL CONNECTIONS
HOUSTON SHIP CHANNEL
Ship Docks Barge Docks
Berth 1 4 5 6 7 8 9 B D
Draft 40’ 40’ 45’ 45’ 45’ 45’ 42’ 15’ 15’
LOA 860’ 900’ 950’ 950’ 950’ 950’ 950’ 2 x 300’ 2 x 300’
Beam 160’ 160’ 175’ 175’ 160’ 165’ 140’ 120’ 120’
DWT 128,000 160,000 160,000 160,000 160,000 160,000 130,000 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
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ENTERPRISE ETHANE EXPORT FACILITY Largest of Its Kind
MORGAN’S POINT
HOUSTON SHIP CHANNEL
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
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U.S. THE LARGEST EXPORTER OF LPG LPG Exports by Destination Through 3Q’ 2016
North America & Caribbean 60.4 MMBbls
24.1 MMBbls (40%) EPD
Source: Waterborne
Europe & Africa
184.4 MMBbls 16.3 MMBbls (9%) EPD
Far East 423.2 MMBbls
57.3 MMBbls (14%) EPD
% 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%
2016 EPD LPG Exports by Destination Region: 112.2 MMBbls
South America & Central America
43.5 MMBbls 14.5 MMBbls (33%) EPD
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50
100
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300
USA Qatar Algeria UAE Saudi Norway Iran Kuwait
MM
bls
Top LPG Exporters in 2013, 2014, 2015 and 9M2016
EPD 2013 2014 2015 2016 YTD
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EPD: LINKING ABUNDANT U.S. SUPPLIES TO GLOBAL DEMAND
Corpus Christi
Texas City
Morgan’s Point
HSC
Freeport / Jones Creek
ECHO
Mont Belvieu
Source: EPD Fundamentals
Beaumont West
Beaumont East
ProductShip
Docks
Barge
Docks
Under
Construction
Beaumont West Multi 2 2 2
Beaumont East Refined 1 0 1
Houston Ship Channel Multi 6 2 1
Morgan's Point Ethane, Crude 0 1 2
Texas CityProcessed
Condensate, Crude2 0 0
Freeport / Jones
CreekCrude 2 0 0
Corpus Christi Crude 0 1 1
Refined Products Crude Oil
NGLs
Docks
Pipeline Corridors