Midstream-to-Downstream - MPLX · 2017-01-27 · About MPLX Growth-oriented, diversified MLP with...

19
Midstream-to-Downstream James Crews, VP Business Development MarkWest Energy Partners January 26, 2017

Transcript of Midstream-to-Downstream - MPLX · 2017-01-27 · About MPLX Growth-oriented, diversified MLP with...

Page 1: Midstream-to-Downstream - MPLX · 2017-01-27 · About MPLX Growth-oriented, diversified MLP with high-quality, strategically located assets with leading midstream position Two primary

Midstream-to-Downstream

James Crews, VP Business Development

MarkWest Energy Partners

January 26, 2017

Page 2: Midstream-to-Downstream - MPLX · 2017-01-27 · About MPLX Growth-oriented, diversified MLP with high-quality, strategically located assets with leading midstream position Two primary

Forward-Looking Statements

This presentation contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP (“MPLX”). These forward-looking

statements relate to, among other things, expectations, estimates and projections concerning the business and operations of MPLX. You can identify forward-

looking statements by words such as “anticipate,” “believe,” “design,” “estimate,” “expect,” “forecast,” “goal,” "guidance," “imply,” “intend,” “objective,”

“opportunity,” “outlook,” "plan,“ “position,” “pursue,” “prospective,” “predict,” “project,” "potential," “seek,” “strategy,” “target,” “could,” “may,” “should,” “would,”

“will” or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future

performance and are subject to risks, uncertainties and other factors, some of which are beyond the companies’ control and are difficult to predict. Factors that

could cause MPLX's actual results to differ materially from those implied in the forward-looking statements include: negative capital market conditions, including

a persistence or increase of the current yield on common units, which is higher than historical yields, adversely affecting MPLX’s ability to meet its distribution

growth guidance; risk that the synergies from the acquisition of MarkWest Energy Partners, L.P. (“MarkWest”) by MPLX may not be fully realized or may take

longer to realize than expected; disruption from the MPLX/MarkWest merger making it more difficult to maintain relationships with customers, employees or

suppliers; risks relating to any unforeseen liabilities of MarkWest; adverse changes in laws including with respect to tax and regulatory matters; the adequacy of

MPLX's capital resources and liquidity, including, but not limited to, availability of sufficient cash flow to pay distributions, and the ability to successfully execute

its business plans and growth strategy; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other

hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and

timing of projects; completion of midstream infrastructure by competitors; disruptions due to equipment interruption or failure, including electrical shortages and

power grid failures; the suspension, reduction or termination of MPC's obligations under MPLX's commercial agreements; modifications to earnings and

distribution growth objectives; the level of support from MPC, including dropdowns, alternative financing arrangements, taking equity units, and other methods of

sponsor support, as a result of the capital allocation needs of the enterprise as a whole and its ability to provide support on commercially reasonable terms;

compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations and/or enforcement actions initiated

thereunder; changes to MPLX's capital budget; other risk factors inherent to MPLX’s industry; and the factors set forth under the heading "Risk Factors" in

MPLX's Annual Report on Form 10-K for the year ended Dec. 31, 2015, and Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, filed with the

Securities and Exchange Commission (SEC). In addition, the forward-looking statements included herein could be affected by general domestic and

international economic and political conditions. Unpredictable or unknown factors not discussed here or in MPLX's Form 10-K or Form 10-Q. Copies of MPLX's

Form 10-K and Form 10-Q are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office.

2

Page 3: Midstream-to-Downstream - MPLX · 2017-01-27 · About MPLX Growth-oriented, diversified MLP with high-quality, strategically located assets with leading midstream position Two primary

About MPLX

Growth-oriented, diversified MLP with high-quality,

strategically located assets with leading midstream

position

Two primary businesses

– Logistics & Storage includes transportation and storage

of crude oil, refined products and other hydrocarbon-based

products

– Gathering & Processing includes gathering, processing,

and transportation of natural gas and the gathering,

transportation, fractionation, storage and marketing of NGLs

Investment grade credit profile with strong financial

flexibility

MPC as sponsor has interests aligned with MPLX

– MPLX assets are integral to MPC

– Growing stable cash flows through continued investment in

midstream infrastructure

– Expected dropdowns of ~$1.4B of MLP-qualifying EBITDA

3

As of September 30, 2016

See appendix for legend

Page 4: Midstream-to-Downstream - MPLX · 2017-01-27 · About MPLX Growth-oriented, diversified MLP with high-quality, strategically located assets with leading midstream position Two primary

Gathering & Processing

4

Segment Overview

One of the largest NGL and natural gas midstream service providers

– Gathering capacity of 5.5 Bcf/d

• 50% Marcellus/Utica; 50% Southwest

– Processing capacity of 7.6 Bcf/d*

• ~70% Marcellus/Utica; ~20% Southwest

– C2 + Fractionation capacity of 500 MBPD**

• ~90% Marcellus/Utica

Primarily fee-based business with highly diverse customer base and established

long-term contracts

Raw

Natural Gas

Production

Processing

Plants Mixed

NGLs

Fractionation

Facilities NGL

Products

• Ethane • Propane • Normal Butane • Isobutane • Natural Gasoline

Gathering

and

Compression

*Includes processing capacity of non-operated joint venture **Includes condensate stabilization capacity

Page 5: Midstream-to-Downstream - MPLX · 2017-01-27 · About MPLX Growth-oriented, diversified MLP with high-quality, strategically located assets with leading midstream position Two primary

Gathering & Processing MarkWest’s Footprint in the Tri-State Region

WEST VIRGINIA

PENNSYLVANIA

OHIO

KEYSTONE COMPLEX

HARMON CREEK COMPLEX (currently under construction)

MAJORSVILLE COMPLEX

MOBLEY COMPLEX SHERWOOD COMPLEX

CADIZ & SENECA COMPLEXES MarkWest Joint Venture with EMG

HOPEDALE FRACTIONATION COMPLEX

HOUSTON COMPLEX

OHIO CONDENSATE MarkWest Joint Venture with Summit Midstream

Utica Complex

ATEX Express Pipeline

Purity Ethane Pipeline

NGL Pipeline

Mariner East Pipeline

Marcellus Complex

Gathering System

Mariner West Pipeline

TEPPCO Product Pipeline

MarkWest Joint Venture with EMG

5

Page 6: Midstream-to-Downstream - MPLX · 2017-01-27 · About MPLX Growth-oriented, diversified MLP with high-quality, strategically located assets with leading midstream position Two primary

Gathering & Processing Segment Growth

6

MarkWest’s Completed and Projected Facilities in the Tri-State Region

2009-2012 2013 2014 2015-2016

Houston I

Houston II

Majorsville I

Houston III

Majorsville II

Houston C3+

Fractionation

Bluestone I &

Sarsen*

Mobley I

Sherwood I

Mobley II

Sherwood II

Majorsville III

Cadiz I

Majorsville V

Mobley III

Sherwood III

Seneca I

Houston C2

Fractionation

Majorsville C2

Fractionation

Majorsville IV

Bluestone II

Seneca II & III

Keystone C2+

Fractionation

Sherwood IV

Cadiz C2

Fractionation

Sherwood V

Mobley IV

Cadiz II

Hopedale C3+

Fractionation I & II

Utica Condensate

Hopedale C3+

Fractionation III

Majorsville VII

Sherwood VII

Cadiz IV

Harmon Creek I

Harmon Creek C2

Fractionation

Keystone C2

Fractionation

Seneca IV

Sherwood VI

Houston IV

Cadiz III

Bluestone III

Mobley C2

Fractionation

Sherwood C2

Fractionation

Majorsville VI

Mobley V

Keystone C3+

Fractionation

2017-2018

Sherwood VIII

Majorsville C2

Fractionation II

Utica

Facility

Marcellus

Facility

Co

mp

lete

d F

acil

itie

s

Pro

jecte

d F

acil

itie

s

*Acquired Facilities

Page 7: Midstream-to-Downstream - MPLX · 2017-01-27 · About MPLX Growth-oriented, diversified MLP with high-quality, strategically located assets with leading midstream position Two primary

0.0

1.0

2.0

3.0

4.0

1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16

Marcellus & Utica

Gas Processed

~4.3Bcf/d Marcellus Operations

Utica Operations

Marcellus & Utica Operations

7

Volume Growth Driven by Diverse Set of Producer Customers

MarkWest supports over 20 producer customers and has

~8 million acres of area dedication in the tri-state region

Page 8: Midstream-to-Downstream - MPLX · 2017-01-27 · About MPLX Growth-oriented, diversified MLP with high-quality, strategically located assets with leading midstream position Two primary

Hopedale Complex

Hopedale Complex

8

Page 9: Midstream-to-Downstream - MPLX · 2017-01-27 · About MPLX Growth-oriented, diversified MLP with high-quality, strategically located assets with leading midstream position Two primary

Keystone Complex

9

Page 10: Midstream-to-Downstream - MPLX · 2017-01-27 · About MPLX Growth-oriented, diversified MLP with high-quality, strategically located assets with leading midstream position Two primary

Sherwood Complex

10

Page 11: Midstream-to-Downstream - MPLX · 2017-01-27 · About MPLX Growth-oriented, diversified MLP with high-quality, strategically located assets with leading midstream position Two primary

Majorsville Complex

11

Page 12: Midstream-to-Downstream - MPLX · 2017-01-27 · About MPLX Growth-oriented, diversified MLP with high-quality, strategically located assets with leading midstream position Two primary

Gathering & Processing

12

Significant Growth Requires a Highly Skilled Team

~850 employees supporting

MarkWest operations in the

Marcellus, Utica, and Southern

Appalachia areas

Source employees from varied

backgrounds including:

– Engineering

– Operations

– Trades

– Other Industries (steel and coal)

Focus on local education initiatives

and on-the-job training

Marcellus Operations

Utica Operations

Southern Appalachia Operations

Engineering/Corporate

G&P Employees in Northeast Region

Page 13: Midstream-to-Downstream - MPLX · 2017-01-27 · About MPLX Growth-oriented, diversified MLP with high-quality, strategically located assets with leading midstream position Two primary

Marcellus/Utica Shale Strategy

Shawn Lyon, VP, Operations

Marathon Pipe Line LLC

January 26, 2017

Page 14: Midstream-to-Downstream - MPLX · 2017-01-27 · About MPLX Growth-oriented, diversified MLP with high-quality, strategically located assets with leading midstream position Two primary

Utica Infrastructure Investments

Assets in service

– Canton and Catlettsburg condensate splitters

– Canton condensate truck unload rack

– Wellsville condensate truck-to-barge terminal

– Truck fleet

– River barges

– Gathering, processing & fractionation infrastructure

– Cornerstone pipeline and Hopedale connection

– East Sparta tank farm expansion

– Cadiz condensate truck unload rack

14

Assets in progress

– Utica build-out pipeline projects

– RIO reversal expansion

– Cochin pipeline connection

– Additional gathering, processing & fractionation infrastructure

– Expansion of additional NGL transportation logistics

Significant potential additional Utica/Marcellus investments

Page 15: Midstream-to-Downstream - MPLX · 2017-01-27 · About MPLX Growth-oriented, diversified MLP with high-quality, strategically located assets with leading midstream position Two primary

Industry solution, 16-inch pipeline connecting

Utica Shale region to East Sparta, Ohio, tank farm

180,000 bpd condensate & natural gasoline

pipeline

In service October 2016

Optimal connectivity to condensate stabilizers and

fractionators

– MarkWest stabilizer – Cadiz

– UEO fractionator/stabilizer – Scio

– MarkWest fractionator – Hopedale

– Midwest Terminals truck unload – Cadiz

Additional potential future connections

15

Cornerstone Pipeline – Connecting Utica Production

Supply Summary

Page 16: Midstream-to-Downstream - MPLX · 2017-01-27 · About MPLX Growth-oriented, diversified MLP with high-quality, strategically located assets with leading midstream position Two primary

Utica Build-Out Projects – Delivering Utica Production

16

Demand Summary

Expand existing pipelines to Harpster

Construct a new pipeline from

Harpster to Lima

Connect to the Maumee 22” pipeline

at Lima

Reverse the RIO 8” pipeline

Up to 50,000 bpd of capacity for

Utica volumes to Lima

Mid-2017 planned in-service

Provides diluent pipeline options

– Southern Lights and Cochin

Provides for future larger build-out

projects

Page 17: Midstream-to-Downstream - MPLX · 2017-01-27 · About MPLX Growth-oriented, diversified MLP with high-quality, strategically located assets with leading midstream position Two primary

Utica Build-Out Projects – Delivering Utica Production

17

Progress

2016 work completed

– RIO pipeline reversal

– Heath to Findlay mainline expansion

– Station construction

2017 work planned

– East Sparta to Heath expansion

– Heath tank farm expansion

– Harpster to Lima pipeline construction

– Lima Maumee connection

– RIO reversal expansion

– Diluent tank construction at Robinson

– Cochin connection

Page 18: Midstream-to-Downstream - MPLX · 2017-01-27 · About MPLX Growth-oriented, diversified MLP with high-quality, strategically located assets with leading midstream position Two primary

Cornerstone Pipeline and Utica Build-Out Projects

18

The Utica Pipeline Solution

First Utica shale liquids pipeline

Provides optionality to multiple markets, maximizing producer netbacks

Provides flexibility of commitment terms and seasonal shipper needs

Allows MPLX to complete projects in phases as Utica production grows

Maintains the option for future expansion volume and connectivity

Adds superior safety, reliability and economics to existing alternatives

Page 19: Midstream-to-Downstream - MPLX · 2017-01-27 · About MPLX Growth-oriented, diversified MLP with high-quality, strategically located assets with leading midstream position Two primary

19