Terminals
John Schlosser
President Terminals Group
Terminal Network Largest Independent Terminal Operator in North America
2
Bulk 82 Terminals Liquids 40 Terminals Transload 10 Transload Operations
KM Terminals Segment Facilities
Historical Growth (a)
3
($ in thousands)
__________________________ (a) Before Certain Items (b) Without corporate overhead (c) 2014 Budget excludes acquisition capital of $100 MM (d) 2002-2014 CAGR Note: Does not include impact of APT / SCT acquisition
2011Actual
2012Actual
2013Actual
2014Budget
Earnings before DD&A (excluding APT) 701,042 752,303 797,875 969,095
Revenue (net) $1,298,507 $1,343,294 $1,388,319 $1,626,278 Opex $598,212 $587,713 $576,822 $624,298 EBITDA $700,295 $755,580 $811,497 $1,001,980 Book Income Tax ($747) $3,277 $13,621 $32,885 Earnings Before DD&A $701,042 $752,303 $797,875 $969,095 Sustaining Capital (b) $83,187 101,420 104,654 $136,747 DCF $617,855 $650,883 $693,221 $832,348
Expansion Capital (b,c) $223,173 $579,994 $817,137 $517,694
Operating Margin 53.93% 56.25% 58.45% 61.61%
Growth from prior year (earnings before DD&A) 8.42% 7.31% 6.06% 21.46% Internal 6.05% 5.83% 5.52% 20.30% Acquisition 2.36% 1.49% 0.53% 1.16%
EBDA CAGR (d)
12.53%
Contract Diversification
Top-10 Customers $497MM
Total Revenue (c) $1,626MM
4
Liquids Revenue Breakout (a) Bulk Revenue Breakout (a)
4.1-yr Avg. Contract Life (b) Top-10 Customers (a)
__________________________ (a) 2014 budget (b) 2014 budget weighted average, as of 12/31/2013 (c) No customer greater than 6% of revenue (d) Gasoline & Distillate
Liquids 4.2 Years
Bulk 4.1 Years
(d)
Bulk Tonnage
5
Key Take-aways Export coal volume expected to increase by 22.7%, or 6.24MM tons, due to new expansion projects coming on-line Petcoke volume expected to increase due to a full year of BP Whiting expansion project and increased petcoke handling
at IMT Expected decline in Fertilizer volume due to the divestiture of the Tampaplex ammonia business in December 2013 Expected decline in Other Bulk related to the KMMS CSX lost contract in Q1 2013
Variance ('14 vs '13)
KMBT Tonnage (tons)
Actual 2013
Budget 2014 Amt %
Coal 33,489,763 42,653,512 9,163,748 27.4% Ores/Metals (Bulk & Break-Bulk) 24,611,841 25,957,581 1,345,739 5.5% Petcoke 10,808,429 14,377,923 3,569,494 33.0% Soda Ash 4,585,962 4,678,141 92,180 2.0% Fertilizers 4,507,304 3,564,717 (942,587) -20.9% Salt 3,106,715 3,189,662 82,947 2.7% Aggregate 3,119,228 3,034,400 (84,828) -2.7% Cement (Including Clinker) 592,346 703,044 110,698 18.7% Other Bulk 5,123,472 4,559,055 (564,417) -11.0%
Totals 89,945,060 102,718,034 12,772,975 14.2%
Key Take-aways Increase in expected Petroleum Feedstock volume due to BOSTCO, Edmonton and crude by rail expansions Increase in expected Gasoline volume due to higher margin blending and export opportunities for our customers,
partially offset by a decrease in distillate blending Expected Chemical volume increase due to Galena Park, Harvey expansions, plus a full-year impact of acquisitions
Liquids Throughput
6 __________________________ (a) Crude, black oil and other feedstocks
Variance to Budget
Actual 2013
Budget 2014 Amt %
KMLT Throughput (Bbl)
Gasoline 334,811,713 400,448,520 65,636,807 19.6% Petroleum Feedstocks (a) 46,429,464 219,053,233 172,623,769 371.8% Distillate 134,720,953 117,123,544 (17,597,409) -13.1% Fuel Grade Ethanol / Bio-diesel 64,956,249 65,927,648 971,399 1.5% Chemical 26,051,704 28,654,624 2,602,920 10.0% Vegetable Oils 7,413,838 8,468,052 1,054,214 14.2% Animal Fats 202,764 202,608 (156) -0.1% Other 4,270,602 5,997,677 1,727,075 40.4%
Totals 618,857,287 845,875,904 227,018,617 36.7%
KMLT Utilization Capacity Utilization Rate 94.5% 97.5% Capacity (MMBbl) 68.1 72.4
Major Projects – Backlog
7
* Model assumption may differ from total facility capacity ** Initial Term (years); Combined Total figure is weighted average based on Capital *** C$ / USD exchange rate 1:1 (A) Reflected at KM Ownership Level – 55% (B) Reflected at KM Ownership Level – 50% (C) Reflected at KM Ownership Level – 51% (D) Capital figure reflects remaining capital calls on vessel builds; EBITDA is not pro-rated for capital
Project Name ProductModeled Capacity
(MMBbl) *Capital(MM)
First Full Year EBITDA
ExpectedIn Service
Avg. ContractLength **
Edmonton Tank Expansion Phase I *** Crude 3.4 $308.7 $34.9 Q4/13 - Q1/14 12
Edmonton Tank Expansion Phase II *** Crude 1.2 $111.9 $16.8 Q3/14 - Q4/14 12
North 40 Connection (Edmonton, AB) *** Crude n/a $6.9 $1.8 Q2/14 10
BOSTCO Phase 1 (La Porte, TX) (A) Resid/VGO/Distillates 6.2 $253.1 $20.0 Q4/13 - Q2/14 6
BOSTCO Phase 2 (A) ULSD 0.9 $29.8 $3.9 Q3/14 5
Galena Park Central Plant Rail Additive n/a $10.4 $1.7 Q1/14 5
Greens Port Crude by Rail (KWX JV; Houston, TX) (B) Crude 0.2 $33.5 $6.6 Q3/13 - Q1/14 5
Splitter Project Support Infrastructure Refined Petroluem 0.8 $77.5 $9.3 Q4/13 - Q1/14 12
Houston Export Terminal Blendstock 1.5 $172.0 $22.2 Q1/16 11
Pony Express (Deeprock JV; Cushing, OK) (C) Crude 1.5 $26.3 $3.8 Q3/14 5
Alberta Crude Terminal (Keyera JV; Edmonton, AB) (B) *** Crude 0.1 $32.9 $13.1 Q3/14 5
Geismar (Methanex Project) and Harvey, LA Chemical Tankage Chemical 0.8 $60.9 $9.6 Q4/14 9
Edmonton Rail Terminal (Imperial JV) (B) *** Crude 0.5 $184.0 $50.6 Q4/14 5
State Class Tankers (D) Crude/Products 1.3 $213.5 $66.0 Q4/15 - Q4/16 5
Galena Park Tank Project Refined Products 1.2 $106.2 $13.0 Q3/14 - Q4/15 10Greensport Dock Conversion Refined Products n/a $31.2 $4.4 Q1/16 8
TOTAL 19.6 $1,658.9 $277.9 8
Project Name ProductModeled Capacity
(MM Tons) *Capital(MM)
First Full Year EBITDA
ExpectedIn Service
Avg. ContractLength **
Deepwater Coal Handling (Deer Park, TX) Coal 7.0 $174.0 $24.2 Q3/14 10
IMT Phase 3 (Myrtle Grove, LA) Coal 3.3 $64.7 $9.8 Q2/14 10
Pier IX Yard Expansion (Newport News, VA) Coal 1.0 $29.3 $5.3 Q2/14 10
Sulfur System Upgrades (Vancouver, BC) *** Sulfur 1.3 $6.5 $1.6 Q4/14 5
Grain System Upgrades (Vancouver, BC) *** Grain 0.5 $6.1 $2.2 Q1/14 3Mt. Milligan (Thompson Creek) Copper Gold Mine (Vancouver, BC) *** Copper Ore 0.2 $13.5 $3.4 Q2/14 6
TOTAL 13.2 $294.1 $46.5 10
ONGOING EARLY-STAGE PROJECTS $347.4 $60.5
TOTAL PROJECT BACKLOG $2,300.4 $384.9
Future Identified Projects $250MM - $600MMCrude/NGL's
Refined ProductsMinerals
BU
LK
LIQ
UID
S
Major Projects – Placed In-Service in 2013
8 * Model assumption may differ from total facility capacity ** Initial Term (years); Combined Total figure is weighted average based on Capital (A) Reflected at KM Ownership Level – 67%
Project Name Product
Modeled Capacity(MMBbl) *
Capital(MM)
First Full Year EBITDA In Service
Avg. ContractLength **
Ethanol tank and truck bay (Pasadena, TX) Ethanol 0.1 $7.9 1 4/7 Q1/13 N/A
UAN Handling (Fairless Hills, PA) UAN 0.1 $6.3 3/4 Q3/13 5
TOTAL 0.2 $14.2
Project Name Product
Modeled Capacity
(MM Tons) *Capital(MM)
First Full Year EBITDA In Service
Avg. ContractLength **
Petcoke Handling (Whiting, IN) Petcoke 2.2 $62.8 11 4/9 Q3/13 10
Port of Houston Export Coal (Deer Park, TX) Coal 1.2 $51.5 6 4/9 Q4/13 10
IMT Phase 1 (Myrtle Grove, LA) (A) Coal 4.0 $56.2 8 3/4 Q3/13 15
IMT Phase 2 (A) Coal 3.0 $31.9 4 3/5 Q1/13 10
Fertilizer Domes (Fairless Hills, PA) Fertilizer 0.1 $13.6 1 4/9 Q3/13 4
Shiploader Expansion (Portland, OR) Soda Ash 1.9 $9.5 1 3/7 Q2/13 10
TOTAL 12.4 $225.4
COMBINED TOTAL $239.7 $36.5 10
LIQ
UID
S B
ULK
Crude
Canadian Crude Oil
10
= Increased North American demand for petroleum storage and transport
__________________________ Source: CAPP Crude Oil Forecast, Markets & Transportation, June 2013 Morgan Stanley Crude Oil: Long Term Outlook and Supply Deep Dive November 26, 2013
Western Canadian conventional and oil sands supply is increasing, beyond earlier forecasts Outbound pipeline takeaway capability isn’t keeping pace Regulatory issues playing a major role Canadian crude pricing reflects the logistical disconnect Traditional markets are evolving due to flood of lighter crudes in the U.S. Gulf
Canadian Oil Production Forecast Uncertainty Around Pipeline Development Driving Rail Investment
KM Terminal Response Expansion of Rail Take-away Capacity and Merchant Tankage
11
Future Capacity Increases Edmonton Rail Terminal Expansion Incremental capacity as much as 150 MBbl/d
Alberta Rail Terminal Phase 2 Incremental capacity as much as 110 MBbl/d Possibility of adding a diluent recovery unit
Edmonton Terminal Future Phases on Edmonton tank development
Rail Terminals Edmonton Rail Terminal 50-50 joint venture with Imperial Oil Base scope accommodates 1-3 unit trains per day, or approximately 100
MBbl/d Connected via pipe to KM’s Edmonton South terminal Served by both CN and CP mainlines
KM Capital $184 Million
Alberta Rail Terminal 50-50 joint venture with Keyera Initial phase includes 20 rail car loading spots accommodating approximately
40 MBbl/d Pipeline connectivity to KM’s Edmonton terminal Served by both CN and CP
KM Capital $33 million
Tankage Kinder Morgan’s Edmonton Terminal: Trans Mountain Operational 2.6 MMBbl North 40 Merchant 2.1 MMBbl Edmonton Merchant Phase 1 3.4 MMBbl Under construction – completion Q1-2014
KM Capital= $308.7 MM Edmonton Merchant Phase 2 1.2 MMBbl Under construction – completion Q3-2014
KM Capital = $111.9 MM 9.5 MMBbl (a)
Edmonton Rail Terminal (ERT) __________________________ (a) Total Edmonton Terminal tankage includes a 220K barrel regulated tank built during Phase I Expansion.
U.S. Crude Oil
12
US crude oil production is projected to hit 9.5 MMBbl/d by 2016 according to the EIA, approaching the historical record volume of 9.6 MMBbl/d
Increases (a) driven by: — Permian (projected to hit 2 MMBbl/d in 2020); — Eagle Ford TX, (1.76 MMBbl/d by 2020); — Bakken growth (1.73 MMBbl/d) — And offsetting declining ANS production
__________________________ Source: Turner Mason CCOC Conference Presentation, September 2013 (a) Morgan Stanley Crude Oil: Long Term Outlook and Supply Deep Dive November 26, 2013
U.S. Crude Oil Situation
13
Light crude production will increase out of the Eagle Ford and Permian, and will saturate the Gulf Coast with its predominate medium to heavy refinery base
Heavy Crude volume will find its way to rail and water from Alberta as a bridge to pipeline expansion
Estimated 425K carloads in 2013 The delta between originated and terminated
carloadings will increase as more Canadian crude enters the US market
(a)
__________________________ (a) Turner Mason CCOC Conference Presentation, September 2013
KM Response Expansion of Rail Receipt Capacity and Merchant Tankage
Selected Opportunities KWX - PNW and Northeast Crude Other Ship Channel crude development Northeast Shale gas export facility Acquisition candidates
Tankage and Connectivity Deeprock (Cushing, OK) Tallgrass Energy obtained FERC approval to convert the Pony
Express Pipeline to crude service - Deeprock Development JV is the destination
Project scope increased to nine (six new and three existing) x 250K Bbl tanks and two new pipelines connecting to five Cushing area destinations
Throughput capacity to up to 350 MBbl/d KM JV Terminal – KM Capital $26 million (KM 51%)
Rail Terminals Greens Port (Houston Ship Channel) Crude oil receipt and distribution terminal, Houston Ship Channel
– capable of handling 210 MBbl/d Heavy crude handling capability added in bolt-on project 250 MBbl storage, 105 car handling capability Fully built out by March 2014
Richmond, CA Converted from ethanol to crude oil in September 2013 Currently the only 100-car unit train crude oil facility in California
Pecos, TX Crude and sand facility relocated in 2013 Manifest crude service will grow to unit train scale as Permian rail
demand escalates KWX ND and Canadian JV Terminals Three manifest terminals in Canada; one operating unit train
facility in ND Combination of crude oil and frac sand
KWX JV terminals – KM Capital $35 million (KM 50%)
14
Greens Port Rail Terminal (GPRT)
KM Response APT / SCT Tanker Acquisition
American Petroleum Tankers (“APT”) – 5 existing medium-range Jones Act qualified
product tankers – 49,000 DWT per vessel (approx. 330,000 Bbl) – Average remaining term of approximately 4
years on current/forward charters; approximately 6 years including renewal options
State Class Tankers (“SCT”) – 4 new-build medium-range Jones Act qualified
product tankers (49,430 DWT per vessel) – Delivery between 4Q 2015 and 4Q 2016 – Built at General Dynamics’ NASSCO shipyard
(San Diego, CA) – Upon delivery each vessel will go on time
charter with an initial term of 5 years; 3 x 1-year renewals
Operations Agreement with Crowley Maritime – Maritime transportation company founded in
1892 – Services provided include: technical services,
crewing, security, maintenance & repair, purchasing, insurance, SQE Administration, regulatory reporting, bookkeeping
Alas
kan
Nor
th S
lope
Jones Act Trade Routes
Experienced Leadership Team at KM Rob Kurz – Joined APT in January 2010 (CEO) – Over 30 years of experience in maritime industry Phil Doherty – Joined APT in September 2010 (CFO) – Over 10 years of experience in maritime industry Tim Casey – Joined KM in 2013 – Previously served as President & CEO of K-Sea Transportation – Over 30 years of experience in maritime industry
15
-
100
200
300
400
500
600
700
(MB
bl/d
)
Crude Gasoline Blendstock Finished Gasoline Jet Distillates
KM Response APT / SCT Tanker Acquisition (Cont’d)
16
A number of favorable supply and demand factors are currently impacting the Jones Act trade: — Significant U.S. shipyard capacity constraints and long-lead delivery schedules — Stringent charterer vetting requirements takes supply out of market via vessel retirements — Dislocations in crude supply as a result of increased shale oil production has generated new, high-value trade
routes along West and Gulf coasts — With advantaged crude supply, PADD 3 refiners should continue to run near (or above) record levels, supporting
increase in PADD 3-to-PADD 1 products trade Result is a tightly supplied Jones Act tanker market and strong daily time charter rates for foreseeable future
__________________________ Source: EIA; Port of Corpus Christi
PADD 3 to PADD1 Transfers by Tanker & Barge
KM Response APT / SCT Tanker Acquisition (Cont’d)
17
Remain. Contract Length (yrs.)
Built/ Current Charterer/ Without WithVessel Delivered Forward Charterer Renewals Renewals 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Golden State Jan-09 Major Integrated 2 5Remaining
Contract TermRenewal Term(s)
Pelican State Jun-09 Major Integrated 2 4Remaining
Contract TermRenewal Term(s)
Sunshine State Dec-09 Major Integrated 3 4Remaining
Contract TermRenewal
Term
Empire State Oct-10U.S. Navy/Major Refiner
7 7Rem. Term
Ren.Term
Forward Charter -- Initial Term
Evergreen State Jan-11U.S. Navy/Major Refiner
6 10Rem. Term
Ren.Term
Forward Charter -- Initial Term Forward Charter -- Renewal Term
4 6
Remain. Contract Length (yrs.)
Built/ Current Charterer/ Without WithVessel Delivered Forward Charterer Renewals Renewals 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
SCT-1 4Q 2015 Major Integrated 5 8 Initial Contract Term Renewal Term(s)
SCT-2 2Q 2016 Major Integrated 5 8 Initial Contract Term Renewal Term(s)
SCT-3 4Q 2016 Major Integrated 5 8 Initial Contract Term Renewal Term(s)
SCT-4 3Q 2016 Major Integrated 5 8 Initial Contract Term Renewal Term(s)
5 8
APT
SCT
__________________________ Note: Remaining Contract Length from 1/1/2014
Petroleum
Gulf Coast Crude Delivery Capacity
19
37%
15%
22%
26%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
Cushing Patoka Permian Eagle Ford
Thou
sand
bar
rels
per
day
Cushing • Seaway • Keystone Patoka • Trunkline Permian • Longhorn • BridgeTex • Cactus • Permian Express • West Texas Gulf Eagle Ford • KMCC • Double Eagle • Other
__________________________ Source: Company disclosures, EIA
Houston – the bucket at the bottom of the crude cascade — 4.5 MMBbl/d of increased pipeline delivery capacity from 2010 to 2015 — Represents roughly 50% of approximately 9.0 MMBbl/d USGC refining capacity
Gulf Coast Crude Runs
20
6,000
6,500
7,000
7,500
8,000
8,500
9,000
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Thou
sand
bar
rels
per
day
5-yr Range 5-yr Average 2012 2013
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000 19
86
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Thou
sand
bbl
per
day
Heavy Imports Medium Imports Light Imports Domestic
__________________________ Source: EIA – (Heavy Crude less than 25 °API; Medium Crude 25-to-35 °API Light Crude greater then 35 °API; 2013 data through September)
2013 runs at historical high — Recent expansions — 7.9 MMBbl/d in 2013
Increasing domestic crude
— 2013 imports have fallen to less than 4 MMBbl/d
— Displaced light imports — Decreasing medium imports — Increasing Jones Act
takeaway
Competitive refining capacity
— Distressed crude — Low natural gas prices — Product export growth
Refined Product Trade Balance
21 __________________________ Source: EIA : (Gasoline includes blendstocks)
(2,500)
(2,000)
(1,500)
(1,000)
(500)
-
500
1,000
1,500
2,000
2,500
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Thou
sand
bar
rels
per
day
Gasoline Jet Diesel Other
U.S. – Shifted from a net importer to exporter of refined product — Gasoline net imports have fallen nearly 1 MMBbl/d — Distillate net exports have grown to 1 MMBbl/d
Gasoline Exports
22 __________________________ Source: EIA – (2013 data through October, Exports include blending components)
0
100
200
300
400
500
600
2009 2010 2011 2012 2013
210
335
526 506 508
(MB
bl/d
)
Padd 1 1%
Padd 2 2%
Padd 3 88%
Padd 5 9%
Mexico 45%
Canada 11%
Other Americas
35%
Africa 4%
Asia 5% Gulf Coast accounts for 88% of gasoline exports
Distillate Exports
23 __________________________ Source: EIA – (2013 data through October)
0
200
400
600
800
1000
1200
2009 2010 2011 2012 2013
587 654
853
1,007 1,095
(MB
bl/d
)
Padd 1 11%
Padd 3 78%
Padd 5 11%
Mexico 10% Canada
2%
Other Americas
49%
Africa 2%
Europe 35%
Asia 2%
Gulf Coast accounts for 78% of diesel exports
KM Response
Executing BOSTCO
— Phase I – 6.2 MMBbl of black oil storage plus two high-speed deep water ship docks, three barge docks (12 spots) and 24 rail spots - started operations in 4Q13
— Phase II – 900MB of ULSD tankage under construction and will be in service 3Q14
Splitter Tankage & Infrastructure — Expanded to 100 MBbl/d and
beyond Houston Export Facility
— 1.4 MMBbl plus ship and barge docks - will be in service 1Q16.
In the Pipeline Pasadena / Galena Park
Infrastructure — 10 tanks (1.2 MMBbl) plus barge
dock and rail expansion ($116MM).
New Projects — BOSTCO Phase III – expansion
includes 3.5 MMBbl plus two additional ship docks and one barge dock (4 spots)
— BOSTCO Pipeline - ULSD pipeline connection from KM Pasadena Terminal
— KM Watco ship dock ($31M) — Additional KM Pasadena /
Galena Park tank builds
24
KMTT 9640 CLINTON
GALENA PARK NORTH PLANT
GALENA PARK TERMINAL
KMTT FERRO OPERATION
VALERO
KINDER MORGAN CRUDE BY RAIL
PASADENA TERMINAL
KINDER MORGAN EXPORT TERMINAL
HOUSTON REFINING LYONDELL
KINDER MORGAN SHIP DOCK
GREENS PORT TERMINAL
JEFFERSON STREET TRUCK RACK
HOUSTON BULK TERMINAL
DEEPWATER TERMINAL
DEER PARK RAIL TERMINAL
PROPOSED PIPELINE
BOSTCO TERMINAL
Houston Ship Channel
25
Kinder Morgan is actively managing over $1.5B of growth projects along the Houston Ship Channel (Tankage increase ‘13 through ‘16)
KMCC GALENA PARK SPLITTER
2013 2016 (a)
Houston Ship Channel Total Barrels 30.7 38.7
__________________________ (a) Does not include BOSTCO Phase III
RFS Requirement(s)
2013 RFS Standard (MM Gallons)
2014 RFS Revisions (MM Gallons)
Cellulosic BioFuel 14 17
Biomass Diesel 1,280 1,280
Advanced Biofuel 2,750 2,200
Corn Ethanol 13,800 (a) 13,000
Total Renewable Fuels 16,550.0 15,210
Ethanol
26
Kinder Morgan Business Segment
Actual Throughput
(MM Gallons) Market Share
of US Demand
Terminals 2,585.0 19.29%
Products Pipeline 1,623.6 12.12%
Total 4,208.6 31.41%
Kinder Morgan Business Segment
Forecast Throughput
(MM Gallons) Market Share
of US Demand
Terminals 2,560.2 19.69%
Products Pipeline 1,785.0 13.73%
Total 4,345.2 33.42%
2013 Actual Throughput
2014 Forecast Throughput
Renewable Fuel Standard (RFS) Revisions (as of November 15 2013)
__________________________ (a) 2013 Corn Ethanol Demand estimated 13,400.0MM Gallons vs. the Mandate Requirement.
Chemical
KM Chemical Network
27 Terminals (a)
10.9MM Bbl Storage Capacity 75+ Products
180+ Customers
28
Liquid Terminal
• Argo, IL • Chicago, IL • Cincinnati, OH (Queen City) • Cincinnati, OH (River T) • Pittsburgh, PA (Dravosburg)
Midwest
Upper River
• Cahokia, IL • Muscatine, IA • St. Louis, MO
Mid River
• Blytheville, AR • Guntersville, AL • Memphis, TN
Lower River • Geismar, LA • Harvey, LA • St. Gabriel, LA • Westwego, LA
Gulf
• Galena Park, TX
• Richmond, CA
Northeast
• Carteret, NJ • Perth Amboy, NJ • Philadelphia, PA
Mid Atlantic • Chesapeake, VA (South Hill) • Norfolk, VA
Southeast • Charleston, SC (Shipyard River) • Chester, SC • N. Charleston, SC • Port Sutton, FL • Wilmington, NC
West
__________________________ (a) Includes 2013 Acquisitions: Chester, Chesapeake, Norfolk
U.S. Chemical Industry Renaissance
29
Global Ethylene Capacity Cost Curve
__________________________ Source: American Chemistry Council; LyondellBasell
Lower natural gas prices have resulted in the increased competiveness of the U.S. chemical industry
— Reversal of industry’s global competitiveness from 2012 — Direct result of higher crude-to-gas ratios
U.S. NGL Prices versus Brent
30
Capital Expenditures Location
__________________________ Source: American Chemistry Council, “Shale Gas, Competitiveness, and New US Chemical Industry Investment: An Analysis Based on Announced Projects”
Over $70 billion in announced U.S. chemical investment as a direct result of lower feedstock prices
— Predominantly in the Gulf Coast petrochemicals — Access to natural gas and NGL feedstock as well as worldwide export markets
U.S. Chemical Industry Investment “Just the 2nd Inning”
KM Response to the Chemical Market
Develop Existing Portfolio Methanex project – leveraging existing Geismar, LA assets to
provide critical marine, rail, and truck access in support of Methanex’s relocated methanol production plant
Harvey Tank Expansion – adding tanks at fully-subscribed Harvey, LA terminal to capitalize on tight lower river chemical storage market
Acquire & Build New Businesses Quality Carriers acquisition – rail and truck chemical terminal in
Chester, SC Allied Terminal acquisition – Chesapeake and Norfolk, VA
terminals Selectively exploring other chemical storage acquisition
opportunities
Growth through Diversification Actively investigating different ways KM can participate in the
chemical – and petrochemical – processes of our customers: in-plant builds, tolling arrangements, etc.
Acquire
Develop
Grow
31
Coal
U.S. remains the second largest seaborne exporter of metallurgical coal behind Australia
Coal overtakes oil as the worlds most consumed fuel in 2019 and is estimated to account for more than 40% of the worlds electric generation by 2035 (a)
China is expected to bring on ~200 GW of power and India is expected to bring on ~70 GW of power by 2017; 1.1 billion metric tons in demand
China’s forecast hot metal production by 2022 is estimated to be 814 Mt, or 23% higher than 2012 production levels
India’s forecast hot metal production by 2022 is estimated to be 76 Mt, or 64% higher than 2012 production levels
Europe’s forecast hot metal production by 2022 is estimated to be 98 Mt, or 18% higher than 2012 production levels
33
International Coal Markets Thermal and Metallurgical Coal Market Conditions & Drivers
Total Seaborne Demand for Met Coal (MMTons) (b)
Global Energy Demand by Fuel (Mtoe) (a)
Projected U.S. Thermal Coal Exports (c)
0
20
40
60
80
100
(MM
sho
rt to
ns)
Europe Asia Other Americas __________________________ (a) Wood Mackenzie Global Horizons Service, Coal to exceed oil by 2020, October 2013 (b) Alpha Natural Resources, European Investor Presentation, December 4, 2013; (c) EIA Annual Energy Outlook 2014 Early Release
34
$417.6MM of Coal Terminal Expansions & Improvements:
Deepwater and Penn City – Houston, Texas New Capacity = 12.7 million net tons Thermal Coal International Marine Terminal (IMT) – Myrtle Grove, LA New Capacity = 11.0 million net tons Thermal Coal Pier IX Terminal – Newport News, VA New Capacity = 1.5 million net tons Metallurgical Coal
Kinder Morgan Coal Export Expansions Export KM Incremental Modeled Export Name Plate Capacity Terminal Investment Capacity Export Volume 2010 2011 2012 2013 2014
Pier IX $ 29.30 1.5 1.0 14.5 14.5 14.5 14.5 16.0
IMT - Export Volume (a) $ 162.80 11.0 7.3 5.0 5.0 5.0 11.0 16.0
Houston Bulk Terminal $ 51.50 2.7 1.2 0.0 2.2 2.2 2.7 2.7
Deepwater $ 174.00 10.0 7.0 0.0 0.0 0.0 0.0 10.0
Total $ 417.6 25.2 16.5 19.5 21.7 21.7 28.2 44.7
2014 Budget assumes 27.5 export tons (b)
2014 Take or Pay equals 24.9 export tons – annualized = 29.1
KM Response: All new export capacity supported by strong, long-term take-or-pay contracts
__________________________ (a) Capital outlay represents KM's net investment in IMT (b) Includes Fairless
Summary Highlights Expected EBDDA growth in 2014 – 21.46% Only true national bulk and liquids terminal network Largest terminal footprint in U.S. and Canada = significant capital investment
opportunities. Significant growth from opportunities currently under development – $2.3 billion
in project backlog – with an additional $250-600 million of identified future projects being investigated
— Export distillate and gasoline — Edmonton tank expansion and take-away capacity development — Crude by rail terminal development — Chemical network development -- inside the fence line expansion and greenfield
projects Continued focus on KMT’s safety performance
— 1.64 TRIR vs. comparable marine cargo handling / other warehouse and storage industry average of 6.45 (a)
35 __________________________ (a) Composite of liquids ILTA, port and harbor operations and marine and cargo handling
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