el paso 05_22%20yardley_mlp%20investor%20confr_final(web)
TRANSCRIPT
El Paso Pipeline Partners
James C. YardleyPresident & Chief Executive Officer
El Paso Pipeline GP Company, L.L.C.
2008 MLP Investor ConferenceMay 22, 2008
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Cautionary StatementRegarding Forward-Looking Statements
This presentation includes forward-looking statements and projections, made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. El Paso Pipeline Partners has made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this presentation, including, without limitation, the ability to obtain necessary governmental approvals for proposed pipeline projects and to successfully construct and operate such projects; operating hazards, natural disasters, weather-related delays, casualty losses and other matters beyond our control; the risks associated with recontracting of transportation commitments; regulatory uncertainties associated with pipeline rate cases and other tariff filings; actions taken by third-party operators, processors and transporters; conditions in geographic regions or markets served by El Paso Pipeline Partners and its affiliates and equity investees or where its operations and affiliates are located; the effects of existing and future laws and governmental regulations; competitive conditions in our industry; changes in the availability and cost of capital; and other factors described in El Paso Pipeline Partners’ (and its affiliates’) Securities and Exchange Commission filings. While these statements and projections are made in good faith, El Paso Pipeline Partners and its management cannot guarantee that anticipated future results will be achieved. Reference must be made to those filings for additional important factors that may affect actual results. El Paso Pipeline Partners assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made, whether as a result of new information, future events, or otherwise.
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Investment Highlights
El Paso is the premier U.S. natural gas pipeline companyAlignment of interests (67% ownership + IDRs)
Strategic growth vehicle for El PasoWell located, high-quality assetsSignificant contracted organic growth projects Growth through potential acquisitions - third party, drop down or both
90%+ revenue from capacity reservation chargesAverage contract life of more than 8 years
Financial Flexibility Strong and flexible financial position
Strong Sponsorship
Growth Vehicle
Stable CashFlow
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MLP OpportunitiesC
ash
Flow
Sta
bilit
y
Asset LifeLow High
InterstatePipelines
Price stability Long-term firm demand contractsStable asset base
Majority of alternative MLP’s
Low
Hig
h
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El Paso Pipeline PartnersPrimary focus is natural gas transmission and storage assetsThree FERC regulated interstate pipelines:
100% of WIC: 800 miles, 2.7 Bcf/d10% of CIG: 4,000 miles, 3.0 Bcf/d10% of SNG: 7,600 miles, 3.7 Bcf/d
Demand-based revenues from high- quality customers with strong credit profilesSeveral organic expansions underway
Diverse, growing supply regions High connectivity to growing demand regions
SNGWICCIG
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Sponsor Committed to Growth
28,437,786 EPB Common Units27,727,411 EPB Subordinated Units
GP interest and incentive distribution rights
33.2% LP
Public Unitholders28,756,250 EPBCommon Units
64.8% LP2.0% GP
Organic projects
Third-party acquisitions
Drop downs from El PasoMost pipeline assets suitable for MLP$2.4 billion NOL at December 31, 2007
Commitment to Growth
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Stable Cash Flow
Capacity Reservation ChargesVariable ChargesInterruptible Contracts
WIC CIG SNG2007 Revenue Composition*
98.1%1.3%0.6%
89.3%7.0%3.7%
88.3%7.4%4.3%
Weighted Average Contract Life
10 years 5 years 6 years
Capacity reservation charges result in cash flow stability
*Excludes liquids and fuel retention revenues
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Best Positioned AssetsChanges 2007–2016 (Bcf/d)
Source: El Paso Corporation
-2.0
-1.10.6-0.8
-1.3-1.0-0.7
-1.0
1.5
3.8 0.6
1.1
2.20.42.7
1.20.64.9
2.1
5.6
0.4
0.6
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Rockies Production Growth19
9019
9119
9219
9319
9419
9519
9619
9719
9819
9920
0020
0120
0220
0320
0420
0520
0620
0720
0820
0920
1020
1120
1220
1320
1420
1520
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DenverPiceanceUintaPowder RiverOverthrustGreen RiverWind RiverBig Horn
Forecast by 2016 (Bcf/d):
High Case 13.3Mid Case 11.9Low Case 10.4
Forecast
1990–2006: Wellhead total data from HIS database2007–2016: El Paso forecast
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12
10
8
6
4
2
0
+3 Bcf/d
Wellhead Volumes in Bcf/d
10Note: $ in each column represents costs for each project, shown in the year of expenditure;
As of March 31, 2008
Committed Expansion Projects
$32432
$430156
100% ShareNet to EPB
Cypress IIISESHSS III
Cypress (II&III)SESHSS III
SNG
High PlainsTotem Storage
CIG
Kanda LateralMedicine Bow
Piceance Basin
WIC2010 & Beyond2008–2009
Solid inventory of organic growth
$ Millions
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Wyoming Interstate Company—WICOrganic Growth
Nearly $100 MM of committed growth projects
Powder RiverBasin
Opal Hub
Greasewood Compressor
Station
Douglass Compressor
Station
Contracted Capacity
Contracted Capacity
WIC Medicine Bow Expansion
$37 MMSeptember 2008
330 MMcf/d
WIC Piceance Lateral$62 MM4Q 2009
220 MMcf/d
Midpoint Compression
Station
UintaBasin
PiceanceBasin
Cheyenne Hub
Greater GreenRiver Basin
UT
WY
CO
Wamsutter Compression
Station
Note: As of March 31, 2008
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Colorado Interstate Gas—CIGOrganic Growth
CIG High Plains Pipeline
$198 MM (100%)November 2008
900 MMcf/d
CIG Totem Storage$133 MM (100%)
July 2009200 MMcf/d
Major HubsCIG Storage FieldsHigh PlainsCIG
Anadarko Basin
DJ Basin
Powder RiverBasinWind River
Basin
Greater GreenRiver Basin
Overthrust Basin
UintaBasin
PiceanceBasin
Beaver Compressor
Station
Cheyenne Hub
UT
CO
NE
WY SD
KS
RatonBasin
$166 MM of CIG committed growth projects, $17 MM net to EPB
NM
Opal Hub
Note: As of March 31, 2008
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Southern Natural Gas—SNGOrganic Growth
SNG SESH—Phase I$150 MMJuly 2008
140 MMcf/d
SNG South System III/ SESH Phase II
$285 MM / $35 MM2010–2012
370 MMcf/d / 350 MMcf/d
SNG CypressPhase II & III
$20 MM / $85 MMMay 2008 / January 2011115 MMcf/d / 160 MMcf/d
$575 MM of committed growth projects, $58 MM net to EPB
Note: As of March 31, 2008
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Strong Financial Position
Cash and cash equivalents
Revolving borrowingsCapital lease obligations
Total debtPartners’ capital
Total capitalization
Credit StatisticsDebt/capitalization
$ 9
4958
503408
$911
55%
March 31, 2008
$ Millions
Well positioned for future growth
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The MLP to Own
Diverse, growing supply regions
WICCIG SNG
Strong sponsorshipStable cash flowGrowth vehicleFinancial flexibility
High connectivity to growing demand regions
El Paso Pipeline Partners
James C. YardleyPresident & Chief Executive Officer
El Paso Pipeline GP Company, L.L.C.
2008 MLP Investor ConferenceMay 22, 2008
Appendix
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El Paso Pipeline Group
Source: El Paso Corporation based on 2007 dataNote: Includes El Paso Corporation and El Paso Pipeline Partners, L.P.
El PasoNatural Gas
Mexico Ventures
MojavePipeline
ColoradoInterstate Gas
Wyoming Interstate
Cheyenne Plains Pipeline
TennesseeGas Pipeline
SouthernNatural Gas
Florida GasTransmission (50%)
Elba IslandLNG
19% of total U.S. interstate pipeline mileage24 Bcf/d capacity (16% of total U.S.)17 Bcf/d throughput (28% of gas delivered to U.S. consumers)
Gulf LNG(50%)
North America’s Leading Natural Gas Pipeline Franchise