seaway pipeline and cushing - platts · significant growth, mostly north of cushing note: does not...

All rights reserved. Enterprise Products Partners L.P.

Seaway Pipeline and Cushing

September 20, 2012

www.enterpriseproducts.com

Tony Chovanec VP, Fundamentals /

Strategic Assessment

All rights reserved. Enterprise Products Partners L.P. 2

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,” “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.


Enterprise Overview

Largest publicly traded energy partnership in United States with an enterprise value of approximately $63 billion 62nd on Fortune 500 226th on Fortune Global 500 Integrated midstream energy system serving producers and consumers of natural gas, NGLs, crude oil, petrochemicals and refined products Access to prime natural gas / NGL / crude oil supply basins in the U.S. Pipelines connected to every U.S. ethylene steam cracker (largest

consumer of NGLs) and ≈95% of refining capacity east of the Rockies Diversified businesses and sources of cash flow Significant investment in new natural gas, NGLs and crude oil infrastructure to support development of shale plays including: Eagle Ford, Rockies, Haynesville, Permian Basin and Marcellus / Utica $7.5 billion of growth projects under construction


EPD Portfolio of Integrated Assets

50,700 miles of natural gas, NGL, crude oil, refined products and petrochemical pipelines 190 MMBbls of NGL, refined products and crude oil, and 14 Bcf of natural gas storage capacity 25 natural gas processing plants

20 NGL & Propylene fractionators 6 offshore hub platforms NGL import / export terminals Butane isomerization complex; octane enhancement facility; high-purity isobutylene facility

Major Asset Overview


Existing Wells and Shale Plays It’s No Coincidence

Source: USGS Production 2008

Crude Oil Gas

Gas

EPD Pipelines

Existing North American Production

Shale Plays

Oil

Liquids (NGL & Products)


The Science of the Shales

Hydrocarbons from shale rocks are the source for conventional oil and gas We have known about shales and their potential for years but could not extract their oil and gas in economic quantities Horizontal drilling and fracking techniques now enable hydrocarbon recovery from the natural fractures found in shales

Source: Rygel, M. C.


Continually Evaluating Emerging Shale / Non-Conventional Plays

Williston Basin Bakken

Uinta Basin Mancos

Piceance Basin Mancos

Fort Worth Basin Barnett

Black Warrior Basin Floyd & Chattanooga

Arkoma Basin Woodford

Delaware Basin Barnett / Woodford

South Texas Eagle Ford & Pearsall

North Louisiana, East Texas Haynesville

& Bossier

Denver Basin Niobrara

San Juan Basin Mancos

Michigan Basin Utica

Powder River Basin Niobrara

Appalachian Basin Marcellus

Permian Basin Bone Spring

Avalon & Wolfcamp

Appalachian Basin Utica

South Louisiana Tuscaloosa Marine

Primarily Rich Gas Primarily Dry Gas

Jonah Pinedale

Anadarko Basin Woodford

Anadarko Basin Hz Mississippian

Arkoma Basin Fayetteville

Illinois Basin New Albany

Michigan Basin Antrim

Source: EPD Fundamentals


Oil and Condensate Shale / Non- Conventional Plays

Williston Basin Bakken

Uinta Basin Wasatch, Mancos

Ft Worth Basin Barnett Combo

South Texas Eagle Ford,

Pearsall, Woodbine

Denver Basin Niobrara

San Juan Basin

Mancos

Michigan Basin Utica,

Collingwood

Powder River Basin

Niobrara

Permian Basin Bone Spring,

Avalon, Wolfcamp,

Cline

Appalachian Basin

Utica, Marcellus

South Louisiana Tuscaloosa Marine

Anadarko Basin Woodford

Anadarko Basin Mississippian

Anadarko Basin Granite Wash

Gulf of Mexico Deepwater

North Louisiana Brown Dense



Framing the Opportunity Shale Longevity

Play Estimated Acres

Remaining Locations

Wells per Year

Potential Years of Drilling

Eagle Ford 10,000,000 100,000 2,500 40

Barnett 4,000,000 30,000 (>19,000 drilled)

1,000 30

Haynesville / Bossier 3,500,000 50,000 1,000 50

Marcellus 15,000,000 175,000 1,650 100

Utica 13,000,000 50,000 600 80

Mississippian 6,500,000+ 30,000+ 600 50



2

4

6

8

10

12

14

1981 1986 1991 1996 2001 2006 2011

MMBbl/d

Imports of Crude Oil and Petroleum Products to U.S.vs. U.S. Domestic Oil Production

U.S. Net Imports of Crude Oil and Petroleum Products U.S. Field Production of Crude Oil and Petroleum Products

Falling Production and Growing Imports Trends Recently Reversed

Source: EIA


A Very Different Balance in Just 5 Years

Source: EIA

…while the U.S. has moved from a net refined product

importer to a large exporter.

U.S. oil imports from outside of North America have fallen by >1.5 MMBPD…

* includes oxygenates & gasoline blendstocks

U.S. Crude Oil Imports excluding Canada & Mexico Down 1.5 MMBPD

Finished Petroleum Products Net Imports Net Change >2.5 MMBPD


U.S. and Canadian Oil Production: Significant Growth, Mostly North of Cushing

Note: Does not include volumes for plays currently in the Pilot stage such as Utica, Niobrara, Mancos and Tuscaloosa. Sources: EPD Fundamentals and CAAP

US / Canada Oil Forecast

0

2

4

6

8

10

12

14

16

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

MM

Bop

d

0

2

4

6

8

10

12

14

16

South of Cushing

North of Cushing

Canada

+2.3 MMBPD Fr. 2008

+4.5 MMBPD Fr. 2008

+6.5 MMBPD Fr. 2008

MM

BP

D

U.S. / Canada Oil Forecast


Forecasted Change in Oil Production 2008 to 2020, MMBPD

Canada

CA/AK NE US

Mid-Cont.

Rockies

Williston

Permian

Offshore

+2.40

+1.11

–0.52 +0.26 +0.26

+0.54

+0.80

+0.58

Gulf Coast +1.07

North of Cushing / 4.05 MMBpd

South of Cushing / 2.45 MMBpd

Sources: EPD Forecasts and CAAP


EPD Crude Oil System Map


EPD Cushing Connectivity

Cushing Total

74 MM Capacity

EPD Equity Storage

3.1 MM Barrels

Seaway 30”

150 Basin 24”

450

PAA (Red River) to GW 10”

50

SEM to Ardmore 8”

17

ENB Spearhead 24”

195

SUN 6”

15

OXY 16”

130

PAA Cherokee 12”

30

Keystone 36”

600

SEM White Cliffs 12”

60

BP 20” to Whiting

180

Ozark 22/24”

270

Magellan West Tulsa 8”

30

Sun Tulsa 10”

60

COP Ponca 20”

100 PAA to CVR 16”

100

Osage 16”

160

COP Borger 12”

53

OXY Slaughter 16”

75

Inbound Pipelines

Outbound Pipelines

Inbound Capacity: 1,505 MBPD Outbound Capacity: 1,295 MBPD

EOG Stroud 12”

75

ENB Tulsa 10”

50

Source: EPD Internal Records


Cushing Storage Inventories

Sources: Reuters and EPD Fundamentals

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

Sep

-10

Oct

-10

Nov

-10

Dec

-10

Jan-

11

Feb-

11

Mar

-11

Apr

-11

May

-11

Jun-

11

Jul-1

1

Aug

-11

Sep

-11

Oct

-11

Nov

-11

Dec

-11

Jan-

12

Feb-

12

Mar

-12

Apr

-12

May

-12

Jun-

12

Jul-1

2

Aug

-12

Sep

-12

Oct

-12

Nov

-12

Dec

-12

Jan-

13

Feb-

13

Mar

-13

Apr

-13

May

-13

Jun-

13

Jul-1

3

Aug

-13

Sep

-13

Oct

-13

Nov

-13

Dec

-13

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

Sep-

10

Nov

-10

Jan-

11

Mar

-11

May

-11

Jul-1

1

Sep-

11

Nov

-11

Jan-

12

Mar

-12

May

-12

Jul-1

2

Sep-

12

Nov

-12

MB

bls

Cushing Crude Oil Inventories

Current storage Cushing Working Capacity


Seaway Reversal: Phase I

Phase I: reversal of existing Seaway pipeline Began southbound

service in May 2012 – Utilizes an existing

pump at Cushing Modifying to fully

reverse service by 1Q 2013

/ Port Arthur

/ Port Arthur


Seaway Reversal: Picture 1


Seaway Reversal: Picture 2


Seaway Loop: Phase II

New 65 mile 36” lateral pipeline to link Seaway to Enterprise’s ECHO Terminal

New 512 mile 30” pipeline from Cushing to Jones Creek

Combined capacity of 850 MBPD in mixed (heavy / light) service

New 85 mile 30” lateral pipeline from ECHO to the Beaumont / Port Arthur area

Supported by commitments of up to 20 years

Provide producer access to over 4 million barrels of demand from Gulf Coast refineries

Access to EPD’s ECHO Terminal


Houston ECHO Terminal

ECHO Terminal Property

Purchased 2/10/12


Houston ECHO Terminal

ECHO Terminal will connect Eagle Ford, Bakken, WTI, Mid-Continent, West Texas, Gulf of Mexico and foreign imports to Houston and Beaumont / Port Arthur Refineries Build out up to 6 MMBbls of storage

2013 NYMEX pricing point for the Houston market Pipeline operational storage and space for 3rd party merchant storage Significant marketing opportunities

EPD ECHO Crude Oil Terminal

Cushing, OK Crude Oil Complex

West Texas Crude Production

Eagle Ford Crude Production

South Texas Crude Production

Houston

Refining Complex

Texas City Refining Complex

Water Access to ≈5 million Bbls USGC Market (excl. Houston) Seaway Texas City

& Freeport Docks

Canadian / Bakken Crude Production

Beaumont / Port Arthur

Refining Complex



Historical Forecast

Source: NYMEX

Not $5.00 until 2019

Crude Oil and Natural Gas Prices Stable and Competitive


Timeline to Energy Security

Sources: EIA and EPD Fundamentals

Liquid Petroleum Products (MBPD)

2007 2012 YTD

2020 EPD

U.S. Consumption (excl. exports) 20,700 18,500 19,000

U.S. Production (incl. refinery gain & renewables) 8,500 10,900 15,000

Net Imports Required 12,200 7,600 4,000

Net Imports from Canada / Mexico 3,500 3,100 4,000

Imports from Rest of World 8,700 4,500 -0-

seaway pipeline and cushing - platts · significant growth, mostly north of cushing note: does not...

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