Ernesto Ochoa Tennessee Gas Pipeline Mexico, a New Landscape September 14, 2017
Forward-Looking Statements This presentation includes forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts. In particular, statements, express or implied, concerning future actions, conditions or events, future operating results or the ability to generate revenues, income or cash flow or to pay dividends are forward-looking statements. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future actions, conditions or events and future results of operations of Kinder Morgan, Inc. may differ materially from those expressed in these forward-looking statements. Many of the factors that will determine these results are beyond Kinder Morgan's ability to control or predict. These statements are necessarily based upon various assumptions involving judgments with respect to the future, including, among others, the timing and extent of changes in the supply of and demand for the products we transport and handle; national, international, regional and local economic, competitive and regulatory conditions and developments; the timing and success of business development efforts; technological developments; condition of capital and credit markets; inflation rates; interest rates; the political and economic stability of oil producing nations; energy markets; weather conditions; environmental conditions; business, regulatory and legal decisions; terrorism, including cyber-attacks; and other uncertainties. There is no assurance that any of the actions, events or results of the forward-looking statements will occur, or if any of them do, what impact they will have on our results of operations or financial condition. Because of these uncertainties, you are cautioned not to put undue reliance on any forward-looking statement. Please read "Risk Factors" and "Information Regarding Forward-Looking Statements" in our most recent Annual Report on Form 10- K and our subsequently filed Exchange Act reports, which are available through the SEC’s EDGAR system at www.sec.gov and on our website at www.kindermorgan.com. 2
The Big Picture Dramatic supply growth continues Marcellus , Utica , Permian , Eagle Ford ….. Unconventional = the “new” conventional? Gas demand continues growth trajectory US economy : power gen residential / industrial Exports : LNG ; Mexico Infrastructure impetus New sources new plumbing supply to market Mexico Energy Reform 3
Current Key Trends Ind +3.1 Bcfd +7.7 Bcfd +9.6 Bcfd Res +1.9 Bcfd U.S. becomes net exporter Industrial demand growth Gas-fired generation increases +20.1 Bcfd +1.5 Bcfd -2.0 Bcfd More U.S. Exports to Mexico Less Canadian Exports to U.S. Continued supply increases 4 Source: ICF International and Kinder Morgan Analysis
Natural Gas Supply BCF/d 5 Source: ICF International and Kinder Morgan Analysis
Key Natural Gas Basins Well-positioned connecting key natural gas resources with major demand centers __________________________ (a) Includes KM share of non-wholly owned projects. Includes 6 projects currently under construction.
Demand 7 Source: ICF International and Kinder Morgan Analysis
Flow Changes 8 Source: ICF International and Kinder Morgan Analysis
Mexico Supply Demand Forecast SENER Forecasts demand in Mexico to grow by 1.3 Bcfd between 2016 and 2026 24 GW of renewable power generation capacity being installed between 2016 and 2030 No natural gas storage in Mexico Production in Mexico is forecasted to grow 460 MMcfd from 2016 to 2026 Imports are forecasted to grow by 850 MMcfd between 2016 and 2026 9
Regional Demand Growth Regional Demand Forecasts 10,000 9,000 8,000 Noroeste 7,000 Demand (mmpcd) +380 6,000 Noreste 5,000 4,000 3,000 2,000 +440 1,000 0 Centro- 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Occidente Noroeste Noreste Centro-Occidente Centro Sur-Sureste +700 Centro Sur-Sureste -20 -230 Source: SENER 10
Mexico Energy Reform CENAGAS formed CENAGAS Operating Gas Pipelines Mexico auctions pipeline capacity New CENACE - Electricity Market Commences 2014 2015 2016 2017 2018 Round 0 Bidding Petroleum product prices deregulated Energy Reform Market-based gas Authorized via Round 1 Bidding pricing change to Mexico’s Additional bidding rounds Constitution Electricity Gas Transmission Oil & Gas Production Open to private investment More merchant generation . Shipper direction 11
Open / Competitive Natural Gas Market Transparent Pipeline Natural Gas Storage / Pricing at Law “Liquid” Capacity Supply Balancing HUBS Need all to have a successful market 12
Kinder Morgan / Mexico – Strong History • Interconnect • Authorized Export • 12 Direct Capacity • 4 Indirect BCF/d 16 3.1 2.9 667 BCF/d $Millions • Current • Capital supply to Invested Mexico since 2013 13
Kinder Morgan Supply Points Export Points Capacity STRONG CONECTIVITY 500 1 North Baja A Sierrita 200 B Nogales C 9 NGPL D Willmex + Monument 187 EPNG A E El Fresnal 199 Sierrita F Douglas 117 G B F C D G Samalayuca + Cactus Hill 910 E Midstream H Border 300 I Texas/Monterrey 700 MEXICO J N Tejas to NET 712 2 M TGP J HI K TGP Pemex 185 K L L TGP Rio Bravo 320 M TGP to NET 513 2 1 Capacity is based on North Baja pipeline which receives gas from EPNG N NGPL to NET 500 2 14 2 Capacity based on Tejas, NGPL, and TGP delivery point capacities to NET Mexico
Exports to Mexico
TGP Supply Diversity • TGP touches > 42 Bcf/d of diverse shale supply basins Utica • ~ 2 Bcf/d of northeast supply flows through Sta. 87 4.6 Bcf/d • Average flowing supply (2017): 8.6 Bcf/d • Deliveries to Mexico at ~ 1 Bcf/d Marcellus Fayetteville 19.8 Bcf/d 1.1 Bcf/d Haynesville 6.7 Bcf/d Barnett 3.4 Bcf/d Eagle Ford 6.4 Bcf/d NET Mexico Reynosa Rio Bravo 16
TGP Exports to Mexico TGP Exports to Mexico Pemex Net Flows 400,000 300,000 200,000 100,000 Dth - (100,000) (200,000) (300,000) 1/1/2005 1/1/2006 1/1/2007 1/1/2008 1/1/2009 1/1/2010 1/1/2011 1/1/2012 1/1/2013 1/1/2014 1/1/2015 1/1/2016 Rio Bravo Deliveries 350,000 300,000 250,000 200,000 Dth 150,000 100,000 50,000 - 1/1/2005 1/1/2006 1/1/2007 1/1/2008 1/1/2009 1/1/2010 1/1/2011 1/1/2012 1/1/2013 1/1/2014 1/1/2015 1/1/2016 17
TGP Export ts TGP Exports to Mexico NET Deliveries 600,000 500,000 400,000 Dth/d 300,000 200,000 100,000 - 18
MX Import Demand vs. Import Pipe Capacity 16 14 12 10 Bcf/d 8 6 4 2 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 CA AZ West TX South TX Imports (Forecast) 19
US Exports Points to Mexico
More Supply Needed at Agua Dulce Growing Demand ~3 BCF/d Supply Deficit Capacity ~5.4 Bcf/d + Other Local Supply 1.0 Bcf/d 1.2 Bcf/d LNG Agua Dulce 2.1 Bcf/d 2019 Demand 9.6 Bcf/d KM Border / Mier 1.0 Bcf/d Valley Crossing 2.6 NET Mexico Bcf/d (Oct-18) TETCO TGP 2.1 Bcf/d 0.3 Bcf/d 0.5 Bcf/d 21
Gulf Coast Express Pipeline Delaware Basin Midland Basin 1.8 BCF/d KATY MARKETS Adds much needed supply into South Texas LNG EXPORTS 17 22
Kinder Morgan Border Expansion 150,000 Dth/d 23 19
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