Spectra Energy Partners
Roni Cappadonna
General Manager, Investor Relations 713.627.4778 | Roni.Cappadonna@enbridge.com
Spectra Energy Partners Roni Cappadonna General Manager, Investor - - PowerPoint PPT Presentation
Spectra Energy Partners Roni Cappadonna General Manager, Investor Relations 713.627.4778 | Roni.Cappadonna@enbridge.com Legal Statements SAFE HARBOR STATEMENT / FORWARD-LOOKING INFORMATION Some of what well discuss today concerning future
Roni Cappadonna
General Manager, Investor Relations 713.627.4778 | Roni.Cappadonna@enbridge.com
SAFE HARBOR STATEMENT / FORWARD-LOOKING INFORMATION Some of what we’ll discuss today concerning future company performance will be forward-looking information within the meanings of the securities laws. Actual results may materially differ from those discussed in these forward-looking statements, and you should refer to the additional information contained in Spectra Energy Partners’ Form 10-K and other filings made with the SEC concerning factors that could cause those results to differ from those contemplated in today’s discussion. The terms “we,” “our,” and “us” refer to Spectra Energy Partners. Also, this communication includes certain forward looking statements and information (“FLI”) to provide shareholders and potential investors with information about us and our subsidiaries and affiliates, including management’s assessment of us and our subsidiaries’ future plans and operations, which FLI may not be appropriate for
words suggesting future outcomes or statements regarding an outlook. All statements other than statements of historical fact may be FLI. Although we believe that the FLI is reasonable based on the information available today and processes used to prepare it, such statements are not guarantees of future performance and you are cautioned against placing undue reliance on FLI. By its nature, FLI involves a variety of assumptions, which are based upon factors that may be difficult to predict and that may involve known and unknown risks and uncertainties and other factors which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by these FLI, including, but not limited to, the following: estimated future dividends; financial strength and flexibility; debt and equity market conditions, including the ability to access capital markets on favorable terms or at all; cost of debt and equity capital; expected supply and demand for crude oil, natural gas, natural gas liquids and renewable energy; prices of crude oil, natural gas, natural gas liquids and renewable energy; economic and competitive conditions; expected exchange rates; inflation; interest rates; tax rates and changes; completion of growth projects; anticipated in-service dates; capital project funding; success of hedging activities; availability and price of labor and construction materials; operational performance and reliability; customer, shareholder, regulatory and other stakeholder approvals and support; regulatory and legislative decisions and actions; public opinion; and weather. We caution that the foregoing list of factors is not exhaustive. Additional information about these and other assumptions, risks and uncertainties can be found in applicable filings with U.S. securities regulators. Due to the interdependencies and correlation of these factors, as well as other factors, the impact of any one assumption, risk or uncertainty on FLI cannot be determined with certainty. Except to the extent required by law, we assume no obligation to publicly update or revise any FLI, whether as a result of new information, future events or otherwise. All FLI in this presentation is expressly qualified in its entirety by these cautionary statements. REG G DISCLOSURE In addition, today’s discussion includes certain non-GAAP financial measures as defined under SEC Regulation G. A reconciliation of those measures to the most directly comparable GAAP measures is available on our website.
Legal Statements
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Investor Value Proposition
Stable business model
pipeline focused
no direct commodity exposure and minimal volume risk
customers
Outstanding asset footprint
for further demand-pull expansion
project execution
Prudent financial management
grade balance sheet
Attractive distribution grow th
distribution increase
strong coverage
We go “where the lights are” – connecting diverse supply basins with regional demand markets – “last mile” competitive advantage
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Premier Asset Footprint
Critical gas & liquids infrastructure
US Transmission $2,020 MM
Maritimes & Northeast, US Algonquin Texas Eastern Express Pipeline Ozark Gas Gulfstream Sabal Trail East Tennessee
Big Sandy
SESH Platte Pipe Line
growing demand markets
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Strategic Focus
Rock solid base; fully subscribed reservation-based contracts with no direct commodity exposure and minimal volume risk
~$2.5B of growth projects in execution
Infrastructure footprint with connections to major demand-pull markets
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Sabal Trail – restored ROW
Business Entity Overview
Assets
2018e EBITDA
U.S. Transmission Liquids
~$2.3B
Assets
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95% 98% 98% 99% 98% 97% 100% 96%
Texas Eastern Gulfstream Algonquin East Tennessee Southeast Supply Header Maritimes & Northeast US Sabal Trail UST TOTAL(1)
2017 Usage & Other Revenue 2017 Reservation Revenue
U.S. Transmission
Revenue stability in base business
U.S. Transmission Reservation Revenue
(Based on transmission revenues for 12 months ended 12/31/17)
9
years
Average Remaining Contract Life
12
years
8
years
8
years
5
years
15
years
Achieved Peak Delivery Days in 2017
(1) Includes Texas Eastern, Gulfstream, Algonquin, East Tennessee, Southeast Supply Header, Ozark Gas Transmission, Big Sandy and Maritimes & Northeast US
Stable core business highlights valuable footprint and provides platform for growth
9
years
8
25
years
(1) Includes all UST assets as presented on slide 6 of this presentation
U.S. Transmission
LDCs 41% Marketers 21% Pow er Gen 12% Other < 5% Producers 21%
2017 US Transmission Firm Demand Revenues
by Customer Type:
2017 Texas Eastern & Algonquin contract renewal rate = 98%
Contract Portfolio
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LDCs 51% Marketers 26% Producers 14% Pow er Gen 4% Other 2% Pipelines 3%
2017 TETLP & AGT Firm Demand Revenues
by Customer Type:
U.S. Transmission U.S. Transmission:
Secured projects
NEXUS Atlantic Bridge PennEast
Greenfield pipeline
TEAL STEP Stratton Ridge
1) Represents SEP’s portion 2) Partial in-service Nov 2017 with remaining in 4Q18
Project Expected ISD Capital ($MM)
2018 Bayway Lateral 4Q17 30 NEXUS1 3Q18 1,300 TEAL 3Q18 200 Atlantic Bridge2 4Q18 500 STEP 4Q18 130 2019+ Stratton Ridge 1H19 200 PennEast1 2019 260 Lambertville East 2H19 45 Texas-Louisiana Markets 2H19 20
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Sabal Trail Transmission
Project Scope: 1+ Bcf/d of capacity connecting Transco Station 85 supply to Florida power generation market CapEx: $3.2B1 Customers: Florida Power & Light; Duke Energy Facilities: 495 miles of 36” greenfield pipeline; and 21 miles of 24” greenfield pipeline 5 new compressor stations totaling up to 210,000 horsepower; to be phased-in 2017 – 2021 New metering and regulating stations; creates new Central Florida Hub with interconnects with Gulfstream, FGT and Florida Southeast Connection Volume ramp-up
New interstate pipeline into Florida
increases diversity of supply
1) CapEx shown at 100%
Timing Commercial Volumes Through 1H20 70% capacity 1H20-1H21 90% capacity Post 1H21 100% capacity
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NEXUS
Delivering Prolific Supply to Premium Markets
1.5 Bcf/d of Marcellus gas to markets in Ohio, Michigan and Ontario
Vector Enbridge Gas Distribution & Union Gas Daw n Hub Texas Eastern
Interconnects: LDC Power / Industrial Storage Pipeline Route: NEXUS DTE Gas Vector 12
U.S. Transmission
connections to major markets offers strong advantages for our customers
continues to increase
growing natural gas-fired power market in U.S. and Mexico, LNG exports, and U.S. industrial market
Development opportunities
Existing, attached gas-fired plant Planned gas-fired plant
Market Region Expansions LNG & Industrial Exports to Mexico Power Generation
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Philly Market Expansions New England Opportunities
BOSTON NYC PHILADELPHIA DC DETROIT
NEXUS
Dawn Hub
Northeast & New England
Development opportunities in next 5 years
Natural gas fired generation replaces other retiring generation sources
Northeast / New England
gas to the region
Philadelphia Market
and exports
$1-3B
in opportunities
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ORLANDO TAMPA
Power generation
NOLA
FL AL GA MS
Southeast Markets
Development opportunities in next 5 years
Continued growth in natural gas fired power generation
Southeast Markets
$1-2B
in opportunities
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Gulf Coast Markets
Development opportunities in next 5 years
New Gulf Coast natural gas demand drives solid growth opportunities
Gulf Coast
Mexico exports
Exports to Mexico
NOLA MT BELVIEU Mexico
TX LA MS
LNG & Industrial
$2-4B
in opportunities
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Express Platte
Buffalo Hardisty Edgar Casper Guernsey Gurley Cushing Patoka Salisbury Wood River
Express & Platte Pipelines
Express Pipeline – 280 kbpd
Canadian crude supply
Platte Pipeline – 170 kbpd
Potential Commercial Synergies
Gulf Coast Markets
ETCO
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SEP Financial Outlook, 2018e-2020e
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(1) Subject to BOD approval.
Distributable Cash Flow 2018e 2019e 2020e Ongoing EBITDA
~$2,300 ~$2,320 ~$2,350
Earnings from equity investments
~(280) ~(215) ~(295)
Distributions from equity investments
~260 ~315 ~360
Maintenance capital
~(230) ~(250) ~(200)
Financing Costs
~(315)
Distributions to non-controlling interests
~(50)
Equity AFUDC
~(45)
Other
~10
Distributable Cash Flow
$1,630 - $1,670 ~$1,730 ~$1,800
Coverage
1.1x - 1.2x 1.1x – 1.2x 1.1x – 1.2x
DCF Grow th Drivers
UST Expansion Projects
++
Lower Maintenance Capital
+
Cost management
+
Distribution Grow th
Secured Capital Program 2018:
$0.0125/qtr1
(~7% vs 2017) 2019/20:
4-6% per year 7% dividend increase in 2018; secured capital program alone delivers 4-6% annual distribution growth through 2020
Key Balance Sheet Metrics
Committed to investment grade balance sheet
12/31/17
Total Debt
$8.5B
Financial Covenant Metrics(1)
4.1x
Debt/EBITDA Credit Ratings(2)
Baa2 / BBB+ / BBB
Available Liquidity
$0.4B
(1) Calculated in accordance with the credit agreements; max 5.0x (2) Moody’s / S&P / Fitch senior unsecured ratings
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2017 Credit Exposure
"A" rated or higher "BBB" rated Sub-investment grade
BB and Below
(1) Credit Exposure reflected after impact of any credit enhancement
Credit Exposures by Counterparty Rating(1)
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Investment Grade
Consolidated Debt Maturity Profile
$- $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800
2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048
SEP, LP Texas Eastern Algonquin East Tennessee Express-Platte
US$ Millions As of 2/1/18
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Projects in Execution
SUPPLY PUSH
100% 100% 50/50
DEMAND PULL Note:
In-Service Date Counterparties
(USD $MM)
2018
Bayway Lateral 4Q17 30 NEXUS(1) 3Q18 1,300 TEAL 3Q18 200 Atlantic Bridge(2) 4Q18 500 STEP 4Q18 130
2019
Stratton Ridge 1H19 200 PennEast(1) 2H19 260 Lambertville East 2H19 45 Texas-Louisiana Markets 2H19 20
Total Projects in Execution ~$2.5B
Continue to pursue development projects
1) Represents SEP’s portion 2) Partial in-service Nov 2017 with remaining in 4Q18
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Atlantic Bridge
Purpose:
To allow abundant, economic supplies of natural gas from regional production to flow to the New England & Atlantic Canada markets
Project Scope:
Pipelines
Customers:
Project Status:
Preliminary Facilities:
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Purpose: Provides service to an existing power plant and refinery Project Scope:
Customers:
Project Status:
July 3, 2017
Facilities:
Bayway Lateral
City of LINDEN Texas Eastern
NJ
STATEN ISLAND
Bayway Refinery Bayway Lateral
NY
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Lambertville East
ALGONQUIN
HANOVER LINDEN LAMBERTVILLE
TEXAS EASTERN
PA NY NJ
60 MDth
LONG ISLAND MANHATTAN
Purpose: Low-risk, organic investment driven by compliance requirements and underpinned by long-term contracts that will provide needed capacity for two existing utility customers Project Scope:
with an added capacity of 60,000 DTH/d
Project Status:
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NEXUS
Purpose:
To serve local distribution companies, power generators and industrial users in Ohio, Michigan, Chicago & Ontario markets
Project Scope:
interconnect with the DTE Gas transportation system at Willow Run, Michigan
Customers:
CNX Gas, Noble Energy, Columbia Gas of Ohio
Project Status:
Preliminary Facilities:
Market Connections:
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PennEast
Purpose: Provides a new, direct connection to northeast Pennsylvania production; an opportunity to work with some of our biggest customers and leverage
Project Scope:
1.1 Bcf/d expansion from northeast PA CapEx: SEP’s expected portion $260MM
Project Status:
Filed FERC application Sep 2015 Received FERC certificate Jan 2018 In-service 2H19
Preliminary Facilities:
120 miles of 36” greenfield pipeline 1 new compressor station Interconnections with major interstate and gathering
systems including Texas Eastern and Algonquin in New Jersey
PennEast
Texas Eastern
Transco
PA NJ MD AGT DE
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South Texas Expansion Project (STEP)
Purpose: Provides Texas Eastern transportation service for Gulf Coast markets Project Scope:
Project Status:
Preliminary Facilities:
Vidor Petronila
TX
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Stratton Ridge
Purpose: Provides shippers with a firm transportation service to deliver new incremental production from the growing shale plays to the Gulf Coast Project Scope:
Project Status:
Preliminary Facilities:
installation of two new compressor stations
connect Texas Eastern mainline to Stratton Ridge in lieu of constructing a new 16.2-mile lateral
currently connected to Stratton Ridge
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Texas Eastern Appalachian Lease (TEAL)
Purpose: Provides upstream capacity to deliver Marcellus and Utica supply to NEXUS Gas Transmission Project Scope:
OPEN line to deliver into NEXUS
Project Status:
Preliminary Facilities:
PA OH WV
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Texas-Louisiana Markets
Purpose: Provides firm transportation to power generation and industrial market load along the Texas and Louisiana coasts; and further enhances Texas Eastern as a fully bi-directional pipeline connecting valuable supply basins with long-term valuable market centers Project Scope:
Project Status:
Preliminary Facilities:
Gillis Compressor Station
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