Spectra Energy Partners Roni Cappadonna General Manager, Investor - - PowerPoint PPT Presentation

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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


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Spectra Energy Partners

Roni Cappadonna

General Manager, Investor Relations 713.627.4778 | Roni.Cappadonna@enbridge.com

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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

  • ther purposes. FLI is typically identified by words such as “anticipate”, “expect”, “project”, “estimate”, “forecast”, “plan”, “intend”, “target”, “believe”, “likely” and similar

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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SLIDE 3

Investor Value Proposition

  • Stable. Disciplined. Reliable.

Stable business model

  • Primarily natural gas

pipeline focused

  • Fee-based revenues with

no direct commodity exposure and minimal volume risk

  • Strong investment-grade

customers

Outstanding asset footprint

  • Well-positioned platform

for further demand-pull expansion

  • Track record of successful

project execution

Prudent financial management

  • Commitment to investment

grade balance sheet

  • Ample liquidity
  • Successful IDR elimination

Attractive distribution grow th

  • 41st consecutive quarterly

distribution increase

  • Sustainable growth with

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

  • Unparalleled asset footprint
  • Safe, reliable operations
  • Connecting diverse supply basins with

growing demand markets

  • Stable and predictable cash flow
  • No direct commodity exposure
  • Minimal volume exposure
  • Strong investment-grade customers
  • Track record of successful project execution

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SLIDE 5

Strategic Focus

Maintain

Rock solid base; fully subscribed reservation-based contracts with no direct commodity exposure and minimal volume risk

Execute

~$2.5B of growth projects in execution

Grow

Infrastructure footprint with connections to major demand-pull markets

  • ffers strong advantage

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Sabal Trail – restored ROW

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SLIDE 6

Business Entity Overview

Assets

  • Algonquin Gas Transmission
  • Big Sandy Pipeline
  • Bobcat Gas Storage
  • East Tennessee Natural Gas
  • Market Hub Partners
  • Ozark Gas Transmission
  • Saltville Gas Storage
  • Texas Eastern Transmission
  • Maritimes & Northeast, US (78%)
  • Sabal Trail Transmission (50%)
  • Gulfstream Natural Gas (50%)
  • Southeast Supply Header (50%)
  • Steckman Ridge (50%)

2018e EBITDA

U.S. Transmission Liquids

~$2.3B

Assets

  • Express Pipeline
  • Platte Pipe Line

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U.S. Transmission

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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

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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:

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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

  • 255 miles of greenfield pipe, moving

1.5 Bcf/d of Marcellus gas to markets in Ohio, Michigan and Ontario

  • Provides a diverse, competitive supply
  • f natural gas to markets along the route

Vector Enbridge Gas Distribution & Union Gas Daw n Hub Texas Eastern

Interconnects: LDC Power / Industrial Storage Pipeline Route: NEXUS DTE Gas Vector 12

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U.S. Transmission

  • Our infrastructure footprint with

connections to major markets offers strong advantages for our customers

  • Northeast and New England demand

continues to increase

  • Significant opportunities to serve

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

  • Demand continues to increase
  • Solution needed to bring affordable

gas to the region

Philadelphia Market

  • Market opportunities for industrial

and exports

$1-3B

in opportunities

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ORLANDO TAMPA

Power generation

  • pportunities

NOLA

FL AL GA MS

Southeast Markets

Development opportunities in next 5 years

Continued growth in natural gas fired power generation

Southeast Markets

  • Natural gas power generation
  • Coal-to-gas conversions
  • Increase in Florida demand

$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

  • Epicenter of demand for LNG and

Mexico exports

Exports to Mexico

NOLA MT BELVIEU Mexico

TX LA MS

LNG & Industrial

$2-4B

in opportunities

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Liquids

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Express Platte

Buffalo Hardisty Edgar Casper Guernsey Gurley Cushing Patoka Salisbury Wood River

Express & Platte Pipelines

Express Pipeline – 280 kbpd

  • Hardisty to Casper
  • Uniquely situated pipeline for import of growing

Canadian crude supply

  • Stable, secure fee-for-service revenue
  • Average contract term of 9 years

Platte Pipeline – 170 kbpd

  • Casper to Wood River
  • Enhanced connectivity to provide increased utilization
  • Brings diverse crude supply to the Midwest
  • Mix of producers, refiners, marketers

Potential Commercial Synergies

  • Express-Platte system optimization or expansion
  • Market access to Cushing/USGC
  • Extension to Patoka

Gulf Coast Markets

ETCO

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Finance

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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

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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

8%

BB and Below

(1) Credit Exposure reflected after impact of any credit enhancement

Credit Exposures by Counterparty Rating(1)

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92%

Investment Grade

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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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Secured Projects

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Projects in Execution

SUPPLY PUSH

100% 100% 50/50

DEMAND PULL Note:

  • “Execution” = customer agreements executed; currently in permitting phase and/or in construction
  • JV projects shown with Spectra Energy Partners' expected portion

In-Service Date Counterparties

  • Est. CapEx

(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:

  • ~135 MMcf/d expansion of the Algonquin and Maritimes & Northeast

Pipelines

  • CapEx: $500MM

Customers:

  • Various local distribution companies in New England & Atlantic Canada

Project Status:

  • Pre-filed with FERC Jan 2015
  • Filed FERC application Oct 2015
  • Received FERC certificate Jan 2017
  • Partially in-service Nov 2017 with remaining in 4Q18

Preliminary Facilities:

  • New compressor station near Weymouth, MA
  • Continued take-up and relay of the AGT mainline
  • Compressor station unit upgrades in CT
  • Meter station addition and modifications

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Purpose: Provides service to an existing power plant and refinery Project Scope:

  • Capacity: 300 MMcf/d
  • CapEx: $30MM

Customers:

  • Linden Cogeneration
  • Phillips 66

Project Status:

  • Filed FERC application July 2016
  • Received FERC certificate via delegate order on

July 3, 2017

  • In-service late 4Q17

Facilities:

  • ~ ½ mile of 24-inch lateral in Linden, New Jersey
  • New meter station with dual delivery meters

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:

  • Upgrades to the existing Lambertville Compressor Station

with an added capacity of 60,000 DTH/d

  • CapEx: $45MM

Project Status:

  • Filed FERC application 4Q17
  • Commence construction 1H19
  • In-service 2H19

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NEXUS

Purpose:

To serve local distribution companies, power generators and industrial users in Ohio, Michigan, Chicago & Ontario markets

Project Scope:

  • 1.5 Bcf/d greenfield pipeline starting in northeastern Ohio to an

interconnect with the DTE Gas transportation system at Willow Run, Michigan

  • CapEx: SEP’s expected portion $1.3B

Customers:

  • Union Gas, DTE Gas, Enbridge Gas Distribution, DTE Electric, CEMI,

CNX Gas, Noble Energy, Columbia Gas of Ohio

Project Status:

  • Filed FERC application Nov 2015
  • Received Final EIS Nov 2016
  • Received FERC certificate Aug 2017
  • Under construction
  • In-service 3Q18

Preliminary Facilities:

  • 36-inch diameter, ~250-mile pipeline
  • Multiple compressor stations and meters

Market Connections:

  • 1.75 Bcf/d of market connections across Ohio

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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

  • ur existing assets

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:

  • ~400 MMcf/d expansion from Vidor to Petronila
  • CapEx: $130MM

Project Status:

  • Filed FERC application Dec 2016
  • Received FERC certificate Feb 2018
  • In-service 4Q18

Preliminary Facilities:

  • New compression at 2 stations
  • Station reversal work at Mont Belvieu

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:

  • ~320 MMcf/d
  • CapEx: $200MM

Project Status:

  • Filed FERC application Feb 2017
  • In-service 1H19

Preliminary Facilities:

  • Modification of three mainline compressor stations and

installation of two new compressor stations

  • Brazoria Interconnector Gas Pipeline (“BIG”) acquired to

connect Texas Eastern mainline to Stratton Ridge in lieu of constructing a new 16.2-mile lateral

  • BIG is a 30.5-mile 42” intrastate pipeline with 5 interconnects,

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:

  • 950 MMcf/d expansion of Texas Eastern and reversal of

OPEN line to deliver into NEXUS

  • NEXUS to lease the capacity from Texas Eastern
  • CapEx: $200MM

Project Status:

  • Filed FERC application Nov 2015
  • Received final EIS Nov 2016
  • Received FERC certificate Aug 2017
  • In-service 3Q18

Preliminary Facilities:

  • Reversal of OPEN facilities with addition of 28,200 HP
  • 4.5 miles of looping on Texas Eastern mainline
  • Connection between OPEN and NEXUS

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:

  • Texas Industrial Market Project: 82,500 Dth/d
  • Louisiana Market Project: 75,000 Dth/d
  • CapEx: $20MM

Project Status:

  • Filed FERC application Oct 2017
  • In-service 2H19

Preliminary Facilities:

  • Upgrades to the existing Texas Eastern

Gillis Compressor Station

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