avoiding pipeline bottlenecks - lbcg · avoiding pipeline bottlenecks revealing projects planned...

Connections for America’s Energy

Connections for America’s Energy ™

™

™

™ Connections for America’s Energy Connections for America’s Energy

July 30, 2015

Avoiding Pipeline Bottlenecks Revealing Projects Planned for Transporting Crude when Production Rises

Connections for America’s Energy 2

The statements in this communication regarding future events, occurrences, circumstances, activities, performance, outcomes and results are forward-looking statements. Although these statements reflect the current views, assumptions and expectations of Crestwood Midstream and Crestwood Equity management, the matters addressed herein are subject to numerous risks and uncertainties which could cause actual activities, performance, outcomes and results to differ materially from those indicated. Such forward-looking statements include, but are not limited to, statements about the future financial and operating results, objectives, expectations and intentions and other statements that are not historical facts. Factors that could result in such differences or otherwise materially affect Crestwood Midstream’s or Crestwood Equity’s financial condition, results of operations and cash flows include, without limitation, the risks that the Crestwood Midstream and Crestwood Equity businesses will not be integrated successfully or may take longer than anticipated; the possibility that expected synergies will not be realized, or will not be realized within the expected timeframe; fluctuations in oil, natural gas and NGL prices; the extent and success of drilling efforts, as well as the extent and quality of natural gas volumes produced within proximity of Crestwood Midstream or Crestwood Equity assets; failure or delays by customers in achieving expected production in their natural gas projects; competitive conditions in the industry and their impact on the ability of Crestwood Midstream or Crestwood Equity to connect natural gas supplies to Crestwood Midstream or Crestwood Equity gathering and processing assets or systems; actions or inactions taken or non-performance by third parties, including suppliers, contractors, operators, processors, transporters and customers; the ability of Crestwood Midstream or Crestwood Equity to consummate acquisitions, successfully integrate the acquired businesses, realize any cost savings and other synergies from any acquisition; changes in the availability and cost of capital; operating hazards, natural disasters, weather-related delays, casualty losses and other matters beyond Crestwood Midstream or Crestwood Equity’s control; timely receipt of necessary government approvals and permits, the ability of Crestwood Midstream or Crestwood Equity to control the costs of construction, including costs of materials, labor and right-of-way and other factors that may impact either company’s ability to complete projects within budget and on schedule; the effects of existing and future laws and governmental regulations, including environmental and climate change requirements; the effects of existing and future litigation; and risks related to the substantial indebtedness of either company, as well as other factors disclosed in Crestwood Midstream and Crestwood Equity’s filings with the U.S. Securities and Exchange Commission. You should read filings made by Crestwood Midstream and Crestwood Equity with the U.S. Securities and Exchange Commission, including Annual Reports on Form 10-K for the year ended December 31, 2013, and the most recent Quarterly Reports and Current Reports, for a more extensive list of factors that could affect results.

Forward Looking Statements


Crestwood Company Information

3

Crestwood Midstream Partners LP NYSE Ticker CMLP

Market Capitalization ($MM)(1,2) $2,772

Enterprise Value ($MM)(2) $5,221

Annualized Distribution $1.64

(1)  Market price as of 5/18/2015. (2)  Unit count and balance sheet data as of 3/31/2015.

Crestwood Equity Partners LP NYSE Ticker CEQP

Market Capitalization ($MM)(1,2) $966

Enterprise Value ($MM)(2) $1,349

Annualized Distribution $0.55

Crestwood Leadership

Robert G. Phillips Chairman, President and Chief Executive Officer of Crestwood Equity Partners LP and Crestwood Midstream Partners LP.

Heath Deneke Chief Operating Officer and Head of Pipeline Services Group

Bill Gautreaux Chief Marketing Officer and Head of Supply and Logistics Group

Robert Halpin Senior Vice President and Chief Financial Officer

Brian Freed Senior Vice President of Western US Commercial Operations

Mark Mitchell Senior Vice President of Eastern US Commercial Operations


Diversified US Midstream Portfolio

4

Key Statistics:

•  1.4 Bcf/d transportation

•  2.6+ Bcf/d gathering

•  1,350 miles of pipeline

•  79 Bcf storage

•  481 MMcf/d processing

•  180 MBPD crude oil rail terminalling

•  125 MBPD crude oil gathering

•  294 MBPD nationwide NGL logistics business; 543 trucking units and 1840 Rail Cars

Existing platform in every premier shale play in North America creates significant opportunity for optimization, organic expansion, and strategic M&A


Strategy in Motion: Arrow Midstream in Bakken

5 5

Linking supply with demand through integrated asset footprint

•  Arrow Gathering system:

  Over 450 miles of crude, gas and water gathering pipelines on Forth Berthold Indian Reservation

  Trucking crude from wellhead for flush IP production to Arrow’s CDP

•  Connectivity to three crude oil pipelines with discussions for a minimum of two new connections; access to multiple rail markets

•  Crude storage tank capacity of 200 MBbl/d for both operations and opportunity to capture market differentials

•  Oneok gas processing plant for gas takeaway

•  Arrow took out firm capacity on Tesoro pipeline to provide more market optionality to Arrow customers

•  Through this Tesoro pipeline, markets have access to COLT Hub rail facility via COLT Connector Pipeline

•  Crestwood Crude Marketing formed in 2014 to provide additional market optionality and utilization of Crestwood trucking

•  Arrow CDP essentially a trade hub with multiple marketing options to purchase gathered crude

•  Multiple markets bring optimal netbacks to producers

•  Multiple pipeline outlets for crude and access to multiple rail and refinery markets

Supply Aggregation

Connectivity & Optionality

Integration & Optimization

Market Access

Crude, Gas, and Water Gathering

Multiple Crude Take-Away

Options

Access


How does all of this apply to the Permian Basin, and more particularly, the Delaware Basin?

Permian Basin

  Crestwood believes that the Arrow model is the future model for the Delaware Basin   Gas-to-Oil Ratio ranges 3,000 to 10,000+ cubic feet per barrel

of crude/condensate   Water-to-Oil Ratio ranges from 3-5 barrels of water per barrel

of crude/condensate   Crestwood is currently developing a large scale, three-commodity

infrastructure system in the heart of the Delaware Basin to support this concept   Anchor Shipper contracting is on-going   Dialog with numerous other producers in the area of interest.

  Anticipated growth of the basin and the Crestwood assets requires expansion of crude/condensate takeaway capacity to the long haul Permian Basin pipeline grid


Delaware Basin - Wolfcamp


Delaware Basin – Bone Spring


Is it Crude or Condensate?


How Big is the Issue?

Midstream Infrastructure


Long-haul Pipelines


Long Haul Permian Crude Take-Away

12

Overview of Current and Under Construction Pipeline Take-away

*PE II technically originates in Garden City but there will be a tariff from Midland to Colorado City via SunVit and PE II

Connections for America’s Energy Presentation Title 13


Regional Crude Take-Away

14

Overview of Current and Under Construction Pipeline Take-away


Quality Specification Requirements

*Quality spec as shown is expected to become Condensate Friendly as regional DB projects come online

KEYCondensate Friendly

Condensate PenalizedCondensate Not Accepted

Long-haul Pipelines

Regional Pipelines

Quality SpecCurrent Future

Plains Basin Plains Mesa

Plains Sunrise SunVit*

Enterprise Midland to Sealy Not In-serviceMagellan/Plains BridgeTexSunoco West Texas Gulf

Sunoco Permian Express II*Plains Cactus*

Magellan Longhorn

Pipeline

Quality SpecCurrent Future

Plains State-Line Not In-servicePlains Basin Expansion Not In-service

Sunoco Delaware Basin Extension Not In-serviceRangeland RIO System Not In-service

Western Refining Bobcat Not In-serviceFrontier/Concho ACC* Not In-serviceKinder Morgan Wink

Pipeline


Delaware Basin

Midland

Gulf Coast Markets

Condensate Splitter

Export Markets

Path to Export

“The posted price for 60 API Eagle Ford condensate averaged $17.50/BBL below 40 API crude” – RBN Energy


Crestwood DELTA (Delaware Take-Away) Pipeline Map

avoiding pipeline bottlenecks - lbcg · avoiding pipeline bottlenecks revealing projects planned...

Documents