Infrastructure Growth for the Canadian Energy Sector TD Securities 2014 London Energy Conference Jim V. Bertram, CEO January 13, 2014
Disclaimer The information contained in this presentation (“Presentation”) has been prepared by Keyera Corp. (“Keyera”) and is being delivered for informational purposes and only in relation to shares of Keyera. The Presentation has not been independently verified and the information contained within is subject to updating, completion, revision, verification and further amendment. The Presentation does not purport to contain all information that a prospective investor may require. While the information contained herein has been prepared in good faith, neither Keyera nor its shareholders, directors, managers, agents, employees or advisors give, have given or have authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this Presentation, or any revision thereof, or of any other written or oral information made or to be made available to any person (all such information being referred to as “Information”) and liability therefor is expressly disclaimed. Accordingly, neither Keyera nor any of its shareholders, directors, managers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or implied, contractual, tortuous, statutory or otherwise, in respect of the accuracy or completeness of the Information or for any of the opinions contained herein or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Presentation. In furnishing this Presentation, Keyera does not undertake or agree to any obligation to provide the recipient with access to any additional information or to update this Presentation or to correct any inaccuracies in, or omissions from, this Presentation which may become apparent. This Presentation should not be considered as the giving of investment advice by Keyera or any of its shareholders, directors, managers, agents, employees or advisors. In particular, any estimates or projections or opinions contained herein necessarily involve significant elements of subjective judgment, analysis and assumption and each recipient should satisfy itself in relation to such matters. This Presentation does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to subscribe for or purchase any securities of Keyera, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, or act as any inducement to enter into, any contract or commitment whatsoever with respect to any such securities. The delivery or distribution of this Presentation in or to persons in certain jurisdictions may be restricted by law and persons into whose possession this Presentation comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of the relevant jurisdiction. In particular, this Presentation has not been approved by an authorised person pursuant to Section 21 of the Financial Services and Markets Act 2000 (“FSMA”) of the United Kingdom and accordingly in the United Kingdom it is only being delivered to and directed at persons who fall within paragraphs 19 (investment professionals) and 49 (high net worth companies, unincorporated associations, etc) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005. Any investment or investment activity to which the Presentation relates is available only to such persons or will be engaged in only with such persons, and persons who do not have professional experience in matters relating to investments, and persons of any other description, should not rely or act upon it. This Presentation has not been approved as a prospectus by the UK Financial Services Authority ("FSA") under Section 87A of FSMA and has not been filed with the FSA pursuant to the United Kingdom Prospectus Rules. In addition, neither this Presentation nor any copy of it may be taken or transmitted into the United States of America or Canada or distributed, directly or indirectly, in the United States of America or Canada, or to any resident thereof. Any failure to comply with these restrictions may constitute a violation of applicable U.S. or Canadian securities laws. By accepting this Presentation, the recipient represents and warrants that it is a person to whom this Presentation may be delivered or distributed without a violation of the laws of any relevant jurisdiction. This Presentation must not be copied, published, reproduced or distributed in whole or in part at any time without the prior written consent of Keyera, or used for any other purpose, and any other person who receives this Presentation should not rely or act upon it. Nothing in this disclaimer shall be effective to limit or exclude any liability which by law cannot be limited or excluded. 2
Keyera - One of the Largest Midstream Operators in Canada Canadian Industry Focus Keyera Business Driver • Natural gas producers require Liquids-rich natural significant infrastructure to gas production support growing natural gas activity • Bitumen producers require Oil sands diluent handling and other development logistics services 3 Assuming timely receipt of approvals and no construction delays 2 From 07/15/2003 to 09/30/13 1 From 05/30/03 to 09/30/13 Large Resource Base Driving Infrastructure Expansion Opportunities 3
Keyera (TSX:KEY) – Strong History of Financial Performance 21.9% Total Cumulative Return of $100 Investment Since 2003 $900 Compound annual $800 $700 TSR 1 7.8% $600 $500 $400 $300 $200 CAGR 2 in $100 dividends $900MM per share KEY S&P/TSX Composite Approximate Growth Capital for 2013/2014 3 1 From 05/30/03 to 12/31/13 2 From 07/15/2003 to 12/31/13 3 Assuming timely receipt of approvals and no construction delays Providing Investors with Income and Growth 4
Integrated Business Lines Provide Customers Access to Full Service Offering * Includes intersegment transactions. See Keyera’s Third Quarter 2013 MD&A for a definition of Operating Margin. Opportunities to Add Infrastructure Across Entire Value Chain 5
Gathering and Processing Business Unit • Well maintained, long-life facilities MONTNEY – 2.4 Bcf/d licensed gross capacity – Keyera operates 14 of 15 plants – NGL extraction capability at 95% of plants • Extensive gathering systems DUVERNAY – ~4,000 km of 4” - 12” diameter pipelines – Capture areas create franchise regions • Fee-for-service revenues with negligible direct commodity exposure – Largely flow-through operating costs • Expansion of gas processing and CARDIUM liquids handling capacity, as well as GLAUCONITE addition of gas gathering pipelines, expected Liquids-Rich Development Expected to Drive Facility Expansions 6
Producers active in area • NuVista Simonette – Expanding to Handle New • Paramount • 7 Generations • Sinopec Daylight Gas Production • Harvest • Exxon • CIOC • Opening new capture area northwest of plant in Wapiti / Elmsworth area activity where producers drilling liquids-rich Montney zone • Building two 90-km pipelines; a 12-inch sour gas gathering pipeline and a 6 inch condensate pipeline • Modifying plant to add 100 MMcf/d of processing capacity & improve condensate handling • Pipeline capital cost ~$180 million, including inlet separation; anticipate pipelines on stream by Q2 2014 1 • Plant capital cost estimated at ~$90 million, including condensate stabilization; anticipate plant expansion start up in second half 2014 1 1 Assuming construction schedule is met. New Area Experiencing Significant Liquids-Rich Development 7
Duvernay – Potential World Class Resource • Emerging natural gas resource development east of Simonette • Initial indications are that Duvernay gas contains high levels of condensate and other NGLs • Significant infrastructure required to develop resource Producers active in Simonette/Kaybob area • Exxon – Raw gas processing • Athabasca Oil Corp. • Encana – Condensate stabilization • Trilogy • Chevron • Shell – NGL mix transportation to Fort • ConocoPhillips • Yoho Saskatchewan – Additional NGL fractionation Sources: Peters & Co. Limited ,geoSCOUT. Northern Duvernay Region Requires Significant Infrastructure 8
Southern Duvernay – Significant Infrastructure in Place Today Producers active in the • Keyera is well positioned West Central Area: • Encana. – 10 plants (1.9 bcf/d processing capacity • Shell • Talisman and liquids recovery) • Sinopec Daylight • ConocoPhillips – Extensive gathering systems in place • Vermilion • Enerplus • Bonavista • Existing deep-cut capacity at Rimbey, Gilby, Strachan and Minnehik Buck Lake gas plants • Full fractionation at Rimbey plant for plant and trucked-in NGL mix • Access to Edmonton/ Fort Saskatchewan NGL market via pipeline from Rimbey gas plant • Ethane from Rimbey to Alberta Ethane Gathering System (AEGS) for delivery to Alberta’s petrochemical facilities Sources: Peters & Co. Limited ,geoSCOUT. Can the Duvernay be Accelerated to Take Advantage of Existing Infrastructure? 9
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