Energy Transfer LP · NYSE:ET
Energy Transfer LP — Investor Presentation (September 2023)
43 slides from Energy Transfer LP's investor presentation, September 2023
Slide 1: Investor Presentation
Investor Presentation September 2023
Slide 2: Forward-looking Statements / Legal Disclaimer
Forward-looking Statements / Legal Disclaimer Management of Energy Transfer LP (“Energy Transfer” or “ET”) will provide this presentation to analysts and/or investors at meetings to be held throughout September 2023. At the meetings, members of management may make statements about future events, out
Slide 3: What’s New?
What’s New? Operational Financials Strategic Frac 8 went into service in August 2023, Narrowed 2023 Adjusted EBITDA Announced plans to acquire Crestwood bringing ET’s total fractionation capacity at guidance: Equity Partners LP in a $7.1 billion all- Mont Belvieu to over 1.15 MMbbls/d ‒ Expect
Slide 4: Long-Term Capital Allocation Strategy
Long-Term Capital Allocation Strategy Illustrative – Based on $7.5B Distributable Cash Flow • Discretionary cash flow for debt paydown and unit buybacks • $0.5-$1.5B (up to 20%) $0.5-1.5B ~7-20% • Growth capital • (Stated long-term range of $2-3B annual spend; up to 40%) • Distributions to LP common
Slide 5: Energy Transfer – A Truly Unique, Coast-to-Coast Asset Base
Energy Transfer – A Truly Unique, Coast-to-Coast Asset Base Marcus Hook Terminal Mont Belvieu Nederland Terminal Compressor Station Asset Overview Natural Gas Storage Natural Gas Liquids (NGLs) Fractionator Crude Terminals Refined Products Processing Houston Terminal Treating Major Terminals Marcus
Slide 6: Overview of Proposed Crestwood Transaction
Overview of Proposed Crestwood Transaction Overview of Merger Transaction Illustration • Energy Transfer has executed a definitive agreement to acquire Crestwood at an ~$7.1B enterprise value in a 100% all-equity transaction based on a 2.07x exchange ratio Public and Preferred Insiders Units • ET is
Slide 7: Key Crestwood Transaction Highlights
Key Crestwood Transaction Highlights Immediately Accretive to DCF/Unit Upon Closing Credit Neutrality Driven by All-Equity Deal Diversified and Complementary Assets Drive $40MM+ of Annual Operational and Cost Synergies with Future Opportunities for Financial Synergies Long-term (9+ Years) Contracted
Slide 8: Track Record of Efficient Consolidation
Track Record of Efficient Consolidation Closed December 2021 Closed September 2022 Closed May 2023 Announced August 2023(1) Assets complementary to ET’s Assets extended ET’s gas Assets complementary to ET’s Commercial synergy opportunities interstate and intrastate pipeline gathering
Slide 9: Outlook Supported by Strong, Predominantly Fee-based Core Business
Outlook Supported by Strong, Predominantly Fee-based Core Business ET 2023E Adjusted EBITDA $13.1 - $13.4 billion 2022 to 2023 Adjusted EBITDA Drivers 2023E Adjusted EBITDA Breakout + Volume growth on existing assets Commodity Spread1 5-10% + NGL pipeline, fractionation and export activities 0-5% +
Slide 10: Well Balanced Asset Mix Provides Strong Earnings
Well Balanced Asset Mix Provides Strong Earnings Q2 2023 Adjusted EBITDA by Segment¹ Segment Contract Structure Strength Fees from dedicated Significant connectivity from acreage, take-or-pay and Permian, Bakken and Midcon Crude Oil throughput-based basins to U.S. markets, transportation, terminalli
Slide 11: Strong Investment Returns With Shorter Cash Cycle
Strong Investment Returns With Shorter Cash Cycle 2023E Growth Capital: ~$2 billion % of 2023E • Bear high-recovery cryogenic processing plant • New treating capacity in the Haynesville Midstream • Efficiency improvements and emissions reduction projects ~40% • Multiple gathering & processing and co
Slide 12: Growing With Increased Financial Discipline – 2023 A Key Inflection Period
Growing With Increased Financial Discipline – 2023 A Key Inflection Period Legacy ET Organic Growth ET Adjusted EBITDA2 Major growth projects added since 2017 Capital1 • Bakken Pipeline System* • Permian Express 3* 2018 2023E 2017 • Trans Pecos/Comanche Trail • Panther Plant $4.9B $13.1-$13.4B Pipel
Slide 13: Significant Management Ownership – Continued Buying
Significant Management Ownership – Continued Buying Since January 2021, Energy Transfer insiders and independent board members purchased approximately 38.6 million units, totaling $383 million Leadership Support Insider Ownership vs Peers Ownership Breakout 12% • Executive Chairman (Kelcy Warren) -
Slide 14: Permian Basin Processing Expanding to Meet Growing Demand
Permian Basin Processing Expanding to Meet Growing Demand Permian Basin plant inlet volumes remain at or near record highs Permian Basin Footprint Extensive Permian Basin Footprint: • Have significant acreage dedications to ET processing plants in the Permian Basin Permian Bridge Pipeline • Conv
Slide 15: Comprehensive Permian Gas Takeaway Solutions
Comprehensive Permian Gas Takeaway Solutions Flexibility to Provide Natural Gas Delivery to Most Market Hubs Waha Header Permian Natural Gas Takeaway Project Chicago • Energy Transfer’s Waha header connects to more than 10 different natural gas pipelines, as well as to the TPP header¹, which contain
Slide 16: Gulf Run Pipeline
Gulf Run Pipeline Providing An Efficient Gulf Coast Connection Gulf Run Pipeline Unparalleled access to prolific natural gas producing regions in the U.S. Perryville with ability to deliver Haynesville-area gas to Gulf Coast Region Zone 1 (formerly Line CP): ~200-mile, interstate pipeline with a
Slide 17: US Propane and Normal Butane Annual Exports
US Propane and Normal Butane Annual Exports More than 60% of all US propane is currently exported, and ET is bullish that there will be significant growth in international demand for many years to come 2,000,000 1,741,000 1,769,000 1,800,000 1,614,000 1,600,000 1,378,000 1,400,000 1,200,000 1,157,00
Slide 18: NGL & Refined Products Segment - A World Leader in NGL Exports
NGL & Refined Products Segment - A World Leader in NGL Exports ET’s market share of worldwide NGL exports remains at ~20% ET NGL Exports Nederland Terminal 1000 900 800 700 Thousand barrels per day 600 500 400 300 200 100 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Expanding industry leading
Slide 19: NGL & Refined Products Segment – Growing Ethane Export Assets
NGL & Refined Products Segment – Growing Ethane Export Assets Ethane Export Pipeline and Terminal Facilities Orbit JV Orbit Joint Venture with Satellite Petrochemical USA Corp includes an ethane export terminal on the U.S. Gulf Coast which provides ethane to Satellite’s newly-constructed ethane cr
Slide 20: NGL & Refined Products Segment – Pipeline & Fractionation
NGL & Refined Products Segment – Pipeline & Fractionation – Continuing to Expand Leading Asset Base Lone Star Express Expansion Mont Belvieu Fractionation Expansions • 24-inch, 352-mile expansion • Total of 8 fractionators at Mont Belvieu; current capacity over 1.15 million bbls/d • Added incrementa
Slide 21: World-Class Export Capabilities – Uniquely Positioned to Serve Global Demand
World-Class Export Capabilities – Uniquely Positioned to Serve Global Demand Total NGL export capacity is over Houston Terminal Marcus Hook Terminal 1.1 million barrels per day • 330 acres on Houston Ship Channel • 18.2 million barrels of crude and heated product storage • ~850,000 bbls/d of crude e
Slide 22: Lotus Midstream
Lotus Midstream Opportunistic Addition to Permian Pipeline Network Overview On May 2, 2023, Energy Transfer completed the acquisition of Lotus Midstream Operations, LLC for total consideration of $930 million in cash and approximately 44.5 million newly issued common units Integration is going w
Slide 23: Alternative Energy Group – Leveraging asset base and expertise
Alternative Energy Group – Leveraging asset base and expertise to develop projects to reduce environmental footprint Dual Drive Compressors - Established in 2012 Proprietary technology that allows for switching between electric motors and natural gas engines to drive compressors, and offers the in
Slide 24: Corporate Responsibility
Corporate Responsibility Program Highlights Program Accomplishments • Culture of “safety first, safety always” and a commitment to zero-incidents • Established an Alternative Energy Group to explore renewable energy projects • Real-time tracking of EHS incidents focused on leading indicators • ~20%
Slide 25: Appendix
Appendix Gor ENERGY TRANSFER
Slide 26: Crude Oil Segment
Crude Oil Segment ~14,300 miles of crude oil trunk and gathering lines Crude Oil Pipelines ~ 1 million barrels per day of Permian crude oil takeaway capacity Directly connected to 6.8 MMbbls/d (~37%) of domestic refining capacity 1.85 MMbbls/d of ET-owned export capacity on USGC ET owns and op
Slide 27: NGL & Refined Products Segment
NGL & Refined Products Segment Fractionation 8 Mont Belvieu fractionators (over 1.15 MMbpd) 150,000 Bbls/d Frac VIII went into service in August 2023 35 Mbpd Geismar Frac; 30 to 50 Mbpd Marcus Hook C3+ Frac NGL Storage Total NGL storage ~83 million barrels ~58 million barrels of NGL storag
Slide 28: Midstream Segment
Midstream Segment Midstream Highlights Extensive Gathering and Processing Footprint • Assets in most of the major U.S. producing basins PA Continued Volume Growth • Q2 2023 volumes were a record 19.8 million MMbtu/d primarily due to increased throughput in the majority of our operating regions
Slide 29: Interstate Natural Gas Pipeline Segment
Interstate Natural Gas Pipeline Segment Interstate Highlights ET’s interstate pipelines provide: Stability • Approximately 95% of revenue derived from fixed reservation fees Diversity • Access to multiple shale plays, storage facilities and markets Asset Overview Growth Opportunities Transwest
Slide 30: Intrastate Natural Gas Pipeline Segment
Intrastate Natural Gas Pipeline Segment ~ 11,385 miles of intrastate pipelines with ~24 Bcf/d of throughput capacity, Intrastate Highlights and ~88 Bcf/d of working storage capacity Well-positioned to capture additional revenues from anticipated changes in natural gas supply and demand in the next
Slide 31: Crestwood Transaction - Combination Expected To Benefit All Stakeholders
Crestwood Transaction - Combination Expected To Benefit All Stakeholders Through Additional Scale and Integration CEQP’s substantial processing capacity in the Williston and Delaware basins complements ET’s significant downstream fractionation capacity at Mont Belvieu and hydrocarbon export capabi
Slide 32: Diversified U.S. Portfolio of Leading G&P Assets
Diversified U.S. Portfolio of Leading G&P Assets Expanded operating footprint in oil-weighted basins drives competitive scale and growth opportunities Williston Basin Key CEQP Assets Williston Basin • 2.0 Bcf/d gas gathering Major Customers • 1.4 Bcf/d gas processing • 340 MBbls/d crude oil gatherin
Slide 33: Williston Basin Overview
Williston Basin Overview CEQP is a leading midstream operator in the Williston with gas gathering capacity of 818 MMcf/d, crude gathering capacity of 250 MBbls/d, as well as gas processing capacity of 430 MMcf/d, and a diverse mix of well-capitalized producers Overview Williston Basin Asset Map • In
Slide 34: Delaware Basin Overview
Delaware Basin Overview Fully integrated gathering system creates enhanced competitive advantages for CEQP in some of the most active counties in New Mexico and Texas Overview Delaware Basin Asset Map • Assets include multiple wellhead gas gathering systems, 550 MMcf/d of in-service processing capac
Slide 35: Powder River Overview
Powder River Overview CEQP continues to realize commercial success leveraging excess capacity at the Bucking Horse Processing Plant to attract new, high-quality customers Overview Powder River Basin Asset Map • CEQP is the largest well-head service provider in the Power River Basin WY with ~400K acr
Slide 36: Storage & Logistics Overview
Storage & Logistics Overview Integrated infrastructure of NGL marketing, storage, terminal & transportation services supported by crude and gas marketing and the COLT Hub Overview NGL Asset Overview • NGL Logistics: strategically located storage and terminal assets with 10 MMBbls of storage capacity
Slide 37: ET and CEQP Complementary Assets
ET and CEQP Complementary Assets Gather ~19.8 million MMBtu/d of Gather ~1.2 million MMBtu/d of gas and 863,000 Bbls/d of NGLs gas and ~96,000 Bbls/d of NGLs produced produced Transport ~31.4 million MMBtu/d of natural gas via inter and 10 million Bbls NGL storage intrastate pipelines 340 thousand B
Slide 38: Scale and Diversity of Cash Flow Enhances Credit Profile
Scale and Diversity of Cash Flow Enhances Credit Profile Expected accretion and increased free cash flow will further ET’s ability to buy back units and/or increase distribution growth rate Pro forma ET maintains a predominantly fee-based cash flow profile Limited commodity price exposure with
Slide 39: Cash Flow Supported By Balanced Portfolio With High-Quality Customers
Cash Flow Supported By Balanced Portfolio With High-Quality Customers Cash flow supported by primarily fixed fee agreements and top-tier customer base; favorable commodity prices drive upside in PoP contracts Contract & Customer Portfolio Commodity Type Contract Type • G&P assets supported by long-t
Slide 40: Crestwood Transaction Timeline
Crestwood Transaction Timeline August 2023 Q3 and Q4 2023 Q4 2023 Sign Agreement S-4 registration statement (including Transaction close Crestwood proxy statement) declared Announce Transaction effective by the SEC and file definitive Begin drafting S-4 proxy statement with the SEC registr
Slide 41: Non-GAAP Reconciliations
Non-GAAP Reconciliations 41
Slide 42: Non-GAAP Reconciliation
Non-GAAP Reconciliation Energy Transfer LP Reconciliation of Non-GAAP Measures * 2020 2021 2022 2023 Year Full Year Full Year Q1 Q2 Q3 Q4 Full Year Q1 Q2 To Date Net income $ 140 $ 6,687 $ 1,487 $ 1,622 $ 1,322 $ 1,437 $ 5,868 $ 1,447 $ 1,233 $ 2,680 Interest expense, net 2,327 2,267 559 578 577 592
Slide 43: Non-GAAP Reconciliation
Non-GAAP Reconciliation Definitions Adjusted EBITDA and Distributable Cash Flow are non-GAAP financial measures used by industry analysts, investors, lenders and rating agencies to assess the financial performance and the operating results of Energy Transfer's fundamental business activities and sho
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