Post on 09-Oct-2020
Heartland Update
John Hunszinger, VP Operations
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Forward-Looking Information & Non-GAAP Measures
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In the interests of providing Keyera Corp. (“Keyera” or the “Company”) shareholders and potential investors with information regarding Keyera, including
Management’s assessment of future plans and operations relating to the Company, this document contains certain statements and information that are forward-
looking statements or information within the meaning of applicable securities legislation, and which are collectively referred to herein as “forward-looking
statements". Forward-looking statements in this document include, but are not limited to statements and tables with respect to: capital projects and
expenditures; strategic initiatives; anticipated producer activity and industry trends; and anticipated performance. Readers are cautioned not to place undue
reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their
nature, forward looking statements involve numerous assumptions, as well as known and unknown risks and uncertainties, both general and specific, that
contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur and which may cause Keyera’s actual
performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by
the forward-looking statements. These assumptions, risks and uncertainties include, among other things: Keyera’s ability to successfully implement strategic
initiatives and whether such initiatives yield the expected benefits; future operating results; fluctuations in the supply and demand for natural gas, NGLs, crude
oil and iso-octane; assumptions regarding commodity prices; activities of producers, competitors and others; the weather; assumptions around construction
schedules and costs, including the availability and cost of materials and service providers; fluctuations in currency and interest rates; credit risks; marketing
margins; potential disruption or unexpected technical difficulties in developing new facilities or projects; unexpected cost increases or technical difficulties in
constructing or modifying processing facilities; Keyera’s ability to generate sufficient cash flow from operations to meet its current and future obligations; its
ability to access external sources of debt and equity capital; changes in laws or regulations or the interpretations of such laws or regulations; political and
economic conditions; and other risks and uncertainties described from time to time in the reports and filings made with securities regulatory authorities by
Keyera. Readers are cautioned that the foregoing list of important factors is not exhaustive. The forward-looking statements contained in this document are
made as of the date of this document or the dates specifically referenced herein. All forward-looking statements contained in this document are expressly
qualified by this cautionary statement. This document also includes financial measures that are not determined in accordance with Generally Accepted
Accounting Principles (“GAAP”). For additional information on non-GAAP measures and forward-looking statements, refer to Keyera’s public filings available on
SEDAR at www.sedar.com and available on the Keyera website at www.keyera.com.
About Keyera, an Alberta Based Company
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A leading Canadian midstream company
Operating since 1998
~1,100 permanent employees in Alberta
~240 in Edmonton/Fort Saskatchewan area
TSX common share trading price ~$34.00
Market capitalization: $7.3 billion1
~$5.5 billion invested since 2013
2020 Growth Capital Program: $700-$800 million
1. As at December 31, 2019.
Committed to Responsible Growth
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Prioritizing our people & safety
• Recognized as a 2019 Top Employer in Canada & Alberta
• Targeting zero safety incidents
Improving our environmental performance
• Initiatives to reduce green house gas & methane
emissions
Engaging with our communities• Strong relationships and partnerships with local residents
& Indigenous communities
Fully Integrated Business, Difficult to Replicate
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Western Canada
Sedimentary Basin
Production
iC8
Ethane
C2
Propane
C3
Butane
C4
Condensate
C5+
Iso-octane
iC8
Gathering &
Processing
Liquids
Infrastructure
Marketing
6
Keyera Fort Saskatchewan Complex
Keyera Fort Saskatchewan (KFS)
Fractionators• Frac 1 – 30,000 bbls/d of C3+ fractionation capacity
• Frac 2 – 35,000 bbls/d of C3+ fractionation capacity
2016 Investment of ~$156m
• De-ethanizer – 30,000 bbls/d of C2+ fractionation capacity
2015 Investment of ~$165m
Underground Storage Caverns• Largest underground storage position in WCSB
• ~15 million barrels of storage capacity in high demand
• 4 additional caverns being developed, expected to come in
service over next three years
More Capacity Needed• Fractionators & storage highly utilized
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Edmonton Terminal
Base Line Crude Oil Storage
Terminal
South Cheecham
Rail & Truck TerminalAlberta Crude and Diluent Terminals
Josephburg Rail Terminal
Rail, Truck & Storage Terminals
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Significant Land in Heartland for Future Development
1,290undeveloped acres
in Alberta’s Industrial
Heartland
KFS KJT
166undeveloped
acres
132undeveloped acres
9Source: Keyera internal estimates & company reports.
Wood Mackenzie for oil sands demand and forecast.
Keyera has significant
condensate storage capacity
65-70%Keyera
Peers
Keyera transports >50%
of oil sands demand
2017
bb
ls/d
Pe
rce
nta
ge
of
To
tal D
em
an
d
0%
Oil sands demand
Oil sands forecast
60%
40%
2018 2019 2020 2021 2022
Volume % transported
on Keyera’s system
Leading Condensate Service Provider
0
200,000
400,000
600,000
800,000
80%
100%
20%
Strong Fundamentals Support Continued Growth
Source: CAPP 2019 Bitumen Forecast10
BITUMEN
PRODUCTION GROWING
CONDENSATE
SUPPLY vs DEMAND
2010
0
mb
bl/
d
1,000
2,000
3,000
4,000
2015 2020 2025 2030
Oil Sands Mining
Oil Sands In-Situ
2020
0
mb
bl/
d
200
400
600
800
1,200
WCSB Supply Forecast
Demand Forecast1,000
2025 2030 2035 2040
Condensate
Imports
WCSB
Condensate
Production
Source: Condensate forecast Wood Mackenzie
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Our Industry-Leading Condensate System
KAPS
PEMBINA
NEXUS
COLD
LAKE
SUNCOR
REFINERY
SOUTH GRAND RAPIDS PIPELINE
CANADIAN
DILUENT HUB
CRW
ACCESS
PIPELINE
COCHIN
ADT
KFS
KET
PEMBINA
PLAINS
CRW, GIBSON,
TRANSMOUNTAIN
FORT
SASKATCHEWAN
PIPELINE
DOW
RIMBEY
JOSEPHBURG
SOUTHERN LIGHTS
IPL POLARIS
PIPELINE
FORT SASKATCHEWAN
CONDENSATE SYSTEM MANIFOLD NORLITE
NORTHWEST
REDWATER
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Investment Opportunities Continue - $700m to $800m in 2020
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KAPS will Provide Future Opportunities in the Heartland
A L B E R T A
Edmonton
Fort
Saskatchewan
Grande Prairie
Pipestone
Wapiti
KFS
OIL SANDS
MONTNEY
DEEP BASIN
DUVERNAY
SimonetteKAPS
Keyera
SemCAMS
KAPS – Project Overview
• Highly desired pipeline by industry
• Transports condensate & NGLs from
Montney/Duvernay to Fort Saskatchewan
• Two continuous flow pipelines
• 16” condensate & 12” NGL mix
• $1.3B project expected to be in service early 2022
• 50/50 partnership with SemGroup & KKR
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KAPS – Upstream & Downstream Opportunities
MORE VOLUMES PROVIDE FOUNDATION FOR MORE OPPORTUNITIES
UPSTREAM DOWNSTREAM
Simonette, Wapiti,
Pipestone
Fractionation &
Storage
Rail & Truck
Terminals
Condensate
System & AEF
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Our Significant Land Position in the Heartland
1,290undeveloped acres
in Alberta’s Industrial
Heartland
KFS
KAPS
land to build more
frac &
storage
land to develop
1-2 cavernsper year for
next 30yrs
KJT
Keyera holds salt rights
beneath most of this land
Ethane Opportunities
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Supplier to Pet Chems
• Extract C2+ from Montney plants
• Transport C2+ on KAPS
• Provide incremental frac at KFS
C2+
A L B E R T A
Edmonton
Fort Saskatchewan
Fort McMurray
Gas plant
NGL facility
Gas pipeline
NGL pipeline
NGL pipeline under construction
ethaneextraction
Grande
Prairie
solventdemand
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Propane Opportunities
Access Additional Markets
• Connect to new PDH facility
• Meet solvent demand
PDH
Other
Edmonton
Fort Saskatchewan
Grande
Prairie
Fort McMurrayA L B E R T A
Gas plant
NGL facility
Gas pipeline
NGL pipeline
NGL pipeline under construction
Condensate Opportunities
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Upgrade Condensate
• Leverage KAPS C5+ volumes
• Upgrade condensate to benefit
both Keyera & our customers KAPS
C5+quality
Edmonton
Fort Saskatchewan
Grande
Prairie
Fort McMurray
A L B E R T A
Gas plant
NGL facility
Gas pipeline
NGL pipeline
NGL pipeline under construction
C5+lightC5+
heavy
Our Investments Create Jobs & Generate Opportunities
Our capital investments provide
• Significant employment opportunities for Albertans
• Employment and training opportunities focusing on diversity and inclusion
• Significant incremental tax and royalty revenues for Alberta
KAPS represents total additional investment of ~$1.3 billion in Alberta
• Labour ~ $970mm, Materials ~ $310mm, Engineering ~ $20mm
• Benefitting multiple regions in the province
• Offering both short and long-term employment opportunities for Albertans
• Positioned to generate significant incremental revenues for Alberta
Contributing to the Alberta Economy
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Our Community Investment program aims to develop safe, thriving, and vibrant
communities. Our support helps to fund charitable organizations that focus on:
Preference is given to organizations that have been granted a charitable registration number by the CRA
Investing in our Communities
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Proud Supporter of STARS
• Keyera has donated over $750,000 since 2005
Keyera Kares Ride to Conquer Cancer Team
• Team Keyera raised over $100,000 2017 to 2019
Prostate Cancer Canada Step Up Challenge
• Team Keyera raised over $40,000 in 2019
The Stollery Children’s Hospital Foundation
• Keyera committed to an annual donation of $40,000 (four year term)
United Way
• To date, Keyera has raised over $5 million for the United Way.
Peter Lougheed Leadership College at U of A
• Keyera donates $50,000 per year (2019-2021)
Employees Donating their Time
• Over 7,000 volunteer hours in 2019
Keyera Community Giving
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• Keyera’s Indigenous Business Involvement (IBI)
approach builds capacity in Indigenous communities
through:
Indigenous Relations
1 2
43 Recruitment
& Training
Business
OpportunityConsultation
Community
Investment
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• More than 20 Indigenous Communities are engaged
in Keyera’s IBI plan because of the KAPS project.
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• Keyera’s strategy supports a strong, competitive & prosperous Alberta
• We have a strong track record with over 20 years of delivering financial & operational results
• We work with our customers, communities and others in industry to develop safe, reliable, economic
midstream solutions
• Our investment decisions are driven by a strategy of long-term, value driven, sustainable growth
Concluding Comments