Terminals - Kinder Morgan

Terminals
John Schlosser
President Terminals Group
Terminal Network
Largest Independent Terminal Operator in North America
KM Terminals Segment Facilities
Bulk
Liquids
Transload
82 Terminals
40 Terminals
10 Transload Operations
2
Historical Growth (a)
($ in thousands)
2011
Actual
Earnings before DD&A (excluding APT)
Revenue (net)
Opex
EBITDA
Book Income Tax
Earnings Before DD&A
Sustaining Capital (b)
DCF
Expansion Capital (b,c)
Operating Margin
Growth from prior year (earnings before DD&A)
Internal
Acquisition
2012
Actual
2013
Actual
2014
Budget
701,042
752,303
797,875
969,095
$1,298,507
$598,212
$700,295
($747)
$701,042
$83,187
$617,855
$1,343,294
$587,713
$755,580
$3,277
$752,303
101,420
$650,883
$1,388,319
$576,822
$811,497
$13,621
$797,875
104,654
$693,221
$1,626,278
$624,298
$1,001,980
$32,885
$969,095
$136,747
$832,348
$223,173
$579,994
$817,137
$517,694
53.93%
56.25%
58.45%
61.61%
8.42%
6.05%
2.36%
7.31%
5.83%
1.49%
6.06%
5.52%
0.53%
21.46%
20.30%
1.16%
EBDA
(d)
CAGR
12.53%
__________________________
(a) Before Certain Items
(b) Without corporate overhead
(c) 2014 Budget excludes acquisition capital of $100 MM
(d) 2002-2014 CAGR
Note: Does not include impact of APT / SCT acquisition
3
Contract Diversification
Liquids Revenue Breakout (a)
Bulk Revenue Breakout (a)
(d)
Top-10 Customers (a)
Top-10 Customers
Total Revenue (c)
__________________________
(a) 2014 budget
(b) 2014 budget weighted average, as of 12/31/2013
(c) No customer greater than 6% of revenue
(d) Gasoline & Distillate
$497MM
$1,626MM
4.1-yr Avg. Contract Life (b)
Liquids
4.2 Years
Bulk
4.1 Years
4
Bulk Tonnage
Variance ('14 vs '13)
KMBT Tonnage
(tons)
Actual
2013
Budget
2014
Coal
Ores/Metals (Bulk & Break-Bulk)
33,489,763
24,611,841
42,653,512
25,957,581
9,163,748
1,345,739
27.4%
5.5%
Petcoke
10,808,429
14,377,923
3,569,494
33.0%
Soda Ash
4,585,962
4,678,141
92,180
2.0%
Fertilizers
4,507,304
3,564,717
(942,587)
-20.9%
Salt
3,106,715
3,189,662
82,947
2.7%
Aggregate
3,119,228
3,034,400
(84,828)
-2.7%
Cement (Including Clinker)
Other Bulk
Totals
Amt
%
592,346
703,044
110,698
18.7%
5,123,472
4,559,055
(564,417)
-11.0%
89,945,060
102,718,034
12,772,975
14.2%
Key Take-aways
 Export coal volume expected to increase by 22.7%, or 6.24MM tons, due to new expansion projects coming on-line
 Petcoke volume expected to increase due to a full year of BP Whiting expansion project and increased petcoke handling
at IMT
 Expected decline in Fertilizer volume due to the divestiture of the Tampaplex ammonia business in December 2013
 Expected decline in Other Bulk related to the KMMS CSX lost contract in Q1 2013
5
Liquids Throughput
Variance to Budget
Gasoline
Petroleum Feedstocks
KMLT Throughput
(Bbl)
(a)
Budget
2014
Amt
334,811,713
400,448,520
65,636,807
19.6%
%
46,429,464
219,053,233
172,623,769
371.8%
Distillate
134,720,953
117,123,544
(17,597,409)
-13.1%
Fuel Grade Ethanol / Bio-diesel
64,956,249
65,927,648
971,399
1.5%
Chemical
26,051,704
28,654,624
2,602,920
10.0%
7,413,838
8,468,052
1,054,214
14.2%
202,764
202,608
(156)
-0.1%
4,270,602
5,997,677
1,727,075
40.4%
227,018,617
36.7%
Vegetable Oils
Animal Fats
Other
Totals
KMLT Utilization
Actual
2013
Capacity Utilization Rate
Capacity (MMBbl)
618,857,287
845,875,904
94.5%
68.1
97.5%
72.4
Key Take-aways
 Increase in expected Petroleum Feedstock volume due to BOSTCO, Edmonton and crude by rail expansions
 Increase in expected Gasoline volume due to higher margin blending and export opportunities for our customers,
partially offset by a decrease in distillate blending
 Expected Chemical volume increase due to Galena Park, Harvey expansions, plus a full-year impact of acquisitions
__________________________
(a) Crude, black oil and other feedstocks
6
Major Projects – Backlog
Product
Modeled Capacity
(MMBbl) *
Capital
(MM)
First Full Year
EBITDA
Expected
In Service
Avg. Contract
Length **
Edmonton Tank Expansion Phase I ***
Crude
3.4
$308.7
$34.9
Q4/13 - Q1/14
12
Edmonton Tank Expansion Phase II ***
Crude
1.2
$111.9
$16.8
Q3/14 - Q4/14
12
North 40 Connection (Edmonton, AB) ***
Crude
n/a
$6.9
$1.8
Q2/14
10
Resid/VGO/Distillates
6.2
$253.1
$20.0
Q4/13 - Q2/14
6
ULSD
0.9
$29.8
$3.9
Q3/14
5
Additive
n/a
$10.4
$1.7
Q1/14
5
Crude
0.2
$33.5
$6.6
Q3/13 - Q1/14
5
Refined Petroluem
0.8
$77.5
$9.3
Q4/13 - Q1/14
12
Project Name
BOSTCO Phase 1 (La Porte, TX) (A)
LIQUIDS
BOSTCO Phase 2 (A)
Galena Park Central Plant Rail
Greens Port Crude by Rail (KWX JV; Houston, TX) (B)
Splitter Project Support Infrastructure
Blendstock
1.5
$172.0
$22.2
Q1/16
11
Pony Express (Deeprock JV; Cushing, OK) (C)
Crude
1.5
$26.3
$3.8
Q3/14
5
Alberta Crude Terminal (Keyera JV; Edmonton, AB) (B) ***
Crude
0.1
$32.9
$13.1
Q3/14
5
Chemical
0.8
$60.9
$9.6
Q4/14
9
Crude
0.5
$184.0
$50.6
Q4/14
5
Crude/Products
1.3
$213.5
$66.0
Q4/15 - Q4/16
5
Refined Products
1.2
n/a
$106.2
$31.2
$13.0
$4.4
Q3/14 - Q4/15
Q1/16
10
8
19.6
$1,658.9
$277.9
Product
Modeled Capacity
(MM Tons) *
Capital
(MM)
First Full Year
EBITDA
Deepwater Coal Handling (Deer Park, TX)
Coal
7.0
$174.0
$24.2
Q3/14
10
IMT Phase 3 (Myrtle Grove, LA)
Coal
3.3
$64.7
$9.8
Q2/14
10
Pier IX Yard Expansion (Newport News, VA)
Coal
1.0
$29.3
$5.3
Q2/14
10
Sulfur System Upgrades (Vancouver, BC) ***
Sulfur
1.3
$6.5
$1.6
Q4/14
5
Grain
Copper Ore
0.5
0.2
$6.1
$13.5
$2.2
$3.4
Q1/14
Q2/14
3
6
13.2
$294.1
$46.5
$347.4
$60.5
$2,300.4
$384.9
Houston Export Terminal
Geismar (Methanex Project) and Harvey, LA Chemical Tankage
Edmonton Rail Terminal (Imperial JV) (B) ***
State Class Tankers (D)
Galena Park Tank Project
Greensport Dock Conversion
Refined Products
TOTAL
BULK
Project Name
Grain System Upgrades (Vancouver, BC) ***
Mt. Milligan (Thompson Creek) Copper Gold Mine (Vancouver, BC) ***
TOTAL
ONGOING EARLY-STAGE PROJECTS
TOTAL PROJECT BACKLOG
Future Identified Projects
$250MM - $600MM
Crude/NGL's
Refined Products
Minerals
8
Expected
In Service
Avg. Contract
Length **
10
* Model assumption may differ from total facility capacity
** Initial Term (years); Combined Total figure is weighted average based on Capital
*** C$ / USD exchange rate 1:1
(A) Reflected at KM Ownership Level – 55%
(B) Reflected at KM Ownership Level – 50%
(C) Reflected at KM Ownership Level – 51%
(D) Capital figure reflects remaining capital calls on vessel builds; EBITDA is not pro-rated for capital
7
LIQUIDS
Major Projects – Placed In-Service in 2013
Project Name
Ethanol tank and truck bay (Pasadena, TX)
UAN Handling (Fairless Hills, PA)
Product
Modeled
Capacity
(MMBbl) *
Capital
(MM)
First Full
Year EBITDA
In Service
Avg. Contract
Length **
Ethanol
0.1
$7.9
1 4/7
Q1/13
N/A
UAN
0.1
$6.3
3/4
Q3/13
5
0.2
$14.2
Product
Modeled
Capacity
(MM Tons) *
Capital
(MM)
First Full
Year EBITDA
In Service
Avg. Contract
Length **
TOTAL
BULK
Project Name
Petcoke Handling (Whiting, IN)
Petcoke
2.2
$62.8
11 4/9
Q3/13
10
Port of Houston Export Coal (Deer Park, TX)
Coal
1.2
$51.5
6 4/9
Q4/13
10
IMT Phase 1 (Myrtle Grove, LA) (A)
Coal
4.0
$56.2
8 3/4
Q3/13
15
IMT Phase 2 (A)
Coal
3.0
$31.9
4 3/5
Q1/13
10
Fertilizer Domes (Fairless Hills, PA)
Fertilizer
0.1
$13.6
1 4/9
Q3/13
4
Shiploader Expansion (Portland, OR)
Soda Ash
1.9
$9.5
1 3/7
Q2/13
10
12.4
$225.4
TOTAL
COMBINED TOTAL
* Model assumption may differ from total facility capacity
** Initial Term (years); Combined Total figure is weighted average based on Capital
(A) Reflected at KM Ownership Level – 67%
$239.7
$36.5
10
8
Crude
Canadian Crude Oil
Canadian Oil Production Forecast





Uncertainty Around Pipeline Development Driving Rail Investment
Western Canadian conventional and oil sands supply is increasing, beyond earlier forecasts
Outbound pipeline takeaway capability isn’t keeping pace
Regulatory issues playing a major role
Canadian crude pricing reflects the logistical disconnect
Traditional markets are evolving due to flood of lighter crudes in the U.S. Gulf
= Increased North American demand for petroleum storage and transport
__________________________
Source: CAPP Crude Oil Forecast, Markets & Transportation, June 2013
Morgan Stanley Crude Oil: Long Term Outlook and Supply Deep Dive November 26, 2013
10
KM Terminal Response
Expansion of Rail Take-away Capacity and Merchant Tankage
Rail Terminals
Future Capacity Increases
Edmonton Rail Terminal

50-50 joint venture with Imperial Oil

Base scope accommodates 1-3 unit trains per day, or approximately 100
MBbl/d

Connected via pipe to KM’s Edmonton South terminal

Served by both CN and CP mainlines
Edmonton Rail Terminal Expansion

Incremental capacity as much as 150 MBbl/d
Alberta Rail Terminal Phase 2

Incremental capacity as much as 110 MBbl/d

Possibility of adding a diluent recovery unit
Edmonton Terminal

Future Phases on Edmonton tank development
KM Capital $184 Million
Alberta Rail Terminal




50-50 joint venture with Keyera
Initial phase includes 20 rail car loading spots accommodating approximately
40 MBbl/d
Pipeline connectivity to KM’s Edmonton terminal
Served by both CN and CP
KM Capital $33 million
Tankage
Kinder Morgan’s Edmonton Terminal:

Trans Mountain Operational

North 40 Merchant

Edmonton Merchant Phase 1

Under construction – completion Q1-2014
2.6 MMBbl
2.1 MMBbl
3.4 MMBbl
KM Capital= $308.7 MM


Edmonton Merchant Phase 2
Under construction – completion Q3-2014
1.2 MMBbl
KM Capital = $111.9 MM
9.5 MMBbl (a)
__________________________
(a) Total Edmonton Terminal tankage includes a 220K barrel regulated tank built during Phase I Expansion.
Edmonton Rail Terminal (ERT)
11
U.S. Crude Oil

US crude oil production is projected to hit 9.5
MMBbl/d by 2016 according to the EIA,
approaching the historical record volume of 9.6
MMBbl/d
__________________________
Source: Turner Mason CCOC Conference Presentation, September 2013
(a) Morgan Stanley Crude Oil: Long Term Outlook and Supply Deep Dive November 26, 2013

Increases (a) driven by:
—
—
—
—
Permian (projected to hit 2 MMBbl/d in 2020);
Eagle Ford TX, (1.76 MMBbl/d by 2020);
Bakken growth (1.73 MMBbl/d)
And offsetting declining ANS production
12
U.S. Crude Oil Situation
(a)


Estimated 425K carloads in 2013
The delta between originated and terminated
carloadings will increase as more Canadian
crude enters the US market
__________________________
(a) Turner Mason CCOC Conference Presentation, September 2013

Light crude production will increase out of the
Eagle Ford and Permian, and will saturate the
Gulf Coast with its predominate medium to
heavy refinery base
 Heavy Crude volume will find its way to rail
and water from Alberta as a bridge to pipeline
expansion
13
KM Response
Expansion of Rail Receipt Capacity and Merchant Tankage
Tankage and Connectivity
Deeprock (Cushing, OK)
 Tallgrass Energy obtained FERC approval to convert the Pony
Express Pipeline to crude service - Deeprock Development JV is
the destination
 Project scope increased to nine (six new and three existing) x
250K Bbl tanks and two new pipelines connecting to five Cushing
area destinations
 Throughput capacity to up to 350 MBbl/d
KM JV Terminal – KM Capital $26 million (KM 51%)
Rail Terminals
Greens Port (Houston Ship Channel)
 Crude oil receipt and distribution terminal, Houston Ship Channel
– capable of handling 210 MBbl/d
 Heavy crude handling capability added in bolt-on project
 250 MBbl storage, 105 car handling capability
 Fully built out by March 2014
Richmond, CA
 Converted from ethanol to crude oil in September 2013
 Currently the only 100-car unit train crude oil facility in California
Pecos, TX
 Crude and sand facility relocated in 2013
 Manifest crude service will grow to unit train scale as Permian rail
demand escalates
KWX ND and Canadian JV Terminals
 Three manifest terminals in Canada; one operating unit train
facility in ND
 Combination of crude oil and frac sand
KWX JV terminals – KM Capital $35 million (KM 50%)
Selected Opportunities
 KWX - PNW and Northeast Crude
 Other Ship Channel crude development
 Northeast Shale gas export facility
 Acquisition candidates
Greens Port Rail Terminal (GPRT)
14
KM Response
APT / SCT Tanker Acquisition
Experienced Leadership Team at KM
Rob Kurz
– Joined APT in January 2010 (CEO)
– Over 30 years of experience in maritime industry
Phil Doherty
– Joined APT in September 2010 (CFO)
– Over 10 years of experience in maritime industry
Tim Casey
– Joined KM in 2013
– Previously served as President & CEO of K-Sea Transportation
– Over 30 years of experience in maritime industry
American Petroleum Tankers (“APT”)
– 5 existing medium-range Jones Act qualified
product tankers
– 49,000 DWT per vessel (approx. 330,000 Bbl)
– Average remaining term of approximately 4
years on current/forward charters; approximately
6 years including renewal options
Operations Agreement with Crowley Maritime
– Maritime transportation company founded in
1892
– Services provided include: technical services,
crewing, security, maintenance & repair,
purchasing, insurance, SQE Administration,
regulatory reporting, bookkeeping
Jones Act Trade Routes
Alaskan North Slope
State Class Tankers (“SCT”)
– 4 new-build medium-range Jones Act qualified
product tankers (49,430 DWT per vessel)
– Delivery between 4Q 2015 and 4Q 2016
– Built at General Dynamics’ NASSCO shipyard
(San Diego, CA)
– Upon delivery each vessel will go on time
charter with an initial term of 5 years; 3 x 1-year
renewals
15
KM Response
APT / SCT Tanker Acquisition (Cont’d)

A number of favorable supply and demand factors are currently impacting the Jones Act trade:

—
Significant U.S. shipyard capacity constraints and long-lead delivery schedules
—
Stringent charterer vetting requirements takes supply out of market via vessel retirements
—
Dislocations in crude supply as a result of increased shale oil production has generated new, high-value trade
routes along West and Gulf coasts
—
With advantaged crude supply, PADD 3 refiners should continue to run near (or above) record levels, supporting
increase in PADD 3-to-PADD 1 products trade
Result is a tightly supplied Jones Act tanker market and strong daily time charter rates for foreseeable future
700
PADD 3 to PADD1 Transfers by Tanker & Barge
600
(MBbl/d)
500
400
300
200
100
-
Crude
Gasoline Blendstock
__________________________
Source: EIA; Port of Corpus Christi
Finished Gasoline
Jet
Distillates
16
KM Response
APT / SCT Tanker Acquisition (Cont’d)
Remain. Contract Length (yrs.)
APT
Vessel
Built/
Delivered
Current Charterer/
Forward Charterer
Without
Renewals
With
Renewals
2014
2015
2016
Remaining
Contract Term
Golden State
Jan-09
Major Integrated
2
5
Pelican State
Jun-09
Major Integrated
2
4
Sunshine State
Dec-09
Major Integrated
3
4
Empire State
Oct-10
U.S. Navy/
Major Refiner
7
7
Rem.
Term
Ren.
Term
Evergreen State
Jan-11
U.S. Navy/
Major Refiner
6
10
Rem.
Term
Ren.
Term
4
6
Remaining
Contract Term
2017
2018
2019
2020
2021
2022
2023
2024
Renewal Term(s)
Renewal Term(s)
Remaining
Contract Term
Renewal
Term
Forward Charter -- Initial Term
Forward Charter -- Initial Term
Forward Charter -- Renewal Term
Remain. Contract Length (yrs.)
Built/
Delivered
Current Charterer/
Forward Charterer
Without
Renewals
With
Renewals
SCT-1
4Q 2015
Major Integrated
5
8
SCT-2
2Q 2016
Major Integrated
5
8
SCT-3
4Q 2016
Major Integrated
5
8
SCT-4
3Q 2016
Major Integrated
5
8
5
8
2014
2015
2016
2017
2018
2019
2020
Initial Contract Term
Initial Contract Term
2021
2022
2023
2024
Renewal Term(s)
Renewal Term(s)
SCT
Vessel
__________________________
Note: Remaining Contract Length from 1/1/2014
Initial Contract Term
Initial Contract Term
Renewal Term(s)
Renewal Term(s)
17
Petroleum
Gulf Coast Crude Delivery Capacity

Houston – the bucket at the bottom of the crude cascade
—
—
4.5 MMBbl/d of increased pipeline delivery capacity from 2010 to 2015
Represents roughly 50% of approximately 9.0 MMBbl/d USGC refining capacity
Thousand barrels per day
5,000
26%
4,500
4,000
22%
3,500
3,000
15%
2,500
2,000
37%
1,500
1,000
500
0
Cushing
__________________________
Source: Company disclosures, EIA
Patoka
Permian
Cushing
•
Seaway
•
Keystone
Patoka
•
Trunkline
Permian
•
Longhorn
•
BridgeTex
•
Cactus
•
Permian Express
•
West Texas Gulf
Eagle Ford
•
KMCC
•
Double Eagle
•
Other
Eagle Ford
19

Competitive refining
capacity
—
—
—
Distressed crude
Low natural gas prices
Product export growth
7,000
6,500
5-yr Range
5-yr Average
2012
2013
Dec
Nov
Oct
Sep
Aug
Jul
6,000
Jun
—
—
—
2013 imports have fallen to
less than 4 MMBbl/d
Displaced light imports
Decreasing medium imports
Increasing Jones Act
takeaway
7,500
May
—
8,000
Apr
Increasing domestic crude
8,500
Mar

Recent expansions
7.9 MMBbl/d in 2013
Feb
—
—
9,000
Jan
2013 runs at historical high
Thousand bbl per day

Thousand barrels per day
Gulf Coast Crude Runs
9,000
Heavy Imports
8,000
Medium Imports
Light Imports
Domestic
7,000
6,000
5,000
4,000
3,000
2,000
1,000
2012
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
__________________________
Source: EIA – (Heavy Crude less than 25 °API; Medium Crude 25-to-35 °API
Light Crude greater then 35 °API; 2013 data through September)
1986
0
20
Refined Product Trade Balance

U.S. – Shifted from a net importer to exporter of refined product
Thousand barrels per day
—
—
Gasoline net imports have fallen nearly 1 MMBbl/d
Distillate net exports have grown to 1 MMBbl/d
2,500
2,000
1,500
1,000
500
(500)
(1,000)
(1,500)
(2,000)
Gasoline
__________________________
Source: EIA : (Gasoline includes blendstocks)
Jet
Diesel
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
(2,500)
Other
21
Gasoline Exports

Gulf Coast accounts for 88% of gasoline exports
Africa Asia
5%
4%
600
526
508
506
500
Mexico
45%
Canada
11%
400
(MBbl/d)
Other
Americas
35%
335
300
210
Padd 5
9%
200
Padd 1
1%
Padd 2
2%
100
0
2009
2010
2011
2012
2013
__________________________
Source: EIA – (2013 data through October, Exports include blending components)
Padd 3
88%
22
Distillate Exports

Gulf Coast accounts for 78% of diesel exports
1200
1,095
Europe
35%
Asia Mexico
Canada
2%
10%
2%
1,007
1000
Other
Americas
49%
853
(MBbl/d)
800
654
Africa
2%
587
600
Padd 5
11%
400
Padd 1
11%
200
0
2009
2010
__________________________
Source: EIA – (2013 data through October)
2011
2012
2013
Padd 3
78%
23
KM Response
Executing



BOSTCO
— Phase I – 6.2 MMBbl of black oil
storage plus two high-speed
deep water ship docks, three
barge docks (12 spots) and 24
rail spots - started operations in
4Q13
— Phase II – 900MB of ULSD
tankage under construction and
will be in service 3Q14
Splitter Tankage & Infrastructure
— Expanded to 100 MBbl/d and
beyond
Houston Export Facility
— 1.4 MMBbl plus ship and barge
docks - will be in service 1Q16.
In the Pipeline


Pasadena / Galena Park
Infrastructure
— 10 tanks (1.2 MMBbl) plus barge
dock and rail expansion
($116MM).
New Projects
— BOSTCO Phase III – expansion
includes 3.5 MMBbl plus two
additional ship docks and one
barge dock (4 spots)
— BOSTCO Pipeline - ULSD
pipeline connection from KM
Pasadena Terminal
— KM Watco ship dock ($31M)
— Additional KM Pasadena /
Galena Park tank builds
24
Houston Ship Channel
GREENS PORT
TERMINAL
KINDER MORGAN
SHIP DOCK
GALENA PARK
NORTH PLANT
HOUSTON BULK
TERMINAL
KMCC GALENA PARK
SPLITTER
KMTT
9640 CLINTON
KINDER MORGAN
CRUDE BY RAIL
PASADENA
TERMINAL
DEEPWATER
TERMINAL
GALENA PARK
TERMINAL
DEER PARK
RAIL TERMINAL
KMTT FERRO
OPERATION
BOSTCO TERMINAL
PROPOSED PIPELINE
KINDER MORGAN
EXPORT TERMINAL
VALERO
JEFFERSON STREET
TRUCK RACK
HOUSTON REFINING
LYONDELL
Kinder Morgan is actively managing over $1.5B of growth projects along the Houston Ship Channel
(Tankage increase ‘13 through ‘16)
Houston Ship Channel Total Barrels
__________________________
(a) Does not include BOSTCO Phase III
2013
30.7
2016 (a)
38.7
25
Ethanol
Renewable Fuel Standard (RFS) Revisions
2013 Actual Throughput
(as of November 15 2013)
RFS
Requirement(s)
Actual
Throughput
(MM Gallons)
Market Share
of US Demand
Terminals
2,585.0
19.29%
Products Pipeline
1,623.6
12.12%
Total
4,208.6
31.41%
Kinder Morgan
Business Segment
2013 RFS Standard
(MM Gallons)
2014 RFS Revisions
(MM Gallons)
14
17
Biomass Diesel
1,280
1,280
Advanced Biofuel
2,750
2,200
Corn Ethanol
13,800 (a)
13,000
2014 Forecast Throughput
Total Renewable Fuels
16,550.0
15,210
Kinder Morgan
Business Segment
Cellulosic BioFuel
__________________________
(a) 2013 Corn Ethanol Demand estimated 13,400.0MM Gallons vs. the Mandate Requirement.
Forecast
Throughput
(MM Gallons)
Market Share
of US Demand
Terminals
2,560.2
19.69%
Products Pipeline
1,785.0
13.73%
Total
4,345.2
33.42%
26
Chemical
KM Chemical Network
27 Terminals (a)
10.9MM Bbl Storage Capacity
75+ Products
180+ Customers
Midwest
Upper River
West
• Cahokia, IL
• Muscatine, IA
• St. Louis, MO
•
•
•
•
•
Argo, IL
Chicago, IL
Cincinnati, OH (Queen City)
Cincinnati, OH (River T)
Pittsburgh, PA (Dravosburg)
Northeast
• Carteret, NJ
• Perth Amboy, NJ
• Philadelphia, PA
• Richmond, CA
Mid River
• Blytheville, AR
• Guntersville, AL
• Memphis, TN
Mid Atlantic
• Chesapeake, VA (South Hill)
• Norfolk, VA
Lower River
•
•
•
•
Geismar, LA
Harvey, LA
St. Gabriel, LA
Westwego, LA
Southeast
•
•
•
•
•
Charleston, SC (Shipyard River)
Chester, SC
N. Charleston, SC
Port Sutton, FL
Wilmington, NC
Gulf
Liquid Terminal
__________________________
(a) Includes 2013 Acquisitions: Chester, Chesapeake, Norfolk
• Galena Park, TX
28
U.S. Chemical Industry Renaissance

Lower natural gas prices have resulted in the increased competiveness of the U.S.
chemical industry
— Reversal of industry’s global competitiveness from 2012
— Direct result of higher crude-to-gas ratios
Global Ethylene Capacity Cost Curve
__________________________
Source: American Chemistry Council; LyondellBasell
U.S. NGL Prices versus Brent
29
U.S. Chemical Industry Investment
“Just the 2nd Inning”

Over $70 billion in announced U.S. chemical investment as a direct result of lower
feedstock prices
— Predominantly in the Gulf Coast petrochemicals
— Access to natural gas and NGL feedstock as well as worldwide export markets
Capital Expenditures
Location
__________________________
Source: American Chemistry Council, “Shale Gas, Competitiveness, and New US Chemical Industry Investment: An Analysis Based on Announced Projects”
30
KM Response to the Chemical Market
Develop
Acquire
Develop Existing Portfolio
 Methanex project – leveraging existing Geismar, LA assets to
provide critical marine, rail, and truck access in support of
Methanex’s relocated methanol production plant
 Harvey Tank Expansion – adding tanks at fully-subscribed
Harvey, LA terminal to capitalize on tight lower river chemical
storage market
Acquire & Build New Businesses
 Quality Carriers acquisition – rail and truck chemical terminal in
Chester, SC
 Allied Terminal acquisition – Chesapeake and Norfolk, VA
terminals
 Selectively exploring other chemical storage acquisition
opportunities
Grow
Growth through Diversification
 Actively investigating different ways KM can participate in the
chemical – and petrochemical – processes of our customers: inplant builds, tolling arrangements, etc.
31
Coal
International Coal Markets
Thermal and Metallurgical Coal Market Conditions & Drivers






Global Energy Demand by Fuel (Mtoe) (a)
U.S. remains the second largest seaborne exporter of metallurgical
coal behind Australia
Coal overtakes oil as the worlds most consumed fuel in 2019 and
is estimated to account for more than 40% of the worlds electric
generation by 2035 (a)
China is expected to bring on ~200 GW of power and India is
expected to bring on ~70 GW of power by 2017; 1.1 billion metric
tons in demand
China’s forecast hot metal production by 2022 is estimated to be
814 Mt, or 23% higher than 2012 production levels
India’s forecast hot metal production by 2022 is estimated to be 76
Mt, or 64% higher than 2012 production levels
Europe’s forecast hot metal production by 2022 is estimated to be
98 Mt, or 18% higher than 2012 production levels
Projected U.S. Thermal Coal Exports (c)
Total Seaborne Demand for Met Coal (MMTons) (b)
(MM short tons)
100
80
60
40
20
0
__________________________
(a) Wood Mackenzie Global Horizons Service, Coal to exceed oil by 2020, October 2013
(b) Alpha Natural Resources, European Investor Presentation, December 4, 2013;
(c) EIA Annual Energy Outlook 2014 Early Release
Europe
Asia
Other Americas
33
KM Response:
All new export capacity supported by strong, long-term take-or-pay contracts
$417.6MM of Coal Terminal Expansions & Improvements:

Deepwater and Penn City – Houston, Texas
New Capacity = 12.7 million net tons
Thermal Coal

International Marine Terminal (IMT) – Myrtle Grove, LA
New Capacity = 11.0 million net tons
Thermal Coal

Pier IX Terminal – Newport News, VA
New Capacity = 1.5 million net tons
Metallurgical Coal
Kinder Morgan Coal Export Expansions
Export
KM
Terminal
Investment
Incremental
Capacity
Modeled
Export Volume
2010
Export Name Plate Capacity
2011
2012
2013
2014
Pier IX
IMT - Export Volume (a)
Houston Bulk Terminal
$
$
$
29.30
162.80
51.50
1.5
11.0
2.7
1.0
7.3
1.2
14.5
5.0
0.0
14.5
5.0
2.2
14.5
5.0
2.2
14.5
11.0
2.7
16.0
16.0
2.7
Deepwater
$
174.00
10.0
7.0
0.0
0.0
0.0
0.0
10.0
Total
$
417.6
25.2
16.5
19.5
21.7
21.7
28.2
44.7
2014 Budget assumes 27.5 export tons (b)
2014 Take or Pay equals 24.9 export tons – annualized = 29.1
__________________________
(a) Capital outlay represents KM's net investment in IMT
(b) Includes Fairless
34
Summary Highlights





Expected EBDDA growth in 2014 – 21.46%
Only true national bulk and liquids terminal network
Largest terminal footprint in U.S. and Canada = significant capital investment
opportunities.
Significant growth from opportunities currently under development – $2.3 billion
in project backlog – with an additional $250-600 million of identified future
projects being investigated
— Export distillate and gasoline
— Edmonton tank expansion and take-away capacity development
— Crude by rail terminal development
— Chemical network development -- inside the fence line expansion and greenfield
projects
Continued focus on KMT’s safety performance
— 1.64 TRIR vs. comparable marine cargo handling / other warehouse and storage
industry average of 6.45 (a)
__________________________
(a) Composite of liquids ILTA, port and harbor operations and marine and cargo handling
35