North American Crude CIBC Whistler Institutional Investor Conference - - PowerPoint PPT Presentation

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North American Crude CIBC Whistler Institutional Investor Conference - - PowerPoint PPT Presentation

Providing New Market Access for North American Crude CIBC Whistler Institutional Investor Conference January 24, 2013 Enbridge Inc. Al Monaco President & CEO Legal Notice This presentation includes certain forward looking information


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SLIDE 1

Enbridge Inc. Providing New Market Access for North American Crude

Al Monaco

President & CEO

CIBC Whistler Institutional Investor Conference

January 24, 2013

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SLIDE 2

This presentation includes certain forward looking information (FLI) to provide Enbridge shareholders and potential investors with information about Enbridge and management's assessment of its future plans and operations, which may not be appropriate for other purposes. FLI is typically identified by words such as "anticipate", "expect", "project", "estimate", "forecast", "plan", "intend", "target", "believe" and similar words suggesting future outcomes or statements regarding an outlook. Although we believe that our FLI is reasonable based on the information available today and processes used to prepare it, such statements are not guarantees of future performance and you are cautioned against placing undue reliance on FLI. FLI inherently involves a variety of assumptions, risks, uncertainties and other factors which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied in our FLI. Material assumptions include: expected supply and demand for crude oil, natural gas and natural gas liquids; prices of crude oil, natural gas and natural gas liquids; expected exchange rates; inflation; interest rates; availability and price of labour and pipeline construction materials;

  • perational reliability; customer project approvals; maintenance of support and regulatory approvals for Enbridge’s

projects; anticipated in-service dates and weather. Our FLI is subject to risks and uncertainties pertaining to operating performance, regulatory parameters, project approval and support, construction schedules, weather, economic and competitive conditions, exchange rates, interest rates, commodity prices and supply and demand for commodities, including but not limited to those discussed more extensively in our filings with Canadian and US securities regulators. The impact of any one risk, uncertainty or factor on any particular FLI is not determinable with certainty as these are interdependent and our future course of action depends on management's assessment of all information available at the relevant time. Except to the extent required by law, we assume no obligation to publicly update or revise any FLI, whether as a result of new information, future events or otherwise. All FLI in this presentation is expressly qualified in its entirety by these cautionary statements. This presentation may make reference to certain financial measures, such as adjusted net income, which are not recognized under GAAP. Reconciliations to the most closely related GAAP measures are included in the MD&A filings and/or Supplementary Financial Information available on our website or in the slides that accompany this presentation, if applicable.

Legal Notice

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SLIDE 3

Toronto Quebec City

$45 Billion Energy Infrastructure Asset Base

Gas Distribution

Norman Wells Zama Fort McMurray Portland Casper Montreal Salt Lake City Patoka Cushing Houston Superior Clearbrook Edmonton Hardisty Toronto Chicago

Liquids Pipelines

Edmonton Fort St. John Houston Chicago Sarnia

Gas Pipelines

Toronto Edmonton

Renewable Energy

2011 Adjusted Earnings 65% 16% 17% 2011 Adjusted Earnings 2011 Adjusted Earnings 2011 Adjusted Earnings 2% 62% 19% 17%

Wind Power Generation Waste Heat Recovery Solar Power Generation Geothermal Power Generation Power Transmission

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SLIDE 4

Management’s Key Priorities

  • 1. Focus on Operations
  • Safety, Reliability and Environmental Protection
  • 2. Execute Current Growth Plan
  • Major Projects Execution, Capital Funding and Liquidity
  • 3. Extend Growth Rate Beyond 2016

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SLIDE 5

The Energy Landscape

  • Global Demand Growth
  • US Consumption
  • North American Supply
  • Canadian Supply Captive to

US Market

  • Transportation Bottlenecks

Canadian Canadian Canadian Canadian U.S. U.S. U.S. U.S.

High Shale Forecast High Shale Forecast High Shale Case

Foreign Foreign

Foreign

5 10 15 20 2010 2015 2020 2025

North American Demand by Supply Source

MMbpd

Source: Enbridge Internal Forecast

25 50 75 100 125 1990 1995 2000 2005 2010 2015 2020 2025

Middle East India China Rest of World

Global Crude Oil Demand

MMbpd

Source: EIA, Enbridge Internal Forecast

1 2 3 4 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 CAPP - Forecast WCSB PIRA Energy Group - Forecast Bakken

Forecast Incremental WCSB & Bakken Production Growth

MMbpd

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SLIDE 6

Fundamentals – Landlocked Supply Price Discounts

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$91

WCS Bakken Light Brent Maya

Pricing reflects December 2012 averages (Crude prices are in US$ per bbl)

$106 $55 $110

LLS WTI

$85

Light Crude Heavy Crude

NOTE: * Brent price is a landed price on US East Coast/ US Gulf Coast. Assumed tanker freight cost of US$2.00 per bbl.

Edm Light

$81 $88

Asia Brent

$113

*

$113

*

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SLIDE 7

Competitive Advantage – Footprint of the Mainline System

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Montreal Gretna Regina Hardisty Kerrobert Superior Toledo Buffalo Edmonton Houston Detroit Clearbrook Flanagan

Oil Sands

Cromer Cushing Patoka Sarnia Chicago

Bakken

  • Largest crude oil pipeline

system in the world

  • Competitive Advantage:

– Scale – Market Diversity – Premium Markets – Established ROW – Product Segregation

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SLIDE 8

Competitive Advantage – Dominant Positions in Regional Gathering

Lloydminster Edmonton Cold Lake Hardisty Hub Cheecham Terminal Nexen (Long Lake) Suncor (MacKay River) ConocoPhillips (Surmont) Suncor (Firebag) Alberta Husky (Sunrise) Imperial Oil (Kearl) Waupisoo Pipeline (up to 580 kbpd) Athabasca Pipeline (up to 600 kbpd) Project Connections Athabasca Twin Pipeline (initially 450 kbpd) Cenovus (Christina Lake) Statoil (Leismer) Woodland Pipeline Extension

Total Secured Capital = $3.4 B

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Athabasca Terminal

Gretna

Saskatchewan

Minot Lignite Weyburn

Cromer

Berthold

Steelman Tioga Stanley

Clearbrook North Dakota

Enbridge Mainline System North Dakota System (EEP) Saskatchewan System (ENF) Bakken Expansion Project (EEP/ENF)

Total Secured Capital = $0.8 B Oil Sands Region Bakken Region

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SLIDE 9

New Market Access # 1 – Western U.S. Gulf Coast Access

Cushing Houston Chicago/ Flanagan Port Arthur

3 2 4

Total Secured Capital = $6.4 B

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1

4 1 2 3

Associated Mainline Expansion

  • In-service = Various (2014 – 2015)

Flanagan South Pipeline

  • In-service = mid 2014, +585 kbpd

Seaway Pipeline Acquisition & Reversal

  • In-service = May 2012, +400 kbpd

Seaway Pipeline Twin & Lateral

  • In-service = mid 2014, +450 kbpd
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New Market Access # 2 – Eastern Access

Clearbrook Superior Sarnia Chicago Patoka Toledo Montreal Westover Hardisty Cushing Gretna Regina

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Total Secured Capital = $2.7 B

4 1 5 2 3

Line 5 Expansion

  • In-service = early 2013, +50 kbpd

Spearhead North Expansion

  • In-service = early 2014, +105 kbpd

Line 6B Replacement

  • In-service = early 2014, +260 kbpd

Line 9 Reversal

  • In-service = mid 2013/mid 2014, +240 kbpd

Toledo Pipeline Partial Twin

  • In-service = early 2013, +100 kbpd

1 2 3 5

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New Market Access # 3 – Light Oil Market Access

11 Hardisty Clearbrook Gretna Superior Flanagan Cushing Montreal Sarnia Toledo Patoka

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Total Secured Capital = $6.2 B

Chicago

2 1 3 4 5

1 2 5

Canadian Mainline Terminal Capability

  • In-service = mid 2015/early 2016

Sandpiper Project

  • In-service = early 2016, +225/375 kbpd

U.S. Mainline Expansion

a) Superior to Flanagan

  • In-service = mid 2015/early 2016

b) Chicago Area Connectivity

  • In-service = mid 2015, +570 kbpd

Eastern Access Upsize a) Line 6B Expansion

  • In-service = early 2016, +70 kbpd

b) Line 9 Reversal Expansion

  • In-service = mid 2014, +80 kbpd

Southern Access Extension

  • In-service = early 2015, +300 kbpd
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SLIDE 12

Potential New Market Access Initiatives

12 Canadian/U.S. East Coast Refinery Markets

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Eastern U.S. Gulf Coast Refinery Markets Asia Pacific/West Coast Refinery Markets

Eddystone

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SLIDE 13

Project Returns & Profiles

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Project / Program Enbridge Inc. Investment ($ Billions) First Full Year Full Life DCF ROE Years to Attain

Eastern Access1 $1.9 2014 low double digits 4 USGC Access2 $5.9 2015 low double digits 5 Light Oil Market Access1,2 $2.8 2016 low double digits 4

1 Inclusive of supporting Canadian mainline expansion capital and CTS effects. 2 Inclusive of 60% joint funding of U.S. mainline components and CTS effects.

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Major Projects Execution Status Update

14 As at December 2012

Projects Expected Cost ($ billion) In-service Date Cost Indicator Schedule Indicator COMPLETED IN 2012:

Edmonton Terminal Expansion $0.3 PH1 Q3 2012; PH2 Q4 2012 Below Budget On Time Wood Buffalo Pipeline $0.4 Q4 2012 Below Budget On Time Woodland Pipeline $0.3 Q4 2012 Below Budget On Time Waupisoo Capacity Expansion $0.4 PH1 In-service; PH2 Q3 2013 Below Budget On Time

IN-SERVICE IN 2013:

Liquids Pipelines Athabasca Capacity Expansion $0.5 PH1 Q1 2013; PH2 Q1 2014 Below Budget On Time Bakken Expansion Program $0.6 Q1 2013 Below Budget On Time Berthold Rail $0.1 PH1 In-service; PH2 Q1 2013 On Budget On Time Cushing Terminal Expansion Projects $0.2 2012/2013 (Phases) On Budget On Time Eastern Access Phase 1 $2.0 CAN Q2 2013-Q1 2015; US Q2 2013-Q1 2014 On Budget On Time Eastern Access Toledo Pipeline (Line 79) $0.2 Q2 2013 Below Budget On Time Eddystone Rail $0.1 Q4 2013 On Budget On Time Line 6B Replacement $0.3 Q1 2013 (MI); Q3 2013 (IN) On Budget Delay Norealis Pipeline $0.5 Q4 2013 On Budget On Time Seaway Reversal, Twinning and Lateral $1.2 2012 - 2014 On Budget On Time Suncor Bitumen Blending Tanks $0.2 Q2 2013 Below Budget On Time Natural Gas Ajax Processing Plant $0.2 Q2 2013 On Budget On Time Texas Express NGL Pipeline $0.4 Pipeline Q3 2013; Gathering Q2 2013 On Budget On Time Power MATL $0.4 PH1 Q2 2013; PH2 2014 Over Budget Delay Lac Alfred $0.4 PH1 Q1 2013; PH2 Q3 2013 On Budget On Time Massif du Sud $0.2 Q1 2013 On Budget On Time

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SLIDE 15

$35 Billion Growth Investment Plan

Enbridge Day Current

2012 – 2016 Enterprise Wide Growth Capital

Risked Unsecured Highly Probable Unsecured Commercially Secured

$35 B $35 B

$27 B $18 B $12 B $3 B $5 B $5 B

(Oct 2012)

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SLIDE 16

An Industry Leading Growth Outlook

* Please refer to Non-GAAP Measures disclosure in news release. All figures are based on US GAAP reporting.

$0.00 $3.00

2011 2016e

Adjusted EPS* Growth

  • Tilted Return Projects
  • 2016 Risked Unsecured
  • New Growth Platforms
  • Sponsored Vehicle Drop Downs

Commercially Secured (as at Enbridge Day) Highly Probable Unsecured

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SLIDE 17

Growing Income Stream

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$0.42

$1.26

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Dividends Per Share

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Investment Merits Summary

  • Exceptional array of attractive return investment
  • pportunities
  • Financial risk tightly managed
  • Ample access to low cost conventional funding sources

Attractive investments low cost of capital Industry leading growth Substantial Valuation Upside

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