Presentation Title Presentation Subtitle
Crestwood Midstream Partners LP Crestwood Equity Partners LP
Connections for America’s Energy ™
™
Crestwood Midstream Partners LP Crestwood Equity Partners LP
Connections for America’s Energy ™
™
Crestwood Midstream Partners LP Crestwood Equity Partners LP
Connections for America’s Energy ™
™ Connections for America’s Energy ™
™
™
™ Connections for America’s Energy
™
™ Connections for America’s Energy
Crestwood Midstream Partners LP Kirk Blackim - Director G&P Business Development Presentation for DUG Permian Basin Conference May 20, 2014
Connections for America’s Energy ™ ™ ™ ™
Today’s Topics
2
• Company Overview – Corporate Structure
– Mission
– Management Team
– Breadth of Services
• Permian/Delaware Basin – World Class Reserves
– Active Permitting and Drilling
– Need for New Infrastructure
• Crestwood in the Permian – Willow Lake
– Delaware Ranch
– Growth Plan
The Crestwood story
Hart Energy DUG Permian Basin 2014 Conference
Connections for America’s Energy ™ ™ ™ ™
3
The statements in this communication regarding future events, occurrences, circumstances, activities, performance, outcomes and results are
forward-looking statements. Although these statements reflect the current views, assumptions and expectations of Crestwood Midstream and
Crestwood Equity management, the matters addressed herein are subject to numerous risks and uncertainties which could cause actual
activities, performance, outcomes and results to differ materially from those indicated. Such forward-looking statements include, but are not
limited to, statements about the future financial and operating results, objectives, expectations and intentions and other statements that are
not historical facts. Factors that could result in such differences or otherwise materially affect Crestwood Midstream’s or Crestwood Equity’s
financial condition, results of operations and cash flows include, without limitation, the risks that the Crestwood Midstream and Crestwood
Equity businesses will not be integrated successfully or may take longer than anticipated; the possibility that expected synergies will not be
realized, or will not be realized within the expected timeframe; fluctuations in oil, natural gas and NGL prices; the extent and success of
drilling efforts, as well as the extent and quality of natural gas volumes produced within proximity of Crestwood Midstream or Crestwood
Equity assets; failure or delays by customers in achieving expected production in their natural gas projects; competitive conditions in the
industry and their impact on the ability of Crestwood Midstream or Crestwood Equity to connect natural gas supplies to Crestwood Midstream
or Crestwood Equity gathering and processing assets or systems; actions or inactions taken or non-performance by third parties, including
suppliers, contractors, operators, processors, transporters and customers; the ability of Crestwood Midstream or Crestwood Equity to
consummate acquisitions, successfully integrate the acquired businesses, realize any cost savings and other synergies from any acquisition;
changes in the availability and cost of capital; operating hazards, natural disasters, weather-related delays, casualty losses and other matters
beyond Crestwood Midstream or Crestwood Equity’s control; timely receipt of necessary government approvals and permits, the ability of
Crestwood Midstream or Crestwood Equity to control the costs of construction, including costs of materials, labor and right-of-way and other
factors that may impact either company’s ability to complete projects within budget and on schedule; the effects of existing and future laws
and governmental regulations, including environmental and climate change requirements; the effects of existing and future litigation; and risks
related to the substantial indebtedness of either company, as well as other factors disclosed in Crestwood Midstream and Crestwood Equity’s
filings with the U.S. Securities and Exchange Commission. You should read filings made by Crestwood Midstream and Crestwood Equity with
the U.S. Securities and Exchange Commission, including Annual Reports on Form 10-K for the year ended December 31, 2013, and the most
recent Quarterly Reports and Current Reports, for a more extensive list of factors that could affect results.
Forward Looking Statements
3 Hart Energy DUG Permian Basin 2014 Conference
Connections for America’s Energy ™ ™ ™ ™
Crestwood’s Mission
Crestwood connects fundamental energy supply with energy demand across North America through a best-in-class midstream network. Our diversified asset base and integrated services provide flow assurance across the value chain for producers and consumers of natural gas, natural gas liquids and crude oil. Building on our history of strong customer services, operational safety as the top priority and long term value creation for our investors, Crestwood is committed to achieving sustainable growth through expansions and acquisitions which increase our connections to America’s midstream energy infrastructure.
Connections - Create Flow Assurance • Linking supply and demand across midstream value chain • Increased visibility for producers to end users • End-to-end solutions for best path to demand centers • Scale to complete major infrastructure growth projects
Operations - Maximize Value to Customers • Critical midstream infrastructure in premier shale plays and market centers • Comprehensive services, leveraging relationships to link supply with demand • Expertise in gathering, processing, transportation, storage & logistics • Improving customer options through control of product from wellhead to
burner tip
Execution - Deliver on Disciplined Strategy • Best-in-class operations and customer service • Completing infrastructure projects on time, on budget • Optimize the asset portfolio through organic project and acquisition growth • Experienced management and dedicated employees focused on creating
investor value
Integrity - Embody Core Principles • Focus on operational safety as our top priority • Responsible care for environmental compliance and sustainability • Commitment to communities where we operate and our employees live • Valuing relationships with our, customers, employees, vendors and the public
4 Hart Energy DUG Permian Basin 2014 Conference
Connections for America’s Energy ™ ™ ™ ™
Crestwood’s Management Team
Robert G. Phillips Chairman, President and Chief Executive Officer of
Crestwood Equity Partners LP and Crestwood
Midstream Partners LP. Mr. Phillips was previously the President and Chief Executive Officer of Enterprise Products Partners L.P. He has served as Chairman and Chief Executive Officer of GulfTerra Energy Partners, L.P., and he was the Chairman, President and Chief Executive Officer of Eastex Energy, Inc. Mr. Phillips has previously served as a director and a member of the audit committee of Pride International, Inc. and as a director of Enterprise Products Partners L.P. and Enterprise GP Holdings L.P.
Heath Deneke President, Natural Gas business unit of Crestwood
Midstream Partners LP. Mr. Deneke oversees all natural gas gathering, processing, storage and transportation operations and collaborates across the organization to identify and capture organic and greenfield opportunities in the midstream market. Mr. Deneke joined Crestwood in May 2012 following a 17-year career at El Paso Corporation and its predecessor companies. Heath has a bachelor's degree in Mechanical Engineering from Auburn University.
Joel D. Moxley Senior Vice President, Operations Services of
Crestwood Midstream Partners LP. Mr. Moxley has responsibility for Environmental, Safety & Regulatory; Engineering & Optimization; Insurance; Human Resources; and Information Technology. Mr. Moxley previously worked at Crosstex Energy, Enterprise Products Partners, El Paso Corporation, PG&E, Valero and Occidental Petroleum and he is currently Chairman of the Gas Producers Association (GPA). Joel has a bachelor's degree in Chemical Engineering from Rice University.
Bill Gautreaux President, the Liquids & Crude business unit of
Crestwood Midstream Partners LP. Mr. Gautreaux is responsible for all marketing, trading and logistics for NGLs, crude oil as well as the US Salt business. Mr. Gautreaux was a founding partner of Inergy LP prior to the merger with Crestwood in 2013. Mr. Gautreaux brings 28 years of experience in NGL trading and marketing having worked at Dynegy, LPG Services Group and Ferrell Gas North America in positions of increasing responsibility. Bill has a bachelor's degree from William Jewell College.
5 Hart Energy DUG Permian Basin 2014 Conference
Connections for America’s Energy ™ ™ ™ ™
Hart Energy DUG Permian Basin 2014 Conference
Operations Across Midstream Value Chain
6
Supply & Logistics business provides improved netbacks and linking end users with cost-effective supply
Gathering & Processing in Marcellus, Barnett/Woodford, Haynesville, Fayetteville, Granite Wash and Permian producing regions
Integrated crude, gas, processing and water handling system in the Bakken
Gas Storage and Transportation in Gulf Coast and Northeast US regions
6
Connections for America’s Energy ™ ™ ™ ™
7
Diversified US Midstream Asset Position
Northeast – Gathering, Transportation, NGL and Storage Businesses
7 Hart Energy DUG Permian Basin 2014 Conference
Connections for America’s Energy ™ ™ ™ ™
8
Diversified US Midstream Asset Position
Bakken/Niobrara – Crude, Gas, Water Businesses
8 Hart Energy DUG Permian Basin 2014 Conference
Connections for America’s Energy ™ ™ ™ ™
9
Diversified US Midstream Asset Position
Southern – Gathering, Processing, Crude and Water Businesses
9 Hart Energy DUG Permian Basin 2014 Conference
Connections for America’s Energy ™ ™ ™ ™
10
Diversified US Midstream Asset Position
West – Fractionation and NGL Businesses
10 Hart Energy DUG Permian Basin 2014 Conference
Connections for America’s Energy ™ ™ ™ ™
11
Diversified US Midstream Asset Position
Existing platform in every premier shale play in North
11 Hart Energy DUG Permian Basin 2014 Conference
Connections for America’s Energy ™ ™ ™ ™
12
Diversified US Midstream Asset Position
• Natural Gas (1)
– 1.3 Bcfd gas transportation capacity
– >2.1 Bcfd gathering capacity
– >1,260 miles of pipeline
– Eight natural gas processing plants with 600+ MMcfd processing capacity
– ~80 Bcf natural gas storage capacity(2)
(1) Includes announced expansion projects (2) Total storage capacity is expected to be reduced to 58 Bcf following Tres Palacios application filed with FERC on 12/6/13.
• NGL and Crude Oil (1)
– 180,000 bpd crude oil rail terminal facilities
– 125,000 bpd crude oil gathering
– NGL/Crude logistics business including trucks, rail cars, terminals, fractionation, storage and marketing
o 4.6 MMbbls NGL Storage
o 8,000 bpd fractionator
o 520 NGL truck/trailer units
o 1,200+ rail car units with 2 crude unit trains on order in 2015
• Water Gathering (1)
– 150 miles of water gathering lines (40,000 bpd of throughput capacity by 2015)
12 Hart Energy DUG Permian Basin 2014 Conference
Connections for America’s Energy ™ ™ ™ ™
Hart Energy DUG Permian Basin 2014 Conference
Serving Blue Chip Customers
13 13
Connections for America’s Energy ™ ™ ™ ™
Thunder Horse, GoM
Kuparuk River, AK
Wilmington, CA
Midway-Sunset, CA
East Texas Basin
Delaware Basin
Bakken Shale
Prudhoe Bay, AK
Eagle Ford Shale
Spraberry/Wolfcamp
Spraberry / Wolfcamp – World Class Resource
Spraberry/Wolfcamp is the world’s second largest oil field and the largest US oil field. Other stacked
formations in the Midland Basin add additional resource to recoverable estimates.
Cantarell, Mexico
Zuluf, Saudi Arabia
ADCO, UAE
Romashkinskoye, Russia
Shaybah, Saudi Arabia
Samotlorskoye, Russia
Safaniyah, Saudi Arabia
Burgan, Kuwait
Spraberry/Wolfcamp, USA
Ghawar, Saudi Arabia1
Source: Pioneer Natural Resources, Investor Presentations.
(1) Ghawar scaled down for illustrative purposes. Its total recoverable resource is ~157 BBoe.
0 20 40 60
Total Recoverable Resource (BBoe)
2nd Largest
Oil Field
Worldwide
0 20 40 60
Total Recoverable Resource (BBoe)
Largest Oil
Field in the US
14 Hart Energy DUG Permian Basin 2014 Conference
Connections for America’s Energy ™ ™ ™ ™
Permitting by Target
Source: HPDI. All permits since 1/1/2013.
Permitting by Operator
Operator (# Delaware Basin Rigs)
Anadarko (5)
Atlantic (3)
CHK/Shell (6)
Cimarex (7)
Clayton (0)
Concho (11)
Devon (5)
Endeavor (0)
Energen (7)
Jetta (1)
Oxy (7)
BHP (2)
Rosetta (4)
RKI (3)
EOG (1)
Others (50)
Hz Permit
Vt Permit
Hz Rig
Vt Rig
Recent Delaware Permitting Activity
Reservoir
Bone Spring/Avalon (57)
DE Sands (9)
Wolfcamp/Wolfbone (29)
Other (17)
15 Hart Energy DUG Permian Basin 2014 Conference
Connections for America’s Energy ™ ™ ™ ™
Crude Infrastructure Expansion Underway
Source: TPH Research, company filings, Bloomberg.
Existing Takeaway
Projects Now Keeping Pace with Production Increases Crude Build-out Accelerates: Capacity to Gulf Coast / LLS Pricing to triple in 2013
16 Hart Energy DUG Permian Basin 2014 Conference
1,693 1,733
2,283
2,733
YE '13 Current by YE '14 by YE '15
Current Production
~1,700 Mbbl/d
This implies 2 Bcfd of new gas processing capacity will be needed!
Connections for America’s Energy ™ ™ ™ ™
Crestwood NGL and Crude Logistics Business
17 Hart Energy DUG Permian Basin 2014 Conference
• Truck & Rail Car Fleet – 650 trailers and 1,100 rail cars and growing rapidly
• Crestwood is handling over 500,000 Bpd of NGLs and Crude Oil through our facilities and transportation assets
– ~360,000 Bpd of NGLs through NGL facilities, transport assets and supply and logistics business
– ~160,000 Bpd of crude through Bakken’s COLT Hub and Arrow Midstream
• NGL Terminals w/ Combined 5 MMBbls of NGL Storage
• Producer Services – Exclusive NGL marketer for Williams and Total in Marcellus/Utica region
Connections for America’s Energy ™ ™ ™ ™
Crestwood Permian Presence
• Phase I – Converted existing Las Animas system from dry gas to rich gas – Installed 10 MMcfd refrigerated JT skid 8/13
• Phase II - Constructing Willow Lake Gathering & Processing – 20 MMcfd cryogenic plant located at existing Willow Lake/EPNG
interconnect, in-service August 1, 2014
– Acquired Legend’s existing gas gathering system and extending pipelines to connect to existing assets and new production within ~12 miles
– Supported by 100k+ acre AMI
• Phase III - Delaware Ranch Gas Project – Developing a large scale (120+ MMcfd) centralized processing
facility and pipeline system, 200 MMcfd expansion under review
– Target production from Eddy, Lea, Culberson, Reeves, and Loving counties
– In-service date YE 2015
• Phase IV - Other Projects in the Works – Crude trucking, pipeline gathering & transportation
– Water gathering & disposal
TX
NM
18 Hart Energy DUG Permian Basin 2014 Conference
Connections for America’s Energy ™ ™ ™ ™
Phase 1: Speed to Market for Customers
• First meeting in April of 2013, with producer with constrained gas
• Received release from prior midstream provider
• Had agreement in June to build temporary solution
• Mobile Dew Point Control Plant in service on August 10th – 10 MMcfd capacity
– Gas to El Paso Natural Gas
– Liquids purchased by Crestwood at incentive market rate and trucked to market
• Allowed producer to sell crude and proceed with eventual larger development plan
Willow Lake - Phase 1 Refrigerated Dew Point Plant
Refrigeration JT Skid Glycol Dehydration Power Generation Product Storage Gas Meter
Willow Lake - Phase 1 Refrigerated Dew Point Plant
19 Hart Energy DUG Permian Basin 2014 Conference
Connections for America’s Energy ™ ™ ™ ™
Phase 2: Starting on Scale
Purchase Producer Gathering System & add 20 MMcfd of Cryo Capacity
• Long term G&P Agreement with Asset Purchase
– Started negotiations in October; closed in March
• Plant startup scheduled for July 2014
• Total capacity will be 30 MMcfd
• 65 miles of pipeline; 80+ by year end
• Gas to El Paso Natural Gas
• Crestwood NGL fleet utilized to move NGLs to market and achieve highest netback for customers
Willow Lake - Phase 2 Cryogenic Gas Plant Willow Lake - Phase 2 Cryogenic Gas Plant
20 Hart Energy DUG Permian Basin 2014 Conference
Connections for America’s Energy ™ ™ ™ ™
Phase 3: Delaware Ranch – Gas, Crude, Water
Replicate Crestwood’s Arrow-Bakken Business Model to provide full service across the gas, oil and water spectrum
• Gas Gathering – Low pressure gathering from wellhead to CDP’s or
Medium/High pressure gathering from CDP’s
• Gas Processing
– 120 MMCfd Cryogenic Gas Plant with ethane (C2) recovery or rejection and up to 99% propane (C3) recovery
– Expansion of 200 MMcfd under development
– Gas treating available as needed
– NGL takeaway via DCP Sand Hills Pipeline and Crestwood trucks
– Residue takeaway via interconnect with El Paso Natural Gas
21
New Mexico
Texas
BKEP Pecos River
CMLP Delaware Ranch
Hart Energy DUG Permian Basin 2014 Conference
Connections for America’s Energy ™ ™ ™ ™
• Crude Gathering – Via pipeline for larger volume wells, economies of
scale is installed with gas lines
– Via truck to “short-haul” pipeline injection points for smaller volumes
• Developing Crude Oil Pipeline Header
– Optionality is Critical to Long-term Market Success
o Corpus Markets – via Cactus
o Houston Markets – via Longhorn
o Midland/Cushing Markets – via Crane
o El Paso Refinery – via Wink
• Water Gathering and Disposal
– Via pipeline for larger volume wells, economies of scale is installed with gas/oil lines
– Via truck to “short-haul” pipeline injection points for smaller volumes
– Purchase transportation truck/trailer rigs
– Work toward water storage and treating for re-use as market demands
Phase 3: Delaware Ranch – Gas, Crude, Water
Hart Energy DUG Permian Basin 2014 Conference 22
New Mexico
Texas
BKEP Pecos River
CMLP Delaware Ranch
Connections for America’s Energy ™ ™ ™ ™
Hart Energy DUG Permian Basin 2014 Conference
Contacts:
Darrell Bull – Vice President, Gathering & Processing
Business Development (832) 519-2260 [email protected]
Kirk Blackim – Director, Gathering & Processing
Business Development (832) 519-2269 [email protected]
Darrel Hagerman – Vice President, Commercial –
Central Region (832) 519-2208 [email protected] Connect with us at (832) 519-2200 or online at crestwoodlp.com