Investing in essential assets
Accessing the Energy Evolution
Fourth quarter 2019
Advancements in technology create opportunities
• The world is embarking on a significant energy transition
• Technology advancements have increased production of U.S. oil and gas
• Pipelines play an essential role in transporting energy resources to growing areas of demand, including exports to the rest of the world
Liquid-rich gas
NG
L
NGL products
Crude oil
NG
L p
rod
uct
s
Refi
ned
pro
du
cts
Dry gas
Dry gas
Oil field
Refinery
Petrochemical plant
Power plant
Gas processing facility
Fractionator
Gas storage facility
Gas field
Source: Tortoise
Energy value chain
Natural gas
EIA historical Forecast
0
15
30
45
60
75
90
105
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
e
2021
e
2022
e
2023
e
2024
e
Bill
ion
cubi
c fe
et p
er d
ayU.S. producing ample amounts of low-cost, lower carbon energy supply
Crude oil
0
2
4
6
8
10
12
14
16
18
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
e20
21e
2022
e20
23e
2024
e
Mill
ion
barre
ls p
er d
ay
EIA historical Forecast
0
1
2
3
4
5
6
7
8
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
e20
21e
2022
e20
23e
2024
e
Mill
ion
barre
ls p
er d
ay
Natural gas liquids (NGLs)
EIA historical Forecast
U.S. production outlook
Source: EIA and Tortoise estimates as of 12/31/2019. The projections on this page are based on industry estimates and are no guarantee of future outcomes.
Essential assets
Stable recurring revenues
High barriers to entry
Long-lived
Inelastic demand
Monopolistic
Critical assets that fuel the North American and global economies
Generally operated with fee-based, long-term contracts
Capital intensive construction
Economic lives > 50 years
Transports energy commodities used for daily needs
Regulatory oversight
Real asset class fundamentals Operating characteristics
Midstream pipeline attributes
Source: company filings and Tortoise estimates as of 12/31/2019. Note: Total capital investment also includes miscellaneous other projects totaling approximately $34 billion. The projections on this page are based on industry estimates and are no guarantee of future outcomes.
Robust buildout of energy infrastructure required to facilitate exports to the rest of the world
Crude oil Gas Natural gas liquids
Highlighted flows
Infrastructure growth initiatives 2019e - 2021eApproximately $108 billion in pipeline and related projects
Bakken $1.1 billion
Canada $25.2 billion
Rockies/Niobrara $2.0 billion
Mid-Continent $6.2 billion
Gulf Region $12.5 billion
Marcellus/Utica $11.2 billion
Permian/Eagle Ford $16.3 billion
• International Maritime Organization 2020: increases demand for low sulfur light oil with a low residual fuel oil cut
• Shale oil is low in sulfur, easy to refine and contains a higher light-end cut with less “bottom-of-the-barrel” material
Crude oil exports3
After 40 years, U.S.-produced crude oil now exported outside
North America
0
2
4
6
8
10
2015
2020
e
2025
e
2030
e
2035
e
2040
e
Milli
on b
arre
ls p
er d
ay
• Impending wave of LNG project buildouts as countries transition from coal to natural gas and renewables– India’s demand for LNG is
set to increase in its effort to double its share of natural gas in the energy mix by 2030 by deploying more than $140B in committed investments
– South Korea remains a top importer of U.S. LNG and is likely to continue increasing demand
Natural gas exports1
Liquefied natural gas now transported internationally
0
5
10
15
20
25
2015
2020
e
2025
e
2030
e
2035
e
2040
e
Billio
n cu
bic
feet
per
day
U.S. is exporting low-cost, lower carbon energy to the rest of the world
Source: IHS and Wood Mackenzie. 1BP, BTU Analytics, East Daley, EIA and Morgan Stanley as of 12/31/2019. 2EIA, EnVantage, IHS, UBS and Wells Fargo as of 12/31/2019. 3EIA as of 12/31/2019. The projections on this page are based on industry estimates and are no guarantee of future outcomes.
• Exports to high demand regions such as China, India and Europe remain primary outlet for excess inventory
• Current loading dock capacity for LPGs nearly maxed out, incentivizing approximately 900,000 b/d of capacity additions by midstream operators in 2020
NGLs exports2
Ethane used for various consumer products now being
shipped internationally
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2015
2020
e
2025
e
2030
e
2035
e
2040
e
Milli
on b
arre
ls p
er d
ay
For additional information visit www.tortoiseadvisors.com
About Tortoise
Tortoise invests in essential assets – those real assets and services that are indispensable
to the economy and society. With a steady wins approach and a long-term perspective,
Tortoise strives to make a positive impact on clients and communities.
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