rbc capital markets 2013 mlp conference november 21-22, 2013 · ™connections for america’s...

Presentation Title Presentation Subtitle

Crestwood Midstream Partners LP Crestwood Equity Partners LP

Connections for America’s Energy ™

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™ Connections for America’s Energy ™

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™ Connections for America’s Energy

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™ 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

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• 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


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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


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



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.




Operations Across Midstream Value Chain

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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

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Diversified US Midstream Asset Position

Northeast – Gathering, Transportation, NGL and Storage Businesses



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Bakken/Niobrara – Crude, Gas, Water Businesses



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Southern – Gathering, Processing, Crude and Water Businesses



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West – Fractionation and NGL Businesses



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Existing platform in every premier shale play in North



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• 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)




Serving Blue Chip Customers

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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



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)



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


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!


Crestwood NGL and Crude Logistics Business


• 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


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


http://www.dvn.com/

http://www.shell.us/

http://www.dvn.com/


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



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



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

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New Mexico

Texas

BKEP Pecos River

CMLP Delaware Ranch



• 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



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

mailto:[email protected]




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