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TransCanada ANR East Project Non-Binding Open Season
 

TransCanada ANR East Project Non-Binding Open Season

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Information about a new pipeline project from TransCanada that will connect to their existing ANR Pipeline--something they call the ANR East Project. The new project will deliver Marcellus and Utica ...

Information about a new pipeline project from TransCanada that will connect to their existing ANR Pipeline--something they call the ANR East Project. The new project will deliver Marcellus and Utica Shale gas to markets in the Midwest, Gulf Coast and Canada. The non-binding open season runs until July 28. The project, if built, will go online in 3Q17.

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    TransCanada ANR East Project Non-Binding Open Season TransCanada ANR East Project Non-Binding Open Season Document Transcript

    • July 3, 2014 ANR PIPELINE COMPANY ANR EAST PROJECT NON-BINDING OPEN SEASON Due to growing market demand and the continuing development of the Utica and Marcellus Shale Basins, ANR Pipeline Company (“ANR”) is conducting a non-binding open season to solicit interest for its ANR East Project (“Project”). The Project is intended to provide Marcellus and Utica gas supplies with export capacity directly from the supply basin to the Midwest, Gulf Coast, and Dawn, Ontario. The Project would also allow for transportation receipts of Utica Marcellus sourced gas supply at or near Defiance Ohio, a hub of several existing and proposed 3rd party pipelines which offer the necessary capacity to various downstream markets. OPEN SEASON PERIOD This open season shall commence at 11:00 a.m. CT Thursday, July 3, 2014, and close at 5:00 p.m. CT on Monday, July 28, 2014. PROJECT SCOPE ANR proposes to construct a new, large diameter 1440 psig pipeline from Clarington, Ohio through Cadiz and Leesville, Ohio to an interconnection with ANR’s existing system at Defiance, Ohio. As part of the Project, ANR proposes facility enhancements to expand ANR’s existing system capacity from Defiance, Ohio to market locations in ANR’s ML7 and ML3 rate zones. The Project is designed to provide additional export transportation capacity for shippers to move gas supplies from Southeast Ohio or Northwest Ohio (near Defiance), to markets in the U.S. Midwest and Gulf Coast. Based on customer interest, ANR can also provide transportation service to Dawn, Ontario via seamless arrangements with its pipeline affiliates Great Lakes Gas Transmission (“Great Lakes”) and TransCanada Pipeline. ANR East is offering to provide any one of the following transportation options to provide access to a diverse market portfolio: Option A – Receipt of gas at Clarington, Cadiz, and/or Leesville, Ohio with delivery to ANR and others near Defiance, Ohio; or Option B – Receipt of gas by ANR near Defiance, Ohio, with delivery to existing market locations and pipeline interconnections in ANR’s ML7 and/or ML3 rate zones; or Option C – Receipt of gas at Clarington, Cadiz, and/or Leesville, Ohio with delivery to existing market locations and pipeline interconnections in ANR’s ML7 and/or ML3 rate zones. Upon request, ANR will also consider (i) the construction of facilities to receive gas at locations other than Clarington, Cadiz, or Leesville; (ii) new or expanded interconnections with markets and pipelines crossing the ANR existing system row or that of the proposed Project.
    • 2/11 ANR EAST PROJECT ROUTE OPTIONS PROJECT TIMING The targeted in-service date of the Project is the 3rd Quarter of 2017. Upon request, ANR may phase in service for portions of the Project earlier than the 3rd Quarter of 2017 start date, subject to the receipt and timing of any applicable regulatory approvals. PROJECT BENEFITS ANR is well connected to existing markets and provides easy access to multiple liquid pricing hubs. The ANR footprint accesses significant demand growth potential as well as on-system storage market opportunities. Through interconnections on the existing ANR and GLGT systems, the ANR East project provides access to 27 Bcf/d of meter capacity in the Midwest and into Ontario. In addition to Midwest markets ANR’s Southeast Mainline capacity provides access to 6.5 Bcf/d in Louisiana and significant growth opportunities in the Gulf Coast, and additional meter capacity is being developed for deliveries of supply for LNG exports in south Louisiana. ANR’s Southwest Mainline provides access to markets to west and south. 1.15 Bcf/d Lebanon Texas Gas Sandwich ANR Mainline 3 Zone Madisonville, KY to Defiance, OH ANR Mainline 7 Zone North of Defiance, OH and Sandwich, IL MichCon MichCon MichCon
    • 3/11 Market Demand The project provides Utica and Marcellus supplies unparalleled access to existing markets, including:  Multiple liquid pricing hubs including: o Chicago’s ANR Joliet Hub o MichCon o Consumers o Dawn o Lebanon o ANR LA o ANR SW  35+ Electric and Gas Utilities  Significant connections to LDC demand in Michigan, Wisconsin, Illinois, Indiana, and Ohio  Significant gas-fired power generation demand from 40 power plants across the ANR system with nameplate capacity of 17,000+ MW  Access to over 900+ Bcf of storage capacity, including 250 Bcf of ANR on-system storage  Access to off-system storage, including MichCon, Consumers, Bluewater, MGU, Peoples, Panhandle, and Dawn  Growing industrial markets  Multiple LNG export markets in Louisiana and Texas ANR Southwest 0 2000 4000 6000 8000 10000 12000 14000 2014 2017 2020 2023 Midwest Demand - Mmcf/d Industrial Power R&C Storage 0 2000 4000 6000 8000 10000 12000 14000 2014 2017 2020 2023 Louisiana Demand - Mmcf/d LNG Exports Industrial Power R&C Storage 0 2000 4000 6000 8000 10000 12000 14000 2014 2017 2020 2023 Ontario Demand - Mmcf/d Industrial Power R&C Storage
    • 4/11 ANR DELIVERY LOCATIONS For convenience, a partial list of existing interconnecting parties is listed below. ANR will also consider requests for other ML7 and ML3 delivery locations: ML-7 Rate Zone ANR Joliet Hub  Alliance Pipeline  Guardian Pipeline  Northern Border Pipeline  Midwestern  NICOR  NGPL  Northern Indiana Public Service Company(NIPSCO)  Peoples  Vector Pipeline Michigan  MichCon  Consumers Gas Company  Southeastern Michigan Gas Company (SEMCO)  Great Lakes Gas Transmission  ANR Storage Facilities Tie-Line (Defiance to Bridgman)  Consumers Gas Company  Northern Indiana Public Service Company (NIPSCO)  Southeastern Michigan Gas Company (SEMCO) Ohio  Ohio Gas Company  East Ohio Gas Company Indiana  Northern Indiana Public Service Company (NIPSCO) ML-3 Rate Zone Indiana  Northern Indiana Public Service Company (NIPSCO)  Proliance  Texas Eastern Transmission  Texas Gas Transmission
    • 5/11 PROJECT CAPACITY1,2 As currently designed and conceived, the Project provides segment capacity up to the quantities listed below: Option A – Capacity from Supply Area  From Clarington to Leesville 2,000,000 Dth/d  Leesville to Defiance 2,400,000 Dth/d Option B – Defiance Take Away Capacity  Total take away capacity from Defiance 2,900,000 Dth/d  West 2,000,000 Dth/d o Joliet Hub 1,150,000 Dth/d o Dawn, Ontario 350,000 Dth/d o Tie Line Points3 2,000,000 Dth/d o Other ML-7 Points  South 600,000 Dth/d o Texas Gas o Lebanon o Other ML-3 Points  North 300,000 Dth/d o MichCon 300,000 Dth/d FOUNDATION SHIPPER STATUS Any bidder who submits a bid for a minimum daily quantity of 250,000 Dth/day for a minimum term of twenty (20) years shall be deemed a “Foundation Shipper.” Foundation Shippers shall pay the Foundation Shipper Rates (as indicated below) and shall not have their capacity pro-rationed if they execute a precedent agreement on or before July 28, 2014. 1 receipt locations in Option A. 2 If Requested, ANR will consider the inclusion of facilities necessary to expand or access delivery points to other ML7 markets and/or locations along ANR’s SW or SE Mainline systems. 3 Including but not limited to Consumers Gas Company, Northern Indiana public Service Company (NIPSCO), Southeastern Michigan Gas Company (SEMCO), Vector and Trunkline Interconnect.
    • 6/11 INDICATIVE RESERVATION RATES ($/Dth) The following rates will be available for transportation service under ANR’s FTS-1 Rate Schedule. The negotiated rates listed below will be available to Foundation Shippers who are Tier I and Tier II shippers (as defined below) (“Foundation Shipper Rates”). Tier I Foundation Shippers o Creditworthy shippers (as determined by ANR pursuant to the Project precedent agreement or the FTS-1 Service Agreement, as applicable) who agree, in the event of downgrade to non-creditworthy status, to be subject to the credit requirements applicable to Tier I non-creditworthy shippers below. o Non-creditworthy shippers (as determined by ANR pursuant to the Project precedent agreement or the FTS-1 Service Agreement, as applicable) who either provide a guarantee from a creditworthy guarantor for shipper’s contractual obligation of reservation charges for the contract term, or who post collateral in the amount of their pro-rata share of the Project costs. Tier II Foundation Shippers o Creditworthy shippers (as determined by ANR pursuant to the Project precedent agreement or the FTS-1 Service Agreement, as applicable) who agree, in the event of downgrade to non-creditworthy status, to be subject to the credit requirements applicable to Tier II non-creditworthy shippers below. o Non-creditworthy shippers (as determined by ANR pursuant to the Project precedent agreement or the FTS-1 Service Agreement, as applicable) who either provide a guarantee from a creditworthy guarantor for shipper’s contractual obligation of reservation charges for the contract term or who post collateral in an amount equal to 24 months of reservation charges under their FTS-1 Service Agreement.
    • 7/11 INDICATIVE RESERVATION RATES ($/Dth) – (continued) Max Negotiated Rate Recourse Est. ($/Dth) Rate Fuel Tier I Tier II ($/Dth) Use% Option A Clarington to Defiance 0.45 0.50 0.57 0.9 Leesville to Defiance 0.40 0.45 0.48 0.9 Option B4 Defiance to MichCon 0.20 0.20 0.20 1.1 ML-3 Points (Ohio & Indiana) 0.15 0.15 0.15 0.8 Tie Line Points 0.22 0.24 0.34 0.8 Joliet Hub 0.32 0.36 0.52 1.2 Dawn 0.35 0.40 0.69 1.7 Option C4 Leesville to MichCon 0.43 0.47 0.68 2.0 ML-3 Points (Ohio & Indiana) 0.40 0.45 0.62 1.7 Tie Line Points 0.52 0.57 0.82 1.7 Joliet Hub 0.63 0.69 1.00 2.1 Dawn 0.69 0.73 1.17 2.6 Clarington to MichCon 0.48 0.53 0.77 2.0 ML-3 Points (Ohio & Indiana) 0.45 0.50 0.71 1.7 Tie Line Points 0.58 0.64 0.91 1.7 Joliet Hub 0.68 0.76 1.09 2.1 Dawn 0.74 0.82 1.26 2.6 ESTIMATED PROJECT FUEL USE Fuel Rates as shown above are estimated for facilities and services as currently designed and conceived and will ultimately be dependent on the final configuration of the Project scope and design. 4 Negotiated rate shippers receive all secondary deliveries locations east of ANR’s Joliet Hub within ANR’s ML7 Zone at no incremental charge.
    • 8/11 NON-BINDING NATURE OF OPEN SEASON Participation in this Open Season shall be considered non-binding on both the participants and on ANR. The purpose of the Open Season is to allow ANR to evaluate the market interest, economics, and design parameters for the Project to effectively meet the needs of its customers. Based upon the results of the Open Season, ANR will, in its sole discretion, determine whether or not to proceed with the proposed Project, the Project’s scope, the possibility of an expansion of the Project’s scope to accommodate all interested parties, or the reduction in scope, in part or in whole, and whether an additional binding open season is necessary. ANR may, in its sole discretion, determine to proceed with the Project but not hold a binding open season. In such case, ANR would enter into discussions with participants in this Open Season for the purpose of executing precedent agreements. Although this Open Season is non-binding, only those who participate in the Open Season will be guaranteed consideration for service under the Project. ANR may, in its sole discretion, and on a not unduly discriminatory basis, consider requests received after the close of the Open Season, including requests to modify or clarify a party’s initial bid, subject to the requirement that the modification of a bid may not decrease the NPV of such bid. ACKNOWLEDGEMENT OF BIDS ANR will acknowledge receipt of all Non-Binding Bid Forms (“Bids”). A copy of the ANR East Project Non-Binding Open Season Bid Form is attached. ANR reserves the right to reject any Bid that is incomplete, contains or reflects modifications to the terms and/or conditions of this Open Season, conflicts with ANR’s FERC Gas Tariff, or is outside the scope of the Project, as determined by ANR in its sole discretion. If a Bidder desires a modification to the Non-Binding Bid(s) Form to address a special or unique situation, ANR encourages the Bidder to present any such modification to ANR for consideration/negotiation as soon as possible in advance of the close of the Open Season. However, ANR shall not be precluded from considering appropriate clarifications or modifications to a Bidder’s Non-Binding Bid Form following the close of the Open Season. This Open Season is subject to all applicable laws, orders, rules, and regulations and authorities having jurisdiction. BID EVALUATION PROCESS ANR’s review of all Non-Binding Bid Form(s) will be performed with reasonable promptness. A net present value (NPV) analysis will be performed on each qualifying Bid. The revenue stream for each Bid will be discounted at an annual discount rate of 3.25% in order to determine its NPV. For purposes of awarding capacity, ANR will consider the combination of shipper bids that result in the highest total NPV for the project.
    • 9/11 PRO-RATIONING OF CAPACITY With the exception of those Foundation Shippers who have executed a precedent agreement prior to the close of this Open Season, all other Bidders shall be subject to capacity pro-rationing. If total non-binding Bid(s) exceed proposed initial and/or expanded Project capacity, and if more than one non-binding Bid has the same NPV, then capacity shall be pro-rated among Bidders with matching NPV Bids such that the highest aggregate NPV is achieved. In the event of a tie, Bidders interested in this capacity should specify a minimum acceptable pro-rata MDQ in their Bid. As an alternative to such a proration, ANR reserves the right to agree to alternate points of delivery. SOLICITATION OF TURNBACK CAPACITY ANR requests that any shipper who currently holds firm transportation capacity along the paths mentioned in this Open Season notify ANR in writing, by the end of this Open Season, if it wishes to turn back its capacity (“Turnback Capacity”). Such notification must specify the contract number, primary receipt and delivery points, and the volume the shipper is offering to turn back. ANR will consider and evaluate offers of Turnback Capacity which satisfy services similar to those proposed herein in terms of location, term, and price. CREDITWORTHINESS If ANR determines to proceed with the proposed Project, prospective Bidders shall be subject to the creditworthiness requirements of the Project precedent agreement when receiving service under the resulting Firm Transportation Agreement. Prospective bidders may contact Rita Homan at (832) 320-5449 if they have any questions relating to creditworthiness. BID PROCESS Interested parties wishing to submit Bids during the Open Season must submit a completed Non- Binding Bid Form (as attached) by mail, by email attachment or by facsimile. All Bids must be received by ANR prior to the close of the Open Season described above. Bids must be mailed, emailed or faxed to: MAIL: ANR PIPELINE COMPANY 717 TEXAS STREET HOUSTON, TX 77002-2761 ATTN: DAN ANDRUCCIOLI – ROOM 25386 ANR BUSINESS DEVELOPMENT E-mail: daniel_andruccioli@transcanada.com Fax: (832) 320-6451 Please contact Daniel Andruccioli at (832) 320-5451 or Erik Anderson at (832) 320-5606 with any questions regarding the ANR East Project Open Season.
    • 10/11 ANR EAST PROJECT NON-BINDING OPEN SEASON BID FORM Send to: ANR Pipeline Company 717 Texas Street Houston, TX 77002 Attn: Mr. Dan Andruccioli Room No. 25386 Via e-mail to daniel_andruccioli@transcanada.com, or via fax, to Dan Andruccioli at (832) 320-6451 no later than 5:00 p.m. CT Monday, July 28, 2014. Note: A separate Bid must be submitted for each transportation path requested. 1. For questions or comments please contact Daniel Andruccioli at (832) 320-5451 or Erik Anderson at (832) 320-5606. 2. Bidder Information: Name: ____________________________ Address: ____________________________ Telephone: ____________________________ Facsimile: ____________________________ 3. Name and title of duly authorized officer: Name: ____________________________ Title: _____________________________ 4. Service Commencement Date Requested: ___________________ Service End Date Requested: ___________________ 5. Type of Service Requested: FTS-1 6. Maximum Daily Quantity Requested: __________ Dth/d 7. Minimum Acceptable Pro-rata Quantity: __________ Dth/d
    • 11/11 ANR EAST PROJECT NON-BINDING OPEN SEASON BID FORM (CONT.) 8. Daily Demand Rate: _____________________/Dth 9. Receipt Point(s): Location MDQ (Dth/day) Clarington __________________________ Leesville __________________________ Defiance __________________________ Other __________________________ 10. Delivery Point(s): Location MDQ (Dth/day) 11. Additional information/comments in support of request: ______________________________________________________________ THIS BID FORM IS HEREBY SUBMITTED: By: __________________________________________________________ Title: ________________________________________________________ Company: ____________________________________________________ Telephone Number: ____________________________________________ Email Address: ________________________________________________ Facsimile Number: _____________________________________________ Date: _________________________________________________________