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el paso 0803ClearyCOGA

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  • 1. Jim Cleary President El Paso Western Pipelines Rockies Pipeline Infrastructure Growth August 3, 2005
  • 2. Cautionary Statement Regarding Forward-looking Statements This presentation includes forward-looking statements and projections, made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The company has made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this presentation, including, without limitation, the successful implementation of the 2003 operational and financial plan; the successful implementation of the settlement related to the western energy crisis; actions by the credit rating agencies; the successful close of financing transactions; our ability to successfully exit the energy trading business; our ability to divest of certain non-core assets; changes in commodity prices for oil, natural gas, and power; general economic and weather conditions in geographic regions or markets served by El Paso Corporation and its affiliates, or where operations of the company and its affiliates are located; the uncertainties associated with governmental regulation; the uncertainties associated with the outcome of governmental investigations; political and currency risks associated with international operations of the company and its affiliates; inability to realize anticipated synergies and cost savings associated with restructurings and divestitures on a timely basis; difficulty in integration of the operations of previously acquired companies, competition, and other factors described in the company's (and its affiliates') Securities and Exchange Commission filings. While the company makes these statements and projections in good faith, neither the company nor its management can guarantee that anticipated future results will be achieved. Reference must be made to those filings for additional important factors that may affect actual results. The company assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by the company, whether as a result of new information, future events, or otherwise. 2
  • 3. El Paso Western Pipelines Big Horn Powder River Wind River Green River Denver-Julesburg Uinta Piceance Anadarko Raton San Juan Permian WIC CIG EPNG Mojave Cheyenne Plains 3
  • 4. Natural Gas Production 7 Projected 6 Intermountain West T rillio n C u b ic F e e t 5 Gulf Coast 4 3 Mid-Continent 2 Southwest 1 Northeast West Coast 0 1990 1995 2000 2005 2010 2015 2020 2025 Source: Energy Information Administration; Released Jan 2005 4
  • 5. Northern Rockies Net Export Supply vs. Capacity MMcf/d 6,000 $2.20 CIG to Mid-Continent Basis 5,000 CIG to Henry Hub Basis $1.70 Pipeline Export Capacity Net Supply for Export 4,000 Capacity Surplus $1.20 3,000 $0.70 2,000 $0.20 1,000 0 -$0.30 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 5
  • 6. Rocky Mountain Supply (Volumes are Wellhead – Measured in MMcfd) 10,000 Big Horn Wind River 9,000 Green River Overthrust 8,000 Powder River Uinta 7,000 Piceance Denver 6,000 5,000 4,000 Forecast by 2010: 3,000 High Case 13,000 2,000 Mid Case 9,500 Low Case 7,200 1,000 0 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 20 20 20 20 1990-2002: Wellhead total data from IHS database 2003: Estimate 6 2004-2010: CIG forecast
  • 7. Rocky Mountain Region Production vs. Local Demand* MMcf/d 9,000 8,000 7,000 6,000 Incremental 1,749 5,000 6,392 MMcf/d of supply used 4,000 4,643 for exports 3,000 2,000 1,000 1674 1712 1,617 1628 1623 1652 1591 0 2003 2004 2005 2006 2007 2008 2009 2010 Rocky Mtn. Production Local Demand Source: El Paso; * Local Demand is CO, UT, WY 7
  • 8. Northern Rockies Export Capacity with Recent Expansions* East Trailblazer 850 KMI 400 Approximately 6.2 Bcf/d 265 CIG* 330 C. Plains** 730 Southern Star 180 650 WBI 265 Total 2,755 West NWP North 650 NWP South 360 850 Kern 2,000 400 TransColorado 435 360 180 Total 3,445 330 730 2,000 435 * Excludes capacity from Raton 8 ** Includes 2005 power-up expansion of 170 MDth/d
  • 9. Cheyenne Basis to Henry Hub versus Export Load Factors Jan 1995 – July 2005 3.50 3.00 Historical Relationship 2.50 Load Factor ~83% HH Hub Basis ~ $0.53 Dollars per MMBtu 2.00 1.50 1.00 0.50 0.00 60.0% 65.0% 70.0% 75.0% 80.0% 85.0% 90.0% 95.0% 100.0% -0.50 Source: El Paso 9
  • 10. Cheyenne to Henry Hub Basis 2.00 Time Period HH - Chy 1999 – Present $0.74 Over 2004 $0.64 Since Chy Plains $0.57 1.50 Forecast $0.54 Dollars per MMBtu 1.00 0.50 0.00 -0.50 Se 4 M4 5 04 05 4 4 5 04 4 05 5 04 4 M5 5 04 4 4 -0 -0 -0 -0 -0 l-0 l-0 -0 0 -0 -0 -0 -0 n- n- n- n- b- b- p- ug pr pr ay ay ov ar ar ct ec Ju Ju Ju Ju Ja Ja Fe Fe A A O M M A N D HH - CHY Source: El Paso 10
  • 11. Rockies Supply vs. Regional Export Capacity MMcf/d 8,000 Cheyenne Plains 170 expansion Cheyenne Plains 7,000 560 expansion Incremental 1,203 of 6,000 Supply Growth 100% LF 90% LF Supply Available for Export 5,000 85% LF Expansion needed: 4,000 Q2, 2006 if 85% LF 3,000 Q2, 2007 if 90% LF Q3, 2011 if 100% LF 2,000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: El Paso 11
  • 12. El Paso Track Record Recent and Future Rockies Expansions Expansion Projects Capacity (Mdth) In Service (Contracted Volumes) Raton Basin Raton Phase I 11 Dec 1994 Campo Lateral 81 Sep 1998 Raton Phase II 120 Sep 2001 Raton Phase III 45 Sep 2002 Raton Phase IV 105 Oct 2005 Power River Medicine Bow 260 Dec 1999 Medicine Bow II 120 Aug 2000 Medicine Bow Loop 655 Dec 2001 Uinta Basin Uinta Lateral 200 Dec 1992 Uinta – Kanda Lateral 300 Aug 2007 Piceance Basin Parachute Creek Lateral 37 Oct 1996 WIC Piceance 350 Dec 2005 Green River WIC – Overthrust 300 Dec 2006 Rockies Export Cheyenne Plains 560 Dec 2004 Cheyenne Plains Expansion 170 Jan 2006 Rockies Access Pipeline 1500 ~ 2008 Expansion Contracted, 12 Future Expansions Recent Expansions Construction Pending
  • 13. Conclusion Gas is precious ► Transportation is cheap ► Connectivity is priceless ► 13
  • 14. Jim Cleary President El Paso Western Pipelines Rockies Pipeline Infrastructure Growth August 3, 2005

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