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    el paso  PlattsRockiesConference el paso PlattsRockiesConference Presentation Transcript

    • a meaningful company doing meaningful work delivering meaningful results Jim Cleary President, El Paso Western Pipelines Platts Conference, Rockies Gas & Oil April 27, 2007
    • Outline • Overview of Rockies Position in North American Market • Rocky Mountain Production • Pipeline Capacity and Constraints • Current & Future Expansions, Capabilities and Timing 2
    • 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
    • Demand Growth Tilts East and North 5.4 5.5 Western 3.4 Bcf/d 6.6 Eastern Canada 2.7 3.3 7.5 Canada 2.5 3.9 NW and Maritimes 2.7 4.3 2.2% 3.1% Alaska and 2.9 Northeast U.S. 1.5% 2.6% 0.6% 9.1 1.5% 11.6 9.5 10.6 10.9 3.9 4.8 11.3 11.8 6.3 4.5 4.1 11.3 5.7 5.5 4.3 1.8% 2.2% 6.8 -0.1% 0.7% 5.9 4.5 7.2 2.8% 2.7% -0.4% 1.1% 8.7 0.9% 2.3% 9.0 11.4 N.A. Total 13.2 16.6 2000 76.2 13.3 2.8% 3.9% 2000 14.8 2005 72.9 3.8 2005 15.3 2010 84.0 5.0 2010 Mexico 2015 90.5 1.4% -0.6% 5.8 2015 6.6 2005-2015 2000-2015 1.1% 2.2% 2.8% 3.7% CAGR CAGR Source: El Paso 4
    • Supply Growth Tilts West and South Western Bcf/d Canada Alaska Mackenzie 1.2 0.0 17.3 1.2 0.0 17.6 Eastern 0.3 1.2 0.0 17.5 Canada 0.5 1.2 1.0 16.9 0.4 0.2 Rockies 4.8 7.1 Mid- 9.9 Continent 10.6 Shale 5.2 Plays / 4.9 San Juan Carthage 5.1 3.9 5.3 4.8 3.7 7.3 3.5 N.A. LNG Permian 9.7 3.3 Imports 10.7 4.0 0.6 4.1 5.9 1.7 4.3 2000 3.5 4.4 7.3 Gulf of 4.3 2005 4.1 Mexico 4.1 13.6 2010 4.5 3.5 14.0 4.1 2015 9.3 Onshore Gulf 10.0 Mexico 9.1 Source: El Paso 5
    • Rocky Mountain Production (Volumes are Wellhead – Measured in MMcfd) 12,000 Forecast Big Horn Wind River Green River Overthrust 10,000 Powder River Uinta 2.46 Bcf/d of growth 2006-2015 Piceance Denver 8,000 6,000 4,000 Forecast by 2015: High Case 12,873 Mid Case 10,773 2,000 Low Case 8,673 0 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 1990-2005: Wellhead total data from IHS database 2006: Estimate 6 2007-2015: El Paso forecast
    • Northern Rockies Export Capacity with Recent Expansions* Approximately 6.2 Bcf/d 265 East Capacity Trailblazer 850 KMI 400 650 CIG* 330 C. Plains 730 Southern Star 180 WBI 265 3170** West Total 2,755 Capacity NWP North 650 NWP South 360 Kern 2,000 850 TransColorado 435 400 360 Total 3,445 180 330 730 2,000 435 * Excludes capacity from Raton 7 ** West/East X-Over Capacity includes REX West by 2007
    • Rockies Gas Balance MMcf/d Annual Average Wellhead Production Forecast 2001 2002 2003 2004 2005 2006E 2007 2008 2009 2010 Dry Production 5,136 5,615 5,961 6,378 6,773 7,168 7,601 7,964 8,261 8,502 Local Consumption* 1,547 1,575 1,548 1,591 1,637 1,613 1,695 1,612 1,701 1,726 Available for Export 3,589 4,040 4,413 4,787 5,136 5,556 5,906 6,352 6,560 6,776 Total Export Capacity 3,633 3,869 4,738 5,397 6,030 6,200 6,200 8,000 8,000 8,000 Capacity Surplus 43 -171 325 611 894 644 294 1,648 1,440 1,224 % Surplus Capacity 1.2% -4.4% 6.9% 11.3% 14.8% 10.4% 4.7% 20.6% 18.0% 15.3% 8
    • Cheyenne Basis to Henry Hub versus Export Load Factors Jan 1995 – Mar 2007 3.50 3.00 Historical Relationship 2.50 Load Factor ~84% Dollars per MMBtu HH Hub Basis ~ $0.71 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 9 Source: El Paso
    • Rockies Export Pipelines Utilization Rates Jan05-Mar07 120% 100% % Utilization Rate 80% 60% 40% 20% 0% May-05 May-06 Feb-05 Mar-05 Nov-05 Feb-06 Mar-06 Nov-06 Feb-07 Mar-07 Jan-05 Apr-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Dec-05 Jan-06 Apr-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Dec-06 Jan-07 Weighted Average of Rockies Pipelines to the East Weighted Average of Rockies Pipelines to the West Weighted Average of All Rockies Pipelines 10
    • Northern Rockies Basins East & West of Pipeline Divide Pipeline Divide Big Horn Powder River Wind River Overthrust Green River Denver Basin Uinta Piceance Paradox Anadarko Raton San Juan Continental Divide 11
    • Rockies Supply vs. Regional Export Capacity MMcf/d 9,000 CP Midpoint High Case REX West 70 expansion 1800 expansion 8,000 Cheyenne Plains 170 expansion 100% LF Cheyenne Plains 7,000 560 expansion 85% LF 6,000 5,000 Expansion needed: 4,000 2011 if 85% LF Supply Available for Export 2015 if 100% LF Base Case 3,000 2,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 12
    • El Paso Provides Infrastructure Solutions Recent 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 110 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 Piceance Basin Parachute Creek Lateral 37 Oct 1996 WIC Piceance 350 Apr 2006 Green River WIC – Overthrust 300 Jan 2006 Rockies Export Cheyenne Plains 560 Dec 2004 Cheyenne Plains Expansion 170 Jan 2006 Cheyenne Plains Yuma Lateral 50 Dec 2006 3,169 13
    • Western Pipelines Expansion Projects Summary Project Capacity Description Project Cost In-Service WIC Kanda Lateral 400 MDth/d 128 miles of 24” $143 MM January 2008 20,600 Hp (Projected) CP Midpoint Expansion 70 MDth/d 10,300 Hp $20 MM March 2008 (Projected) CIG Raton Basin 2007 29 MDth/d 11 miles of 24”/20” $12 MM December 2007 Expansion (Projected) CIG High Plains Pipeline / 900 MDth/d 164 miles of 30”/24” $296 MM December 2008 / Totem Storage 7 Bcf 9,400 Hp July 2009 (Projected) WIC Medicine Bow Expansion 350 MDth/d 24,300 Hp $32 MM July 2008 (Projected) TOTAL 1,749 MDth/d $503 MM 14
    • Infrastructure Challenges • Rising Steel Cost • Increasing Construction Costs • Permitting Constraints • Environmental Stewardship 15
    • How will infrastructure get built? Cost? Timely? Manpower? $900 2006 $850 2005 $800 2004 $450 2003 $0 $200 $400 $600 $800 $1,000 Steel Plate Price per Net Ton Source: Berg Steel Price (X-70 Plate) 16
    • WIC Piceance Lateral Construction January 2006 17
    • WIC Piceance Lateral Construction January 2006 18
    • Cheyenne Plains Construction Summer 2005 19
    • Conclusion – Key Points • Rockies Potential in North American Market – Key growth area of domestic supply – Surpasses GOM Offshore • Rocky Mountain Production – Increase of 2.5 Bcf/d by 2015 – Expect average YoY production growth to 2030 • Pipeline Capacity and Constraints – Rockies Express 1.8 Bcf/d in service by 2008/2009 – Additional intra/inter Rockies capacity need by 2011-2012 – Expect significant basis impact until REX West in service in 2008 • Current and future expansions, capabilities and timing – Key projects are on the horizon that will provide temporary relief; however, continued Rockies production growth will require additional expansions 20
    • 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, our ability to successfully contract, build and operate the pipeline projects described in this presentation; changes in supply of natural gas; 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; 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. 21