Liquids Pipelines Infrastructure in North America Opportunities and Challenges


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Ports-to-Plains Energy Summit
Omni Interlocken Resort
Broomfield, CO
April 7, 2011
Alberta has the world’s second largest oil reserves, but new pipelines are needed to move this resource to markets in the U.S. Find out about proposed pipeline projects in the region and what they mean for job creation.

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Liquids Pipelines Infrastructure in North America Opportunities and Challenges

  1. 1. Liquids Pipelines Infrastructure in North AmericaOpportunities and Challenges Ports-To-Plains Energy Summit April 7, 2011 Brad Shamla Vice President, Market Development Enbridge Pipelines Inc.
  2. 2. Forward Looking Statements Certain information provided in this presentation constitutes forward-looking statements. The words "anticipate", "expect", "project" and similar expressions are intended to identify such forward looking statements. Although Enbridge believes that these statements are based on information and assumptions which are current, reasonable and complete, these statements are necessarily subject to a variety of risks and uncertainties pertaining to operating performance, regulatory parameters, economic conditions and commodity prices. You can find a discussion of those risks and uncertainties in our SEC filings. While Enbridge makes these forward- looking statements in good faith, should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary significantly from those expected. Enbridge assumes no obligation to publicly update or revise any forward looking statements made herein or otherwise, whether as a result of new information, future events or otherwise. 2
  3. 3. Agenda • About Enbridge • Growing Bakken Production • Enbridge in the Bakken • Superior Market Access • Contract Storage • Conclusion 3
  4. 4. Enbridge OverviewNorth American Leader in Energy Transportation 4
  5. 5. Enbridge OverviewNorth American Leader in Energy TransportationPlant Status Ownership Size (MW)Cedar Point C 100% 250Kincardine O 100% 190Greenwich C 90% 99Talbot Wind C 90% 99Chin Chute O 33% 30Magrath O 33% 30NRGreen O 50% 20Sarnia Solar O/C 100% 80SunBridge O 50% 11Hybrid Fuel Cell O 100% 2 $2 Billion+ of green energy assets and 810 MW provides a good foundation for future growth 5 5
  6. 6. Opportunities: Oil Sands Lead Canadian ProductionProvides Secure Source of North American Energy Norman Wells Zama Fort McMurray Edmonton Enbridge Hardisty > 70% Seattle Clearbrook Superior Montreal Ottawa Portland Toronto Buffalo Sarnia Casper Toledo Flanagan Chicago Salt Lake City Patoka Wood Cushing River ~ 13% Total US Source: Government of Alberta Imports 1 Average Jan – Dec 2009. Source: Enbridge, Energy Information Administration 2 Includes tanker shipments from Canadian east coast production 6
  7. 7. Western Canadian Sedimentary BasinSupply Forecast 4.0 3.5 3.0 Synthetic Light Synthetic Heavy Million barrels per day 2.5 SynBit 2.0 Dilbit 1.5 1.0 Conventional Light 0.5 Conventional Heavy 0.0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: Enbridge – 2011 forecast 7
  8. 8. Opportunities: Shale Oil Plays Yielding Sustainable EconomicRecovery of Reserves Goldman Sachs estimates North American shale oil potential at over 1.8 million barrels per day 8
  9. 9. Bakken Production & Capacity Forecast *Source: Raymond James January 24, 2011 9
  10. 10. Bakken Regional Infrastructure ExpansionsStatus Update • North Dakota Pipeline Capacity Saskatchewan System (ENFH) (185,000 bpd growing to 210,000 bpd) North Dakota System (EEP) Bakken Expansion Program – Phase 6 (51 kbpd of additional capacity) Enbridge Mainline System – Portal Reversal (25 kbpd of additional Saskatchewan capacity) – Alexander to Beaver Lodge – System Optimization – Berthold Truck Station Weyburn Cromer • Bakken Expansion Program Steelman Lignite – Capacity: 145,000 bpd Gretna Beaver – In-service Jan 1, 2013 Lodge Minot Berthold – Expandable to 325,000 bpd Bakken Reserve Clearbrook North Dakota 10
  11. 11. Bakken Expansion Program Configuration Saskatchewan CANADA Manitoba 1. Beaver Lodge Loop Project Virden 2. Portal Reversal Expansion Project 4 CROMER 3. Bakken Expansion 16” Line Alida 4. Cromer Terminal Facilities Weyburn Steelman Midale 3 EPI Mainline 5. South of the River Initiatives Portal Link Lignite 2 Grenora Kenaston Reserve Beaver Lodge 1 Minot Trenton Stanley Berthold North Dakota Montana Alexander Minnesota 5 CLEARBROOK 11
  12. 12. Preserving Bakken Quality into Enbridge Mainline EPND Common Stream Quality at Clearbrook 1Q 2006 ‐ 1Q 2011   (Sulfur Content ‐‐ Percent)  0.5000  0.4500  0.4000  0.3500  0.3000 % wt. 0.2500  1Q 2011: 0.17% Sulfur 0.2000  0.1500  0.1000  0.0500  0.0000  1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 2Q 2008 3Q 2008 4Q 2008 1Q 2009 2Q 2009 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011 12
  13. 13. Bakken Expansion Program Regulatory Update • Petition for Declaratory Order on Commercial Structure approved from Federal Energy Regulatory Commission (FERC) – November 2010 • Affirmed with U.S. Department of State that reversal of “Portal Link” cross border did not require new Presidential Border Crossing Permit – The section had originally transported Canadian production south • North Dakota Public Service Commission (PSC) Application - Filed November 2010 - Decision expected May 2011 • National Energy Board (NEB) Application Filed January 2011 – Hearing is set for October 4th 2011 13
  14. 14. Market Fundamentals – Light Oil Bakken  Spot Spreads to WTI $20.00 production  Brent $16.00 continues to  $12.00 LLS climb… $8.00 $4.00 $0.00 ‐$4.00 Source: Enbridge Commodity Forecasting ‐$8.00 Jan‐06 Jan‐07 Jan‐08 Jan‐09 Jan‐10 Jan‐11 Change  in  …while refinery  Refinery Conversions Year Light conversions in Midwest  WRB Wood River 2012 ‐130,000 will further reduce  BP Whiting 2013 ‐230,000 regional demand for  MAP Detroit 2013 ‐70,000 light crude Total ‐430,000 Growth in light production coupled with refinery conversions in Upper  Midwest will continue to cause market disparity for WTI 14
  15. 15. 2010 Crude Disposition by Region (MB/D) Canada Is Main Supplier for PADD II Markets 15
  16. 16. Enbridge Extending Light Crude toPremium Light Sweet Markets PADD I and PADD II Premium Markets Bakken Sweet to USGC 16
  17. 17. Monarch Pipeline Project Cushing to Houston – A 475 mile pipeline from Cushing to the interconnect north of Houston to serve US Gulf Coast refinery hub – Utilize existing terminal at Cushing and deliver into existing terminal and pipeline infrastructure in Houston area – Designed based on 350 kbpd of WTI – Expandable to meet market needs to connect supplies to vast Gulf Coast hubs – Targeting a Q4 2013 in-service date 17
  18. 18. Contract Storage and Terminalling Existing Terminal that includes contract storage Existing Terminal with new contract storage capability • Contract Storage – $77 million Cushing expansion – Additional 3 million barrels of capacity – In-service late 2011 – Total system capacity after expansion: 19 million barrels • Operational Flexibility – Growing Lakehead volumes will spur additional investment 18
  19. 19. Conclusion• North America has crude oil reserve potential that can provide secure energy resources• Industry has the technology, ability and willingness to develop, produce, transport and refine these resources in a safe and responsible manner• Revitalized public outreach and education about the importance of these secure energy resources is a vital element to insure their continued development• New pipeline construction projects are necessary to meet producers’ needs to bring crude oil to markets – Improve market access and prevent bottlenecks that disadvantage producers, states and consumers – Seek predictable and reasonable regulatory permit processes – Private investments in infrastructure boost economy 19
  20. 20. Questions?