Midwest Supppp y ply Update: Alliance Pipeline and Rockies ... · Trans White River CIG WIC REX...

Midwest Supply Update:pp y pAlliance Pipeline and Rockies Alliance Pipeline

September 14, 2009

Tony StraquadineGovernment Affairs Manager

Forward looking statements and informationa d o at o

Certain information contained in this [presentation], including use of the words “anticipate” “expects” and “expected to” constituteof the words anticipate , expects , and expected to , constitute forward looking statements and information. Although Alliance [Canada or US] believes that these statements are based on i f ti d ti hi h t bl dinformation and assumptions which are current, reasonable and complete, these statements are necessarily subject to a variety of risks and uncertainties including, but not limited to, future operating performance, regulation, economic conditions and fundamentals affecting the oil and gas producing and marketing industries. Should one or more of these risks or uncertainties materialize or fail to materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected.

Slide 2 September 14, 2009 LDC Gas Forum – Mid Continent

Midwest Supply Updated est Supp y Update

• About Alliance Pipeline• About Alliance Pipeline

Developments in Canada

Development in North Dakota

• Rockies Alliance Pipeline

Slide 3 LDC Gas Forum – Mid ContinentSeptember 14, 2009

Alliance Pipeline is one of the longest pipelines in North Americapipelines in North America

Serving WCSB Shippers:

• Consistently operating since December 2000:

US$4 5B Pipeline projectUS$4.5B Pipeline project executed 1997-2000

2,311 miles from NE BC to Chicago constructed on schedule and on budget

Operating at full capacity Owned 50% by Enbridge and Operating at full capacity(1.6 bcf/d) in dense phase ~1100 Btu/scf (25°F HDP)

50% by Fort Chicago Energy Partners


About Alliance Pipeline bout a ce pe e

• High pressure (1440 to 1935 psi) 42-36 inch42-36 inch

• Efficient compressor stations with expanding waste heat power ANR

Guardiangeneration

• Chicago market hub – delivery

GuardianNGPLVector PipelineMidwestern• Alliance Interstates has been at

premium to Chicago City Gates• Straddled by the Aux Sable

MidwesternChicago LDC’s(Nicor & Peoples)

Straddled by the Aux Sable Channahon extraction/fractionation plant south of Chicago


Why is Shale Gas important?y s S a e Gas po ta t

• It’s Abundant :A il bilit d it f l i iti lAvailability and security of supply is critical• Montney, Horn & Bakken plays are maturing

• Attractive prices:Shale gas will likely create downwardShale gas will likely create downward pressure on traditional gas supply basins

• Transportation options :Alliance is uniquely positioned to offer long haul transport to Mid Continent Marketshaul transport to Mid Continent Markets

LDC Gas Forum – Mid ContinentSlide 6 September 14, 2009

Alliance Pipeline Canadian Open Seasons Ca ad a Ope Seaso s

• Between June 1-July 15, 2009, Alliance held concurrent open seasons for a new gathering receiptconcurrent open seasons for a new gathering receipt and Canadian delivery services


Gathering Receipt Service (GRS)Gat e g ece pt Se ce (G S)(1)

(1)

(2)(2)

(3)

(4)

September 14, 2009Slide 8 LDC Gas Forum – Mid Continent

Canadian Delivery Service (CDEL)Ca ad a e e y Se ce (C )(A)

(C)

Sask.

(B)(B)

(D)


Alliance is focused on North Dakotaa ota• Bakken located in the

Williston Basin overlappingWilliston Basin overlapping Saskatchewan, Manitoba, Montana and North Dakota Alameda

Estlin

• 50+ Bcf of recoverable associated gas reserves -liquids-rich at 1400+ btu/cf

Towner

Wimbledon

• Pecan Pipeline deliveries to Alliance Pipeline are starting this fall with a waiverthis fall with a waiver allowing over 1500 btu/cf

Source: http://bakkenoil.com/faq/, US Geological Survey, April 2008,

Slide 10

p q , g y, p ,Production info: North Dakota website

LDC Gas Forum – Mid ContinentSeptember 14, 2009

North Dakota NatGas ProductionEarly days for the Bakken/Three Forks/Sanish y y

# OF WELLS PRODUCING NATGAS 2007 2008

YEAR OVER YEAR

BAKKEN 415 825 410MADISON 1522 1517 ‐5RED RIVER B 276 301 25TOTAL 2741 2757 16TOTAL 2741 2757 16

MMCFD PRODUCED 2007 % TOTAL 2008 % TOTAL2

YEAR OVER YEAR

BAKKEN 19 9% 50 21% 158%BAKKEN 19 9% 50 21% 158%MADISON 63 29% 58 24% ‐8%RED RIVER B 27 12% 50 21% 85%TOTAL 219 100% 238 100% 9%

*North Dakota Industrial Commission, Department of Mineral Resources, Oil and Gas Division

TOTAL 219 100% 238 100% 9%

September 14, 2009 LDC Gas Forum – Mid ContinentSlide 11

Alliance Pipeline - Capacitya ce pe e Capac ty• FERC Certificated Capacity - 1.513 Bcfd

C t t d C it 1 325 B fd• Contracted Capacity - 1.325 Bcfd

• Pecan’s Prairie Rose Pipelinetargeted to be completed Q4 2009targeted to be completed Q4 2009

• The remaining unsubscribedcapacity will be 108 MMcfdcapacity will be 108 MMcfd

• Alliance is capable of servingforecast Bakken associated gasforecast Bakken associated gas production


The Alliance Value EquationThe Alliance Value Equation

Alliance is the best Bakken to Market Option

• Capacity with expandability

• Competitive transport rates

• NGLs capable


Rockies Alliance Pipelineoc es a ce pe e

Project Specifics-1,080 Miles- $4.5 Billion- 1.3 – 1.7 Bcf/d- 1440 psig- NPS 42- C/S = 6 – 12 stns

Slide 14

RAP will work in concert with Questar Overthrust PipelineQuesta O e t ust pe e

kPioneerWilliams ‐Opal

kPioneerWilliams ‐Opal

RAP will contract for capacity on Questar Overthrust Pipeline to provide the following interconnections:

Opal Blacks Fo

rk

n Rive

r

NWP OTPL

CIG

Granger

Opal Blacks Fo

rk

n Rive

r

NWP OTPL

CIG

Granger

Wamsutter

REXWIC

LostCabin

Echo Springs

OTPL

CIG

RAP

Wamsutter

REXWIC

LostCabin

Echo Springs

OTPL

CIG

RAP

following interconnections:

Opal areaOpal Plant Pioneer PlantBlacks Fork Plant Granger PlantM lti l i t t t i liKe

rnKe

rn CIGWICREX

Echo Springs

OTPL(White River Lateral)

CIGWICREX

Echo Springs

OTPL(White River Lateral)

Multiple interstate pipelines

Wamsutter areaEcho Springs Lost CabinMultiple interstate pipelines

CIGPowder

MedicineBow

CIGPowder

MedicineBow

Multiple interstate pipelines

White River Hub (Meeker)EnterpriseMultiple interstate pipelines

White RiverTrans

CIGWICREX

OTPL(White RiverLateral)

White RiverTrans

CIGWICREX

OTPL(White RiverLateral)

Cheyenne

CheyennePlains

REXTrailblazer

REXWIC

RAP RAP

Cheyenne

CheyennePlains

REXTrailblazer

REXWIC

RAP RAP

Cheyenne (direct to RAP)Powder River pipelinesMultiple interstate pipelines

White RiverHub

QPC NWP/Williams

Enterprise

REX

WIC

CIG

Trans‐Colorado

White RiverHub

QPC NWP/Williams

Enterprise

REX

WIC

CIG

Trans‐Colorado

Slide 15

ss

September 14, 2009 LDC Gas Forum – Mid Continent

RAP will deliver to the Chicago and Mid-Continent markets through a connection to Alliance Pipeline’s Hubp

Alliance Header Delivery CapabilityMeterStation

Delivery Point Capacity

AllianceContractedDeliveries

SpareStation

CapacityDelivery Point CapacityNicor 350NGPL 1,600Vector 1,500ANR 1,150Midwestern 650P l 600

Deliveries350

2381650

3588

Capacity0

1,5981,119

50064712

Downstream Receipt Capability *

Peoples 600Guardian 1,000

Total 6,850

58814

1,988

12986

4,863

DownstreamTakaway

Delivery Point CapacityNicor 800NGPL 1,200Vector 1 200

2008Average

Utilization58460

1 080

2008Spare

Capacity216

1,140120 “Alliance, into interstates” and “Chicago city-

gates” market indices, as reported in Platts Gas Daily, are very closely matched with 99.95% correlation over the past 5 years.

Vector 1,200ANR 1,000Midwestern 780Peoples 600Guardian 750

Total 6,330

1,08090

10060053

2,567

120910680

0698

3,764

Slide 16

* as reported by GPCM 09Q1 Base Case


The supply side of Rockies remains competitive

• Initial production rates in the Rockies rival

Initial Production RatesBy Basin (30‐Day)

8 59

Mmcf/d

in the Rockies rival most shale plays

• Tight gas recoverable 7

88.5

6

7

8

9

g greserves similar to FayettevilleL h l

5

4

5

6

• Large shale gas reserves yet to be developed

2.1 2.1

1

2

3

p0

Barn

ett

Faye

ttevil

leM

ontne

yHo

rn Ri

ver

Hayn

esvil

lePin

edale

/Jona

h

Slide 17

Sources: Wood Mackenzie, BMO, Ultra Petroleum Corp.


With a little help from pricing, Rockies production basins will grow


Coal displacement is likely to raise gas demand in the Midwest

Coal-Based Power Productionby US Census Division (TWh) 463 TWh of Midwest

power generation

• East North Central (Midwest) region has the largest amount of baseline

19

represents approximately 10 Bcf/d of gas demand

largest amount of baseline power production from coal of any in the U.S.

• Any significant push from

214

237 463 147

15Any significant push from Washington to replace coal-fired generation with lower emissions production sources could

241

production sources could generate significant demand growth for natural gas, especially in the Midwest

234 423Midwest

• Political pressures are likely to boost price basis between Rockies and the

Slide 19

Source: EIA, 2008 Full-Year EstimateMidwest going forward


Key RAP advantagesey ad a tages

• Integrated pipeline solution to deliver Rockies gas to market with a seamless single rate servicemarket with a seamless single rate service

• Optimizes and utilizes existing system capability• Expansion capability from 1 3 Bcf/d to 1 7 Bcf/d• Expansion capability from 1.3 Bcf/d to 1.7 Bcf/d• Initial fuel rate = 1.42% (Wamsutter – Chicago)• Delivery to an integrated “delivery hub” with Alliance• Delivery to an integrated delivery hub with Alliance

Pipeline for over 3 Bcf/d of combined flow• Well established, highly liquid delivery point intog y y

Chicago market


Current RAP statusCu e t status

• Open Season ended June 16, 2008I iti l i t t 480 000 Dth/d f b i tiInitial interest = 480,000 Dth/d of subscriptions

• Second Open Season pending market stabilizationSecond Open Season pending market stabilization

• Capacity 1.3 Bcf/d expandable to 1.7 Bcf/d

• Project ScopeC it l C t $4 5 BilliCapital Cost ≈ $4.5 Billion

Length = 1080 miles

Size and Pressure = 42” @ 1440 MAOPSize and Pressure 42 @ 1440 MAOP


SummarySu a y

• North American is poised to be a natural gas p g

power house

• Shift to environmentally friendly natural gas

Sh l l i N th A i ill l• Shale plays in North America will play an

important role in energy mix

• Alliance offers opportunities to move Montney,

Bakken and Rockies gas to marketSlide 22 Northeast B.C. Natural Gas SummitOctober 1, 2009

Key Contacts: ey Co tactsBob Blattler

Business Development ManagerCathie Legge

Manager Customer Servicethi l @ lli i [email protected]

(403) 517-6431

Tony StraquadineG t Aff i M

[email protected](403) 517-6585

Joi WollenManager Gas ControlGovernment Affairs Manager

[email protected](952) 983-1005

Brian Troicuk

Manager Gas [email protected](403) 517-6540

Brian TroicukRegulatory Affairs [email protected](403) 517-6354

LDC Gas Forum – Mid ContinentSlide 23 September 14, 2009

Midwest Supppp y ply Update: Alliance Pipeline and Rockies ... · Trans White River CIG WIC REX...

Documents

Transcript of Midwest Supppp y ply Update: Alliance Pipeline and Rockies ... · Trans White River CIG WIC REX...