Rockies Alliance Pipeline Open Season Presentation Alliance...CIG Historical & Forward Basis Source:...
Transcript of Rockies Alliance Pipeline Open Season Presentation Alliance...CIG Historical & Forward Basis Source:...
Rockies Alliance PipelineOpen Season PresentationDenver – June 3, 2008Houston – June 4, 2008Chicago – June 5, 2008
Slide 2
Agenda
• Welcome and Introductions
• Rockies Alliance Pipeline (RAP) Offering
• Engineering & Construction
• Environment & Permitting
• Route Development & ROW Acquisition
• Open Season Details
Slide 4
Agenda
• Welcome and Introductions
• Rockies Alliance Pipeline (RAP) Offering
• Engineering & Construction
• Environment & Permitting
• Route Development & ROW Acquisition
• Open Season Details
Slide 5
RAP New Facilities
• Proposed Pipeline Facilities! Wamsutter to Ventura: ~810 miles of 42 inch pipeline! Ventura to New Hampton: ~ 65 miles of 42 inch pipeline
(Alliance Pipeline interconnection)
• Proposed Compression Facilities! 6 compressor stations! Maximum discharge pressure = 1440 psig (MAOP)
Slide 6
Questar Overthrust Pipeline
• Questar Overthrust Pipeline (Overthrust) is a subsidiary of Questar Pipeline, a Rocky Mountain company with over 2,500 miles of pipe transporting over 3 Bcf/d.
• Overthrust is a 213-mile, 36”-diameter pipeline from Opal to Wamsutter with contracted capacity of over 1.4 Bcf/d. Overthrust has a concurrent open season proposing expansions of 1 Bcf/d from Opal to Wamsutter and 810 MDth/d from White River Hub (Meeker) to Wamsutter.
• With its positions in the Rockies, Questar Pipeline and its subsidiaries currently deliver to local distribution companies in Utah, Wyoming, Colorado, Idaho, New Mexico, Arizona and California.
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Questar Overthrust Pipeline
• Lowest cost access to major supply points in the Rockies through an existing well-run pipeline system
• Proposed major expansions to increase supply availability • Low fuel requirements to move volumes• Access to Clay Basin Gas Storage via Questar Pipeline• Segmentation and nomination flexibility on the pipeline
Slide 8
RAP Contracted Facilities –Questar Overthrust Pipeline
RAP to contract for capacity on Questar Overthrust Pipeline to provide the following interconnections:
Opal area" Opal Plant # Pioneer Plant$ Blacks Fork Plant % Granger Plant& Multiple interstate pipelines
Wamsutter area" Echo Springs # Lost Cabin$ Multiple interstate pipelines
White River Hub (Meeker)" Enterprise# Multiple interstate pipelines
Cheyenne (direct to RAP)" Powder River pipelines# Multiple interstate pipelines
Slide 9
Alliance Pipeline
• Largest construction project in North America at the time - larger than Rockies Express! US$4.5B project delivered
on time and on budget! Largest project financing
in North American history! 2,311 miles from NE BC to
Chicago! Operational since 2000
Slide 10
Alliance Pipeline
• High pressure (1935 psig) 36” pipeline• Operating at full capacity (1.6 Bcf/d)• Consistently ranked # 1 in reliability and availability
across entire fleet of GE gas turbines worldwide • Environmentally responsible – low GHG emissions• Lead waste heat power generation – six compressor
station sites either operating or under development• Developed and implemented new US MAOP
standards• Industry leading safety record
Slide 11
RAP Contracted Facilities –Alliance Pipeline
RAP to contract for capacity on Alliance Pipelineto provide direct access to Chicago market:
• Alliance Pipeline Interconnection:! At New Hampton (~ 280 mi. upstream of Joliet)
• Expansion Facilities: ! 2 new compressor stations! Total ~ 40,000 installed HP
• Incremental Capacity:! 600 mmcf/d firm capacity
• Existing Interconnections:" Nicor & Midwestern# NGPL ' Peoples$ Vector ( Guardian% ANR
Slide 12
RAP Project, Goals & Strategy
• 1.3 Bcf/d firm transport capacity to Ventura and Chicago hub (expandable to 1.8 Bcf/d)
• Develop integrated pipeline solution to deliver Rockies gas to market
• Competitive rates to move Rockies gas to the Midwest region (North American gas transportation hub with over 35 Bcf/d of interconnected transport capacity)
• Brings together supply and market – financial balance• Optimize and utilize existing system capability• Back haul opportunities upstream on Alliance Pipeline
to access other markets
Slide 13
Market OutlookRockies Production vs Transmission Capacity
Rockies Production Net Export Pipeline CapacityExport Capacity + Local Demand
Source: Supply: Wood Mackenzie, Local Demand: EIA* Rockies production defined as WY, CO & UT.
Pipeline Export Capacity Shortfall
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Total ~ 8.75 Bcf/d Export Capacity REX NE
Trailblazer
El Paso Nat
Other
17%
3%
21%
19%
8%
32%MidwestREX
Gas TransKern River
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12.00
13.00
(Bcf
/d)
Slide 14
CIG Historical & Forward Basis
Source: Platts 240M Forward Data – April 2008
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
Jan-
05
Jan-
07
Jan-
09
Jan-
11
Jan-
13
Jan-
15
Jan-
17
Jan-
19
Jan-
21
Jan-
23
Jan-
25
Jan-
27
12M Ventura 12M Chicago
Ventura and Chicago Basis averages above $1.50/Dth
Slide 15
RAP Competitive Rates with Multiple Options
Fuel will be assessed on a system wide or postage stamp basis which is estimated to be approximately 2.5% and will be adjusted to reflect actual fuel requirements. Fuel charges associated with transport upstream of Wamsutter will be assessed separately.
15 Year Term - Negotiated Reservation Rates
Receipt Area VenturaAllianceMainline Chicago
VenturaCheyenneWamsutterOpal/Overthrust
White River Hubat Meeker
0.40 0.450.95 1.15 1.201.10 1.30 1.351.22 1.42 1.47
1.32 1.52 1.57
Delivery Area
Slide 16
Market OutlookMarket Basis vs RAP Rates
$1.68
$2.02
$1.45
$1.77
$1.30
$1.55
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
Ventura Chicago
Forecast BasisHistorical BasisRAP Rates
$1.10
$1.35
Fuel Charges(2.5%x$8.00/DTH)
• Forecast Basis based on Platts 20 year monthly Forecast from 2008 to the end of 2028.• Historical Basis based on actual monthly indices for the past 5 years.• Reservation Rates based on proposed rates for 15 year contracts.
Slide 17
Agenda
• Welcome and Introductions
• Rockies Alliance Pipeline (RAP) Offering
• Engineering & Construction
• Environment & Permitting
• Route Development & ROW Acquisition
• Open Season Details
Slide 18
Summary RAP New Facilities
• Pipe design parameters! Length: 875 miles! Pipe size: 42” OD! Pipe grade: X70! Design factor: 80% SMYS! Wall thickness: 0.540”/0.726”! Maximum Operating Pressure: 1440 psig (1935 psig Ventura
to New Hampton)
• Compression design specifics! Number of stations: 6! HP requirements: 10,000 – 36,000/station
Slide 21
Procurement – Pipe/Facilities
• Finalizing design• Short listing potential pipe mills
! North America! Overseas
• Finalizing specifications! Compressor stations! Meter stations
• Short listing potential compressor vendors
Slide 22
Industry Leaders/Experience
• Engineering and construction! Large diameter, long distance projects
• Design, construction, logistics, commissioning! High pressure! X70 pipe grade; fracture control design! Mechanized welding! Ultrasonic inspection! 80% SMYS design
• DOT (PHMSA) conditions! In Line Inspection (ILI)
• Environment award winners• Right-of-way acquisition and management
Slide 23
RAP Progress To Date
• Route selection! Identification of key routing matters! Identification of constructability considerations
• Compressor station locations• Preliminary discussions with
! Pipe mills (ID/OD coating mills)! Compressor vendors! Valve manufacturers! Construction contractors (pipeline/station)
• Design considerations• Construction planning
Slide 24
Agenda
• Welcome and Introductions
• Rockies Alliance Pipeline (RAP) Offering
• Engineering & Construction
• Environment & Permitting
• Route Development & ROW Acquisition
• Open Season Details
Slide 25
Environment and RAP
• We have done this before! Large projects
• Alliance Pipeline Inc. – 888 miles / 36” / 1935 psig • Alliance Pipeline Ltd. – 1,423 miles / 36” and 42” / 1743 psig
! Recent Rockies projects• Overthrust Pipeline – 105 miles / 36” / 1440 psig• Questar Pipeline – 60 miles / 24” / 1440 psig• White River Hub – 3 Bcf/d / 30” / 1440 psig
• We have done it right! Acknowledged successes
• 2008 Earth Day award presented to Questar• 2007 SGA Environmental Excellence Award presented to Alliance
Slide 26
Alliance and Questar Synergies
• Regional expertise
• Proven ability to navigate environmental process in order to maintain project schedule! Alliance Pipeline: 2 countries, 3 provinces and 4 states - over
twice the scope of Rockies Alliance Pipeline! Built on schedule and on budget
• Reputation for following through on commitments
• Excellent relationships/reputation with FERC, Forest Service, BLM, and other regulatory agencies and stakeholders
• Recognized industry leaders
Slide 27
Keys to Success on RAP
• Early stakeholder identification and communication
• Early identification and resolution of environmental issues
• Develop strong support team of regional experts
• Maximize use of FERC’s Pre-Filing Process in order to shorten application approval time
Slide 28
RAP Progress To Date
• Scheduling! Cultural and environmental field surveys! FERC environmental process
• Routing! Rangeland – T&E, cultural sites, reclamation! Nebraska Sand Hills – unique ecosystems, reclamation ! Agricultural land – construction and reclamation plan! Rivers – Platte and Missouri
• Air quality
Slide 29
Agenda
• Welcome and Introductions
• Rockies Alliance Pipeline (RAP) Offering
• Engineering & Construction
• Environment & Permitting
• Route Development & ROW Acquisition
• Open Season Details
Slide 30
Right of Way and RAP
• Similar scope! Managed acquisition,
construction and remediation activities on similar ROW with similar land use
• We know how to do it right! Landowner issues
and concerns! Unique land use and
soil issues! On time and on budget
Slide 31
Identified Issues
• Schedule! Survey support ! Accelerated acquisition
• Unique project issues ! Parallel construction! Pivot irrigation systems ! Drain tile systems
Slide 32
Keys to Success on RAP
• Good relations with landowners/affected stakeholders
• Knowledgeable agents/field staff
• Strong support from regional experts
Slide 33
Agenda
• Welcome and Introductions
• Rockies Alliance Pipeline (RAP) Offering
• Engineering & Construction
• Environment & Permitting
• Route Development & ROW Acquisition
• Open Season Details
Slide 34
Open Season Details
• RAP Open Season ends June 16, 2008
• Targeted in-service November 1, 2011
• Capacity 1.3 Bcf/d expandable to 1.8 Bcf/d
• Term differentiated rate options of 10, 15, and 20 years with option for maximum recourse reservation rate or fixed negotiated reservation rates
• RAP has right to revise rates by November 1, 2008 if costs exceed US$4.1B
• Any rate increases are subject to negotiation and approval by shippers on or before November 1, 2008
• RAP to make determination of sufficient capacity subscription by March 31, 2009
• Shipper Board of Director approvals must be obtained by March 31, 2009
• RAP Board of Director approvals must be obtained by May 30, 2009
• FERC 7(C) application to be filed no later than April 30, 2010
Slide 35
Rockies Alliance Pipeline Open Season
Questions concerning RAP and this Open Season should be directed to:Alliance Pipeline:• Eric Besseling (403)-517-6551• Lorraine Lindberg (713)-821-1746
Overthrust Pipeline:• Shelley Wright (801) 324-2509• Gaylen Haag (801) 324-5133
E-mail:• [email protected]