Saskatchewan Oil and Gas Supply Chain Forum - SIMSA · PDF file8 PMC Assets in ... • the...

$: Saskatchewan Oil and Gas Supply Chain Forum - SIMSA · PDF file8 PMC Assets in ... • the Empress NGL extraction and fractionation facility ... Saskatchewan Oil and Gas Supply Chain$
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Saskatchewan Oil and Gas Supply Chain ForumMark Mazerolle, Vice President, Pipelines & Supply

DATE: October 5, 2017

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Agenda

• Corporate Overview

• Plains Midstream Canada (PMC) Assets in Saskatchewan

• Personal, Environmental and Asset Protection Highlight

• Capital Investment in Saskatchewan

• Sustainability Spotlight: Steelman Gas Gathering and Processing Plant

• Recent and Proposed Projects in Saskatchewan

• Supply Chain Overview

Plains Midstream Canada | Saskatchewan Oil and Gas Supply Chain Forum

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At PMC, we are committed to the highest standards of environmental protection and safety throughout our organization. Providing a workplace that protects the health and safety of our employees, contractors and the communities surrounding our facilities is critical to the success of our business.

Plains Midstream Canada

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We've developed, and are continuously improving, our asset integrity management programs. Maintaining the integrity of our assets is essential to the health and safety of our stakeholders and the communities in which we operate. Our programs incorporate industry best practices and are designed to exceed regulatory requirements.

Plains Midstream Canada

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Company Overview

• Plains Midstream Canada (PMC) owns, operates, acquires and develops a

diversified portfolio of complementary midstream energy assets

• Calgary-based company, operating strategically located facilities and specializing in

transportation, storage, processing and marketing solutions for crude oil, natural

gas, and natural gas liquids (NGLs)

• Midstream energy leader in our core business areas:

- Canadian crude oil

- North American and international NGLs

- North American and international condensate

- Canadian natural gas processing and Canadian ethane

• Canadian subsidiary of Plains All American Pipelines (NYSE:PAA), founded in

2001 from acquisitions of CANPET Energy Group and the crude oil midstream

assets of Murphy Oil Company Ltd.


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Crude oil is a naturally occurring mixture of liquid hydrocarbons, also called petroleum. Crude oil is often found along with

natural gas, carbon dioxide, saltwater, sulphur compounds and sand. Typically, these substances are separated out from the

liquid hydrocarbons at processing facilities near the producing field. **

Natural gas is gaseous hydrocarbon consisting mostly of methane with lesser amounts of natural gas liquids, as well as other

gases such as nitrogen, carbon dioxide, hydrogen sulphide and water. Once captured at producing wells, natural gas is

transported via pipeline to gas processing facilities where the natural gas liquids, carbon dioxide and other trace compounds

are removed**

End UserTransportationProcessingStorageTransportationWellhead

Producers

Producers

Gas Station/ Retail Distribution

Chemical Processing

End Consumer/ Residential Distribution

32Active StorageFacilities

5.2MBarrels Crude Oil Storage

31MBarrels NGLStorage

4,700 KM Crude Oil

3,500 KM NGL

800 Trailers

7,100 Railcars

2Gas ProcessingPlants

5Gas StraddlePlants

9FractionationFacilities

• PMC’s network of pipelines and fleet of

truck trailers and railcars provide oil and gas

producers with flexibility for transporting

crude oil and NGL.

• We link petroleum producers with refiners

and other customers via pipeline, truck and

rail transportation.

PMC Services General Overview


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Strategically Located Assets

PMC’s network of pipelines and fleets of truck trailers and railcars provide oil and gas

producers with flexibility for transporting crude oil and NGL’s


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PMC Assets in Saskatchewan

PMC’s Presence in Saskatchewan:

Pipelines: 3,031 km of active pipelines

Trucks: 150 trucks/day of product moved

Products: Heavy Crude, Sweet and Sour Crude,

C5+, NGLs, Sour Gas, MJT

PMC Employees in Saskatchewan : 113


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Spectra NGL Acquisition Assets

PMC closed its acquisition of Spectra

Empress Assets in 2016, expanding our

asset base in Saskatchewan.

The deal consisted of:

• the Empress NGL extraction and

fractionation facility

• the Petroleum Transmission Company s

• three rail terminals;

• and two NGL storage facilities


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Operations Management System

As PMC continuously improves, we remain committed to fully

integrating the Operations Management System (OMS)

framework into our organization. OMS is a standard approach for:

• Setting operational expectations

• Planning to meet operational expectations and reviewing progress and

achievements

• Communicating processes and procedures for operations

• Identifying accountable parties for key operational topics


Our mission is to connect our network of people and assets to safely deliver exceptional

results. Throughout this presentation, you will see the various ways in which we are

achieving our mission with the following goals:

• Protect people, the environment and our assets.

• Achieve consistency in execution with continual focus on improvement.

• Maintain socially responsible and sustainable operations.

• Apply discipline and prudence in planning, managing and executing our business.

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PMC participates in the Canadian Energy Pipeline Association (CEPA) Integrity First®

program, an industry-led and proactive approach to enhance accountability and

transparency with Canadians on areas important to them such as safety, the

environment and socio-economics.

CEPA – Integrity First


The priority areas of Integrity First:

Safety:

• Enhance emergency preparedness and response.

• Advance the design, reliability and monitoring of

pipelines.

• Protect workers and communities by creating a

culture focused on safe operations.

• Prevent damage to pipelines.

• Educate and engage stakeholders on public safety.

Environment:

• Manage the short- and long-term impacts to land

and resources.

• Improve air quality by reducing air emissions.

Environment cont:

• Maintain water quality and minimize watershed

disruption.

• Prevent habitat disruption and impacts to wildlife.

• Limit noise impacts from operations.

Socio-economic:

• Improve land use and access by developing strong

landowner relationships.

• Provide economic benefits to communities through

employment, investment and taxes.

• Build strong relationships and agreements with

Aboriginal communities.

• Maintain a highly competent workforce.

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Safety Life Rules

Life Rules is a set of 10 rules every employee and contractor

needs to know and follow to continue to work safely.

Our Commitment to Safety


Worker Safety

Over the years, PMC has

undertaken a number of major

capital expansion projects

employing hundreds of contract

workers. By focusing our efforts

on hazard prevention, we

achieved a 38 per cent

reduction in the recordable injury

rate of our contractors.

Manage Ground Disturbances

Safely Operate Lifting and Motorized Equipment

Isolate Energy Sources

Work Safely at Heights

Operate Vehicles Safely

Have A Safe Work Authorization Permit

Assess Hazards

Use Management of Change (MOC)

Use PPE (Personal Protective Equipment)

Control Entry to Confined Spaces

All contractors working for PMC must maintain a work environment that protects the

health and safety of their workers, PMC employees, and the public, and that protects

PMC facilities, products, equipment, and the environment.

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Carbon Footprint

PMC is committed to reducing greenhouse gas (GHG) emissions from our operations.

A variety of actions are taken to limit the amount of GHG released including:


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Asset Integrity Programs


• In-Line Inspections

• Pipeline Pigging

• Coating and Cathodic Protection

• Flood Monitoring

PMC’s Asset Integrity program was

developed to proactively protect our

pipelines and facilities to foster safe

operations. Our dedication to the most

stringent regulatory requirements and

industry best practices is integral to the

health and safety of the communities and

environment where we operate.

• Chemical Program

• Integrity Digs

• Watercourse Management &

Geotechnical Program

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Constructing and operating pipelines and facilities helps deliver oil and gas economic

benefits to Saskatchewan.

PMC has directly invested ~$ 357MM in Saskatchewan since 2014:

• Kerrobert ~$ 200MM

• Steelman ~$ 56MM

• South Saskatchewan Pipeline ~$ 31 MM

• Manito Pipeline ~ $ 23MM

• Wascana Pipeline ~$ 22MM

• Other ~$ 25MM

Investment in Saskatchewan


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Saskatchewan 2014 to Present Spend


($ millions) 2014 2015 2016 2017* TOTAL

General Contractors $ 30.1 $ 59.2 $ 8.0 $ 0.1 $ 97.4

Site Services $ 8.6 $ 17.7 $ 9.8 $ 6.3 $ 42.3

Mechanical Construction $ 8.4 $ 11.1 $ 15.2 $ 6.8 $ 41.4

Equipment $ 5.2 $ 11.0 $ 6.2 $ 2.6 $ 25.0

Professional Services $ 9.5 $ 6.7 $ 6.2 $ 1.9 $ 24.2

Top 5 categories accounted for spend of $230 MM or 65% of total spend from

2014 to 2017

*as of July 2017

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Steelman Gas Gathering and Processing

• The Steelman system is located in SE Saskatchewan

- Two gas processing plants with total capacity of 24 MMcf/d,

deep cut capability

- ~1,150 km of gas gathering networks, spanning over 15,000 sq.

km


Background

• The Steelman system is located in SE Saskatchewan

- Two gas processing plants with total capacity of 24 MMcf/d, deep cut capability

- ~1,150 km of gas gathering networks, spanning over 15,000 sq. km

• Highly utilized assets with both gas plants representing ~11% of regional capacity while accounting

for 16% of the area’s throughput in 2016

• Current system throughput volume of ~18 MMcf/d

• Liquids production of ~90 bbls/MMcf

• Strong production fundamentals in region

• Growth through additional laterals, increased area capture and anti-flaring legislation driving volumes

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Plant Inlet Rates 2016 & 2017


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Capital Invested In Steelman

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Asset Integrity Maintenance Capital Expansion Capital

Thousands

Steelman Gas Gathering System

2016

2017

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Asset Integrity Maintenance Capital Expansion Capital

Tho

usa

nd

s

Steelman Gas Plant (Inc. Glen Ewen)

2016

2017


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Steelman Projects

Stretch Growth Projects

Contracted/Projects Under Negotiation


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Recent and Proposed Projects in SK

• Wascana / PAA Bakken Bi-Directional

- Evaluating ability to deliver crude from PMC Regina terminal to PAA Bakken North pipelines

• 145 km, 10” Pipeline from Midale to Regina

- Pipeline project intended to provide alternative access to markets via Regina

• Regina Tank Project & Terminal Background

- Timeline: Q3 2017

• Kerrobert Unit Train Terminal Reactivation Opportunity

- Timeline: 2018


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Wascana / PAA Bakken Bi-Directional

Project Summary

• Energy Transfer’s DAPL is in commercial service and has added

490,000 bbls/d of takeaway capacity to the Bakken region creating

demand for Bakken crude and condensate volumes in North Dakota

• Currently, PMC’s Wascana and PAA’s Bakken pipeline only have the

ability to flow crude volumes North

• PMC is evaluating the ability to deliver crude volumes bi-directional

on the PMC Wascana and the PAA Bakken North pipelines between

PMC Regina and the PAA Trenton terminal

• Low capital

• Timeline: Q1 2018

Regina, SK

Trenton, ND

Wasca

na

Johnsons

Corner, ND

Enbridge NDProject Benefits

• Maintains utilization of pipeline and provides future optionality for

PMC to respond to shifting markets

• Provides optionality for producers in Regina (Enbridge) and Trenton

(DAPL, Enbridge ND)


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Project Benefits

• PMC can provide a unique transportation solution by providing the following:

- Access to alternate markets; existing Wascana / Enbridge

- Storage optionality (Richardson cavern lease 1.3mm bbls)

- Centralization of PMC storage to the Regina terminal

- Maximize Regina footprint with space for additional 1 x 150,000 bbl tank. Construction recently completed on new

150,000 bbl tank in-service as of June 2017

Midale to Regina Pipeline Opportunity

Project Summary

• Opportunity for a pipeline project which will establish

PMC Regina as the alternate hub for SE

Saskatchewan production

• 145km, 10” pipeline from PMC Midale to PMC Regina

• Pipeline project intended to provide alternative access

to markets via Regina

• Producers in the region have expressed interest in the

project


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Regina Tank Project & Terminal Background

Regina Tank Project Update

• PMC has completed construction on a 150,000 bbl tank

• Tank in-service as of June 12, 2017

• PMC plans to maximize our Regina footprint in the future with space for additional 1 x 150,000 bbl tank

Project Benefits

• Additional storage capacity to manage operational and market fluctuations

PMC Regina Terminal Background

• Currently the PMC Regina terminal receives crude from Enbridge Line 4 into 3 existing tanks

• 3 outlets from the PMC Regina terminal:

- Truck loading risers for transportation to PMC/PAA terminals

- SSPL

- Wascana


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Kerrobert Unit Train Terminal Reactivation

• PMC constructed a Unit Train Rail facility in Q4

2015

• Due to unfavorable rail economics the PMC rail

terminal has been under utilized

Background

Rail Opportunity

• Apportionment % to increase due to production

outpacing pipeline capacity

• Access to niche markets not connected to

pipelines for supply

• Potential start-up 2018


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Supplier Qualification Process

Internal PMC Process

• All site service providers, medium and high risk contractors

require qualification by ISNetworld.

• Prequalification Process (for on-site contractors)

- ISNetworld Registrant

- A and B rated Contractors are preferred

- C rated Contractors – may require VP Approval

• Prequalification Questionnaire may include shop visit and

inspection

• Financial Review: Companies may be reviewed by credit group.

This review is normally completed prior to an RFP being issued.

• Materials providers to meet Plains specifications which may

include PEIM, CSA and ASME requirements


Supplier

Prequalification

• Preliminary review of

company information by

SCM to determine if there

is a need for the service.

• Business units are

engaged for review and

have access to database

of existing vendors and

contracts.

• Vendors working at site

are to be registered with

ISN and have an

acceptable grade of C or

higher

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Strategic Sourcing


Requests from new vendors

contact: David Campbell, Manager, SCM

Capital Projects

Phone: 403-293-8008

Email: [email protected]

• PMC is in the process of developing longer-term

sourcing events with strategic suppliers

• Our first strategic sourcing event has been

executed and will be rolled out for our 2018

pipeline integrity digs

• 16 contractors have been pre-qualified for a 400

dig program in Alberta, Saskatchewan, Manitoba

and Ontario

• We are undertaking an overall corporate strategy

where we are now planning sourcing events for

multiple disciplines

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Working with Indigenous Communities


• An Indigenous Contracting Strategy was

developed in 2016 with input from Supply

Chain Management, Construction and

Operations Staff

• PMC continues to work on this evolving

strategy to address and resolve increasing

requests from Indigenous vendors

• PMC currently works with Indigenous communities that have the resources to

support our maintenance programs or new projects

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Summary


• Our Personal, Environmental and Asset Protection programs are designed

to support the achievement of our mission - to connect our network of

people and assets to safely deliver exceptional results

• In alignment with our mission we strategically partner with vendors that are

responsible operators, safety oriented, competitive and qualified

• We are continuously evolving and improving our sourcing efforts, currently

undertaking a sourcing strategy where we are partnering with contractors

to allow longer term planning, benefitting both PMC and the vendors

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