Ed MillerEd MillerBusiness Development Project ManagerBusiness Development Project Manager
El Paso RockiesEl Paso RockiesExport ProjectExport Project
August 30, 2005August 30, 2005
Wyoming Natural Gas Wyoming Natural Gas Pipeline AuthorityPipeline Authority
2
Cautionary Statement Regarding Cautionary Statement Regarding Forward-looking StatementsForward-looking Statements
This presentation includes forward-looking statements and projections, made in reliance on 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 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 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. 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 However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this presentation, projections, anticipated results or other expectations expressed in this presentation, including, without limitation, the ability to implement and achieve our objectives in the long-including, without limitation, the ability to implement and achieve our objectives in the long-range plan; changes in commodity prices for oil, natural gas, and power; inability to realize range plan; changes in commodity prices for oil, natural gas, and power; inability to realize anticipated synergies and cost savings associated with restructurings and divestitures on a anticipated synergies and cost savings associated with restructurings and divestitures on a timely basis; our ability to obtain necessary governmental approvals for proposed pipeline timely basis; our ability to obtain necessary governmental approvals for proposed pipeline projects and our ability to successfully construct and operate such projects; the risks projects and our ability to successfully construct and operate such projects; the risks associated with recontracting of transportation commitments by our pipelines; regulatory associated with recontracting of transportation commitments by our pipelines; regulatory uncertainties associated with pipeline rate cases; general economic and weather conditions in uncertainties associated with pipeline rate cases; general economic and weather conditions in geographic regions or markets served by El Paso Corporation and its affiliates, or where 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 operations of the company and its affiliates are located; the uncertainties associated with governmental regulation; difficulty in integration of the operations of previously acquired governmental regulation; difficulty in integration of the operations of previously acquired companies, competition, and other factors described in the company’s (and its affiliates’) companies, competition, and other factors described in the company’s (and its affiliates’) Securities and Exchange Commission filings. While the company makes these statements and 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 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 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 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 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 other forward-looking statements made by the company, whether as a result of new information, future events, or otherwise. information, future events, or otherwise.
3
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,0001
99
0
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
Big Horn Wind River
Green River Overthrust
Powder River Uinta
Piceance Denver
1990-2002: Wellhead total data from IHS database2003: Estimate2004-2010: CIG forecast
Forecast by 2010: High Case 13,000 Mid Case 9,500 Low Case 7,200
Rocky Mountain SupplyRocky Mountain Supply(Volumes are Wellhead – Measured in MMcf/d)(Volumes are Wellhead – Measured in MMcf/d)
1.5 Bcf/d
4
Cheyenne Plains ThroughputCheyenne Plains Throughputvs. Midcontinentvs. Midcontinent
460
480
500
520
540
560
580
600
620
8/1/
2005
8/2/
2005
8/3/
2005
8/4/
2005
8/5/
2005
8/6/
2005
8/7/
2005
8/8/
2005
8/9/
2005
8/10
/200
5
8/11
/200
5
8/12
/200
5
8/13
/200
5
8/14
/200
5
8/15
/200
5
8/16
/200
5
8/17
/200
5
8/18
/200
5
8/19
/200
5
8/20
/200
5
8/21
/200
5
8/22
/200
5
8/23
/200
5
8/24
/200
5
MD
th/d
$0.0000
$0.1000
$0.2000
$0.3000
$0.4000
$0.5000
$0.6000
$0.7000
$0.8000
$MM
Btu
Cheyenne Plains Throughput NGPL less Cheyenne Hub Cheyenne Plains Rate
Cheyenne Plains Rate = $0.34
MidCon less Cheyenne Hub Differential vs. Cheyenne Plains RateMidCon less Cheyenne Hub Differential vs. Cheyenne Plains Rate August 1-24, 2005August 1-24, 2005
5
TotalTotal20042004
72.872.820092009
82.282.220142014
93.693.6
9.09.010.110.111.711.7
8.78.711.111.114.414.4
14.114.114.614.616.216.2
4.04.04.24.24.94.9
3.83.84.74.75.25.2
10.510.510.910.911.611.6
MexicoMexico
5.35.36.46.47.37.3
WesternWesternCanadaCanada
EasternEasternCanada Canada
NW and NW and AlaskaAlaska
6.36.37.27.27.77.7
2.52.52.72.73.13.1
5.05.06.26.27.07.0
MaritimesMaritimesand and
Northeast U.S.Northeast U.S.
3.73.74.14.14.74.7
Bcf/dBcf/d
Source: El Paso/ Energy Information Agency
Projected Demand GrowthProjected Demand Growth
6
PerryvillePerryville CampbellsvilleCampbellsville
PipelinePipeline Gas Daily PointGas Daily Point TakeawayTakeawayGas Daily Gas Daily
PointPoint TakeawayTakeaway
ANRANR LALA 1,4001,400 LALA 1,4001,400
NGPLNGPL TexOkTexOk 1,8001,800 TexOKTexOK 1,6001,600
PEPLPEPL –– 1,5001,500 –– 1,6001,600
TGCTGC –– 1,6001,600 –– 1,6001,600
MGTMGT –– 650650
TGPTGP Zone 3, 500 Leg, 800 Zone 3, 500 Leg, 800 LegLeg 4,1504,150 –– 2,4002,400
TGTTGT Zone 1Zone 1 2,0002,000 –– 1,7001,700
TetcoTetco M-1 (Kosi)M-1 (Kosi) 2,5002,500 –– 2,5002,500
MRTMRT –– 730730 –– 730730
CGTCGT –– 2,4002,400 –– 2,2002,200
SNGSNG LALA 3,0003,000
TGPLTGPL Zone 4Zone 4 4,0004,000
FGTFGT Zone 3Zone 3 1,9001,900
TotalTotal 26,98026,980 16,380 16,380
Connectivity / LiquidityConnectivity / Liquidity (MMcf/d) (MMcf/d)
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Cost of Capacity Shortage Out of RockiesCost of Capacity Shortage Out of RockiesEstimated Revenue Lost per Bcf/d of Rockies ProductionEstimated Revenue Lost per Bcf/d of Rockies Production
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
1 3 5 7 9
11
13
15
17
19
21
23
Months of Delay
($M
illio
ns
)
Net Present Value at 20% Pre-TaxNet Present Value at 20% Pre-Tax
$2/Mcf Basis
$1/Mcf Basis
$0.25/Mcf Transport
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OverviewOverview
► Two alternativesTwo alternatives– Opal to Campbellsville, KentuckyOpal to Campbellsville, Kentucky– Opal to Perryville, LouisianaOpal to Perryville, Louisiana
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Opal CheyenneWamsutter
Greensburg
Perryville
Campbellsville
Rockies Export Project RouteRockies Export Project RouteSchematicSchematic
ANR
ANRTennessee
Sonat
Tennesseeto Sonat
Tennessee
► Propose as seamlessPropose as seamless► Downstream transport with rate certainty available as part of projects
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PerryvillePerryville
► Can be constructed economically for smaller volumes; minimal risk of delay; Can be constructed economically for smaller volumes; minimal risk of delay; shortest and cheapest routeshortest and cheapest route
– Range of rates from $1.10 to $1.40/Dth from Opal to Perryville depending Range of rates from $1.10 to $1.40/Dth from Opal to Perryville depending upon commitments (includes $7 fuel)upon commitments (includes $7 fuel)
– Range of Rockies commitments required from 600 MDth/d upRange of Rockies commitments required from 600 MDth/d up
– Additional seamless rates to Pugh (SNG Zone 1; TGP 500 Leg / 800 Leg; Additional seamless rates to Pugh (SNG Zone 1; TGP 500 Leg / 800 Leg; Transco Z3, Z4; PGT Z2, Z3; Tetco M-1); Lebanon, Cornell (DTI), Joliet Transco Z3, Z4; PGT Z2, Z3; Tetco M-1); Lebanon, Cornell (DTI), Joliet Hub, and othersHub, and others
– Rates become more attractive as commitments increaseRates become more attractive as commitments increase
► Accesses highest demand growth area in the U.S. in southeastAccesses highest demand growth area in the U.S. in southeast
– Recent Florida basis is $1.00 to HenryRecent Florida basis is $1.00 to Henry
► Late 2008 in-serviceLate 2008 in-service
► Also directly accesses east coast pipelines and existing shippersAlso directly accesses east coast pipelines and existing shippers► Interim capacity available to Greensburg by March 2007 as part of projectInterim capacity available to Greensburg by March 2007 as part of project
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CampbellsvilleCampbellsville► Balances gaining close proximity to Northeast markets while minimizing Balances gaining close proximity to Northeast markets while minimizing
risk of delaysrisk of delays
– Avoids construction through Illinois, Indiana, and OhioAvoids construction through Illinois, Indiana, and Ohio
– Based upon previous proposed projects, building through those Based upon previous proposed projects, building through those states will cause 2-year delay or more to in-servicestates will cause 2-year delay or more to in-service
► Range of rates from $1.30 to $1.45/Dth from Opal (includes $7 fuel)Range of rates from $1.30 to $1.45/Dth from Opal (includes $7 fuel)
► Range of Rockies commitments required from 1.5 to 2 Bcf/dRange of Rockies commitments required from 1.5 to 2 Bcf/d
► 500 MDth/d of downstream capacity available to Ellsworth (near Leidy 500 MDth/d of downstream capacity available to Ellsworth (near Leidy area) on Tennesseearea) on Tennessee
► More expensive than PerryvilleMore expensive than Perryville
► Late 2008 in-serviceLate 2008 in-service► Interim capacity available to Greensburg by March 2007 as part of projectInterim capacity available to Greensburg by March 2007 as part of project
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Development ScheduleDevelopment Schedule
► One-on-one meetings with potential shippers One-on-one meetings with potential shippers through September to present detailed rates, route through September to present detailed rates, route info, etc.info, etc.
► Precedent Agreements – September and October Precedent Agreements – September and October 20052005
► Begin NEPA work November 2005Begin NEPA work November 2005
► Anticipated in-service late 2008 on either projectAnticipated in-service late 2008 on either project
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