Natural Gas & Oil Infrastructure in the Rockies
An UpdateJOINT MINERALS, BUSINESS AND ECONOMIC
DEVELOPMENT COMMITTEE
Casper, Wyoming May 25, 2006
A Lesson From Natural Gas
First Year Natural Gas Production, J onah/Pinedale
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000Dec
-00
Dec
-01
Dec
-02
Dec
-03
Dec
-04
Dec
-05
Year
Flow
(M
cfd)
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
Pre-1990 Total (Mcfd)
Updated March 6, 2006 (Data accurate through December 1, 2005)
Garfield County, Colorado
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
Mcf
d
2000 2001 2002 2003 2004 2005
Colorado Oil and Gas Commission
AAPG
WBIGrasslands80 MMcfd
El PasoCIG
50 MMcfd
William’sNorthwest175 MMcfd
El PasoCheyenne
Plains770 MMcfd
MidAmericanKern
1,052 MMcfd
GasInfrastructure Added in Last
5 years
Total of 2,127 Mcfd added in the past 5 yrs
THE FUTURE!
1.8 Bcfd
42 –inch diameter
1,323 Miles
Crude Oil In The Rockies
What Has Happened to Rockies Crude Prices??
• Rockies production increasing• Express Pipeline capacity increased in 2005
adding approximately 110,000 of potential additional Canadian crude
• Export pipelines approached capacity in late 2005
• Suncor refinery fire eliminates demand for 60,000 Bopd
• Refinery turnarounds and low sulfur diesel requirements exacerbate the problem
Regional Crude Production is Growing in Some States
020,00040,00060,00080,000
100,000120,000140,000160,000
BOPD
2004 2005
Utah
Colorado
Montana
N Dakota
Wyoming
EIA
395 MBOPD 424 MBOPD
Current Status of Infrastructure
Production/Refinery Balance
Oil Production Refinery Capacity
Montana 89,000 181,200
North Dakota 93,000 58,000
South Dakota 4,000 0
Wyoming 139,000 152,000
Nebraska 7,000 0
Utah 43,000 167,350
Colorado 54,000 87,000
Subtotal 429,000 645,550
Available Refinery Capacity 216,550
Export via Enbridge in N Dakota 78,000
Export via Platte in Wyoming 143,000
Canada (Import capability via Express) 280,000 0
Source: EIA
The Law of Supply and Demand
Wikipedia
WTI $60.75OK Sweet $60.75
WY Sweet $35
KS $55.75
Prices on 3/23/06
The Crude Market a Few Months Ago
Platts – North America Crude Wire
The Market Today
The World Might be Fine but for the Fact that …….
Canadian Association of Petroleum Producers (CAPP)
Canadian Association of Petroleum Producers (CAPP)
Solutions to Crude Oil Bottlenecks in the Rockies
The Future is Rail?
Commodity: Fuels
Search Date: 2006-04-10
Route: BNSF
Tank Cars
Shipper Owned/Leased Zero Mlg.
Destinations Origin: GUERNSEY,WY Transit Time
NORMAN, OK $2794 N/A
per car
Standard tank car is 23,500 gallons or 525-550 Bbls.
Current Proposed Expansions are a Band-Aid to Long Term Development Efforts
Kinder Morgan Platte Pipeline (added pumping capacity)15-25,000 Bbl/D $1.50 per Bbl tariff (new shippers only)
Enbridge (to Clearbrook, MN) 35,000 Bbl/D $0.15 per Bbl tariff (all shippers)
Near term (2 yr)
Kinder Morgan Pony Express Re-conversion up to 200,000 Bbl/D
The Plan to Convert from Crude to Natural Gas
Cost of a Reconversion
• Natural Gas Contracts $124 million• Reconversion Cost $115 million• Cost Allocation to Existing Pipe $100
million?
• Total Cost to Convert $339 million
Follow an NGL Line to Cushing?
Add in El Paso Medicine Bow to get you north and central.
Grass roots pipeline from Wyoming to Cushing, OK 400,000 Plus Bbl/D – Up to $1.2 billion
Longer term (3-5 yr)
Solutions Require Commitments
• Long Term Commitments to Capacity
• Support of Canadian Imports to Anchor a Solution
• Support and Commitment of Refiners to Buy Wyoming Crude
• Support of Producing Community to “get behind a common solution – quickly”
Wyoming Pipeline Authority
Bryan HasslerExecutive Director
303-748-6473152 North Durbin Street, Suite 230
Casper, Wyoming 82601Office (307) 237-5009Fax (307) 237-5242
www.wyopipeline.com
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