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a meaningful company doing meaningful work delivering meaningful results Jim Cleary President, El Paso Western Pipelines Platts Conference, Rockies Gas & Oil April 27, 2007

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Page 1: el paso  PlattsRockiesConference

a meaningful companydoing meaningful workdelivering meaningful results

Jim ClearyPresident, El Paso Western Pipelines

Platts Conference, Rockies Gas & OilApril 27, 2007

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• Overview of Rockies Position in North American Market

• Rocky Mountain Production

• Pipeline Capacity and Constraints

• Current & Future Expansions, Capabilities and Timing

Outline

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WICCIGEPNGMojaveCheyenne Plains

Green RiverDenver-Julesburg

AnadarkoRaton

Uinta

Powder River

Permian

Big Horn

Wind River

Piceance

El Paso Western Pipelines

San Juan

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Demand Growth Tilts East and North5.45.56.67.5

9.19.5

10.911.8

8.79.0

11.413.216.6

13.314.815.3

3.94.55.55.9

11.610.611.311.3

Mexico

WesternCanada Eastern

Canada NW and

Alaska

6.35.76.87.2

2.72.52.72.9

3.85.05.86.6

Maritimesand

Northeast U.S.

3.43.33.94.3

N.A. Total

2000 76.2

2005 72.9

2010 84.0

2015 90.5

Bcf/d

4.84.14.34.5

-0.6%

2.8%

2.2%

0.6%

0.9%

2000-2015

CAGR

1.8%

1.5%

2.8%

1.1%3.7%

-0.4%

-0.1%

2000200520102015

1.5%

2005-2015

CAGR

1.1%

3.9%

2.2%

2.6%

3.1%

1.4%

2.8%

2.7%2.3%

2.2%

0.7%

Source: El Paso

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Supply Growth Tilts West and SouthBcf/d

N.A. LNGImports

2000200520102015

Western Canada

17.317.617.516.9

Rockies

Mid-Continent

EasternCanada

Mexico

Gulf ofMexico

Onshore Gulf

1.21.21.2 1.2

14.09.3

10.09.1

0.30.50.40.2

5.94.44.13.5

4.87.19.9

10.65.24.95.14.8

3.54.14.54.1

0.61.77.313.6

Source: El Paso

0.00.00.0 1.0

Alaska Mackenzie

Permian

4.04.14.34.3

San Juan

3.93.73.53.3

Shale Plays /

Carthage5.37.39.7

10.7

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0

2,000

4,000

6,000

8,000

10,000

12,000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Big Horn Wind River

Green River Overthrust

Powder River Uinta

Piceance Denver

Rocky Mountain Production(Volumes are Wellhead – Measured in MMcfd)

1990-2005: Wellhead total data from IHS database2006: Estimate2007-2015: El Paso forecast

Forecast by 2015:

High Case 12,873 Mid Case 10,773Low Case 8,673

Forecast

2.46 Bcf/d ofgrowth 2006-2015

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650

2,000

360

265

400

435

330180

East CapacityTrailblazer 850KMI 400CIG* 330C. Plains 730Southern Star 180WBI 265Total 2,755West Capacity

NWP North 650NWP South 360Kern 2,000TransColorado 435Total 3,445

* Excludes capacity from Raton** West/East X-Over Capacity includes REX West by 2007

Northern Rockies Export Capacitywith Recent Expansions*

730

850

Approximately 6.2 Bcf/d

3170**

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Rockies Gas BalanceMMcf/d

Annual Average Wellhead Production Forecast2001 2002 2003 2004 2005 2006E 2007 2008 2009 2010

Dry Production 5,136 5,615 5,961 6,378 6,773 7,168 7,601 7,964 8,261 8,502

Local Consumption* 1,547 1,575 1,548 1,591 1,637 1,613 1,695 1,612 1,701 1,726

Available for Export 3,589 4,040 4,413 4,787 5,136 5,556 5,906 6,352 6,560 6,776

Total Export Capacity 3,633 3,869 4,738 5,397 6,030 6,200 6,200 8,000 8,000 8,000

Capacity Surplus 43 -171 325 611 894 644 294 1,648 1,440 1,224

% Surplus Capacity 1.2% -4.4% 6.9% 11.3% 14.8% 10.4% 4.7% 20.6% 18.0% 15.3%

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Cheyenne Basis to Henry Hubversus Export Load Factors

-0.50

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

60.0% 65.0% 70.0% 75.0% 80.0% 85.0% 90.0% 95.0% 100.0%

Do

llars

per

MM

Btu

Jan 1995 – Mar 2007

Historical RelationshipLoad Factor ~84%

HH Hub Basis ~ $0.71

Source: El Paso

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Jan05-Mar07

Rockies Export PipelinesUtilization Rates

0%

20%

40%

60%

80%

100%

120%

Jan-

05

Feb

-05

Mar

-05

Apr

-05

May

-05

Jun-

05

Jul-0

5

Aug

-05

Sep

-05

Oct

-05

Nov

-05

Dec

-05

Jan-

06

Feb

-06

Mar

-06

Apr

-06

May

-06

Jun-

06

Jul-0

6

Aug

-06

Sep

-06

Oct

-06

Nov

-06

Dec

-06

Jan-

07

Feb

-07

Mar

-07

% U

tiliz

atio

n R

ate

Weighted Average of Rockies Pipelines to the East Weighted Average of Rockies Pipelines to the West

Weighted Average of All Rockies Pipelines

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Northern Rockies BasinsEast & West of Pipeline Divide

Anadarko

Denver Basin

PowderRiver

Big Horn

Wind River

San Juan

Paradox

Uinta

Piceance

Overthrust

Raton

Green River

Continental Divide

Pipeline Divide

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Rockies Supply vs.Regional Export Capacity

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

100% LF

85% LF

Supply Available for ExportBase Case

MMcf/d

Cheyenne Plains 170 expansion

Cheyenne Plains 560 expansion

Expansion needed:

2011 if 85% LF

2015 if 100% LF

REX West1800 expansion

High CaseCP Midpoint70 expansion

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El Paso Provides Infrastructure SolutionsRecent Rockies Expansions

Expansion Projects Capacity (Mdth) In Service

Raton BasinRaton Phase I 11 Dec 1994Campo Lateral 81 Sep 1998Raton Phase II 120 Sep 2001Raton Phase III 45 Sep 2002Raton Phase IV 110 Oct 2005

Power RiverMedicine Bow 260 Dec 1999Medicine Bow II 120 Aug 2000Medicine Bow Loop 655 Dec 2001

Uinta BasinUinta Lateral 200 Dec 1992Piceance BasinParachute Creek Lateral 37 Oct 1996WIC Piceance 350 Apr 2006

Green RiverWIC – Overthrust 300 Jan 2006

Rockies ExportCheyenne Plains 560 Dec 2004Cheyenne Plains Expansion 170 Jan 2006Cheyenne Plains Yuma Lateral 50 Dec 2006

(Contracted Volumes)

3,169

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Western PipelinesExpansion Projects Summary

December 2008 /July 2009(Projected)

$296 MM164 miles of 30”/24”9,400 Hp

900 MDth/d7 Bcf

CIG High Plains Pipeline / Totem Storage

December 2007(Projected)

$12 MM11 miles of 24”/20”29 MDth/dCIG Raton Basin 2007 Expansion

24,300 Hp

10,300 Hp

128 miles of 24”20,600 Hp

Description

$32 MM

$503 MM

$20 MM

$143 MM

Project Cost

July 2008(Projected)

350 MDth/d

1,749 MDth/d

WIC Medicine Bow Expansion

TOTAL

March 2008(Projected)

70 MDth/dCP Midpoint Expansion

January 2008(Projected)

400 MDth/dWIC Kanda Lateral

In-ServiceCapacityProject

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Infrastructure Challenges

• Rising Steel Cost

• Increasing Construction Costs

• Permitting Constraints

• Environmental Stewardship

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Steel Plate Price per Net Ton

$450

$800

$850

$900

$0 $200 $400 $600 $800 $1,000

2003

2004

2005

2006

Cost? Timely? Manpower?

How will infrastructure get built?

Source: Berg Steel Price (X-70 Plate)

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WIC Piceance Lateral ConstructionJanuary 2006

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WIC Piceance Lateral ConstructionJanuary 2006

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Cheyenne Plains ConstructionSummer 2005

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Conclusion – Key Points

• Rockies Potential in North American Market

– Key growth area of domestic supply

– Surpasses GOM Offshore

• Rocky Mountain Production

– Increase of 2.5 Bcf/d by 2015

– Expect average YoY production growth to 2030

• Pipeline Capacity and Constraints

– Rockies Express 1.8 Bcf/d in service by 2008/2009

– Additional intra/inter Rockies capacity need by 2011-2012

– Expect significant basis impact until REX West in service in 2008

• Current and future expansions, capabilities and timing

– Key projects are on the horizon that will provide temporary relief; however, continued Rockies production growth will require additional expansions

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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 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. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this presentation, including, without limitation, our ability to successfully contract, build and operate the pipeline projects described in this presentation; changes in supply of natural gas; general economic and weather conditions in 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 governmental regulation; competition, and other factors described in the company’s (and its affiliates’) 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 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 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 information, future events, or otherwise.

Cautionary Statement RegardingForward-looking Statements