Rockies Natural Gas Resources Northwest Pipeline Customer Meeting - - PowerPoint PPT Presentation

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Rockies Natural Gas Resources Northwest Pipeline Customer Meeting - - PowerPoint PPT Presentation

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Rockies Natural Gas Resources Northwest Pipeline Customer Meeting Seattle, WA May 13, 2008 Brian Jeffries Executive Director Wyoming Pipeline Authority 1 Wyoming Pipeline Authority Mission support infrastructure development to enhance

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Brian Jeffries Executive Director Wyoming Pipeline Authority Rockies Natural Gas Resources Northwest Pipeline Customer Meeting Seattle, WA May 13, 2008

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Wyoming Pipeline Authority

  • Mission – support infrastructure development

to enhance value of oil & gas resources of state

  • Five Member Board Appointed by Governor
  • $3 billion bond issuing capability
  • Not a regulatory or rate setting body

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Natural Gas Critical Component of State Revenue

Minerals 3.1 Natural gas and related products compromise 50- 55% of State’s total revenue

Source: WyEAD and State Lands

Other 1.5 Coal Lease Bonus 0.2 Mineral related sales and use tax 0.2 Severance 0.9 Federal Royalties 0.8 Mineral Property 1.0

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Wyoming Production – Areas to Watch

Powder River Basin Jonah/Pinedale Washakie Basin

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Wyoming – Top Five Producing Counties

200 400 600 800 1,000 1,200 Sublette Sweetwater Campell Fremont Uinta

Bcf per Year

2003 2004 2005 2006 2007 5

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Uinta Basin

Utah Production

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Utah – Top Five Producing Counties

‐ 50 100 150 200 250 Uintah Carbon Duchesne Emery San Juan

Bcf per Year

2003 2004 2005 2006 2007 7

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Piceance Basin DJ Basin

Colorado Production

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Colorado – Top Five Producing Counties

100 200 300 400 500 LA PLATA GARFIELD WELD LAS ANIMAS YUMA

Bcf per Year

2003 2004 2005 2006 2007

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Williams Five Well Pad – Piceance Basin

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Ten Largest Producers in WY/UT/CO (2007)

0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40

Bcf per Day 11

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Probable and Possible Natural Gas Resource Base in Selected Rockies Areas

Basin Bcf Uinta ‐ Piceance 62,037 Wind River 47,118 Greater Green River, Hannah, Laramie 20,819 Powder River Coal Bed Methane 18,507 Big Horn 3,994 Powder River Conventional 3,912 Denver 2,803 Paradox 1,725 Total 160,915 Percent of Total Onshore Lower 48 States 29%

Source: Potential Supply of Natural Gas in the United States, Report of the Potential Gas Committee, Potential Gas Agency, Colorado School

  • f Mines, November 2007

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Production Growing

0.0 2.0 4.0 6.0 8.0 10.0 12.0 2000 2001 2002 2003 2004 2005 2006 2007

Bcf/d

Utah Colorado Wyoming

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Rate of Growth Changing?

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 0.20 0.25 0.30 0.35 0.40 0.45 0.50 0.55 0.60 0.65 2001 2002 2003 2004 2005 2006 2007 Percent Annual Change Bcf per Day Annual Change

Annual Bcf/d Growth Annual % Growth Linear (Annual Bcf/d Growth) Linear (Annual % Growth)

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Factors at Play

  • Land use conflicts

–Split estate –Housing development –Local growth concerns

  • Changing regulatory climate
  • Seasonal restrictions on drilling

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DEN SLC Opal CHY

M I D C O N T I N E N T

PRB DJ NE

Piceance/Uinta PEPL ANR NGPL NNG

Rockies Flow Paths

UT WY CO

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Export Out of the Rockies ‐ Who Owns the Space?

  • Analyzed public data for ten pipelines
  • Examined twelve pathways
  • Reviewed receipt and delivery points in over 900

individual contracts

  • Identified 300+ contracts fitting export criteria
  • Assigned “class” status based upon primary business
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Twenty Largest Capacity Holders

0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80

Bcf per Day

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Capacity Ownership by Class

7% 1% 18% 54% 20%

EGEN INDU MRKT PROD UTIL

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Capacity by Pipeline

23% 18% 13% 11% 9% 6% 6% 5% 5% 2% 2% KERN REX CHEY TB NWPL‐N KMI TC NWPL‐S CIG SSGP WBI

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Pipelines Dominated by Utilities

13% 24% 6% 57% INDU MRKT PROD UTIL 2% 6%4% 88% EGEN INDU PROD UTIL 2% 31% 67% EGEN INDU MRKT PROD UTIL

Northwest Pipeline Southern Star Kinder Morgan Interstate

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Pipelines Dominated by Producers

26% 68% 6% MRKT PROD UTIL 23% 65% 12% MRKT PROD UTIL 12% 88% MRKT PROD 14% 83% 3% MRKT PROD UTIL

Colorado Interstate Trailblazer Rockies Express Cheyenne Plains

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Kern is a mixed bag

36% 14% 30% 20%

EGEN MRKT PROD UTIL

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And the rest

30% 70% MRKT PROD 4% 96% MRKT PROD 89% 8% 3% MRKT PROD UTIL

Northwest Pipeline - South TransColorado Williston Basin Interstate

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Majority of Capacity is to the East

57% 33% 10%

East West South

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Support for expansion has differed by direction

20% 77% 3% MRKT PROD UTIL 70% 14% 4% 12% EGEN MRKT PROD UTIL

West - Kern East – REX, Trailblazer, Cheyenne Plains

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Who paid for expansions?

18% 60% 5% EGEN MRKT PROD UTIL

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The 20 largest expansion supporters since 2001

Total $ commitment to expansion by all shippers since 2001 > $9 Billion

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Three Different Growth Profiles to Test

6.0 8.0 10.0 12.0 14.0 16.0 18.0 2000 2002 2004 2006 2008 2010 2012 2014

Bcf/d

6% 4% 2%

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Export Requirement vs. Export Capacity

2 4 6 8 10 12 14

2000 2002 2004 2006 2008 2010 2012 2014 2016

Bcf Per Day 6% Production Growth 4% Production Growth 2% Production Growth

100% of Export Capacity 100% of Export Capacity

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High capacity utilization widens basis differential

31 40% 50% 60% 70% 80% 90% 100% ($6.00) ($5.00) ($4.00) ($3.00) ($2.00) ($1.00) $0.00 $1.00 $2.00

Percent of Export Capacity Utilized Rockies Basis Basis Percent Capacity Utilization A $1.00 drop in the annual price for natural gas produced in Wyoming lowers per capita combined Wyoming state and county tax revenue by over $500.

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Rockies Express Kinder Morgan 1.4 Bcf per day current 0.4 Bcf per day expansion

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Rockies Export Expansions

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Kern River 0.15 Bcf per Day

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Rockies Export Expansions - Planned

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Sunstone Williams/TransCanada 1.2 Bcf per Day

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Rockies Export Expansions - Planned

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Ruby El Paso 1.2 Bcf per Day

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Rockies Export Expansions - Planned

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Bronco Spectra 1.0 Bcf per Day

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Rockies Export Expansions - Planned

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Bison TransCanada/ONEOK 0.45 Bcf per day

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Rockies Export Expansions - Planned

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Alliance/Questar 1.2 Bcf per day

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Rockies Export Expansions - Planned

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Pathfinder TransCanada/ONEOK 1.2 Bcf per day

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Rockies Export Expansions - Planned

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Kinder Morgan 1.2 Bcf per day

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Rockies Export Expansions - Planned

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Project Origin Destination Capacity Kern Opal CA/NV 145 Sunstone Opal Stanfield 1200 Bronco Opal Malin 1000 Ruby Opal Malin 1200 Bison Powder River NBPL 450 Pathfinder SW Wyoming NBPL/TCPL 1200 Alliance/Questar SW Wyoming Alliance 1200 Kinder Morgan Central WY Chicago 1200

Proposed Projects to Export Rockies Production

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Producers have favored eastward expansion

70% 14% 16%

East West South

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Based on producer commitments in pipeline expansions since 2001

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We usually find gas in new places with old ideas. Some times, also, we find gas in an old place with a new idea, but we seldom find much gas in an old place with an old idea. Several times in the past we have thought that we were running out of gas, where actually we were only running out of ideas.

Adapted from Parke A. Dickey, as printed on the closing page of the Potential Supply of Natural Gas in the United States, Potential Gas Agency, Colorado School of Mines, November 2007.

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Brian Jeffries Executive Director Wyoming Pipeline Authority 303.619.3906 b57.jeffries@comcast.net

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