alliance pipeline monetizing gas & ngls...moving gas and ngls to the chicago market 17 •...
TRANSCRIPT
Alliance Pipeline
Monetizing Gas & NGLs
Jason Feit
Business Development Manager
Platt's 6th Annual Rockies Oil & Gas Conference
Forward looking statements
and information
Certain information contained in this [presentation], including use
of the words “anticipate”, “expects”, and “expected to”, constitute
forward looking statements and information. Although Alliance
[Canada or US] believes that these statements are based on
information and assumptions which are current, reasonable and
complete, these statements are necessarily subject to a variety of
risks and uncertainties including, but not limited to, future operating
performance, regulation, economic conditions and fundamentals
affecting the oil and gas producing and marketing industries.
Should one or more of these risks or uncertainties materialize or
fail to materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those expected.
Ownership structure
Strong and stable ownership:
• 50% Enbridge Inc.
TSX:ENB / NYSE:ENB
• 50% Veresen
TSX:VSN
• Key Locations
Alliance Pipeline Ltd. – Calgary, Alberta
Alliance Pipeline L.P. – Eden Prairie, Minnesota
North Dakota Area Office – Valley City, ND
Joliet, Illinois - market deliveries
3
Traversing the Prolific
Montney and Bakken
4
• 2,400 miles of 36” pipe
• 11 years of safe operations
• Transport capacity of 1.6 Bcfd of which 1.405
Bcfd contracted through 2015
• Over 6 Tcf has been transported since start-up
• Receiving dense phase gas up to 1,500 btu/scf
Technology
• Pipelines are one of the safest methods of transporting
hydrocarbon products
• Alliance is one of the newest and most modern pipeline
systems in North America, built using the most advanced
design and technology available at the time
• 20% to 50% thicker than most operating pipelines, which helps
prevent damage from external forces, and reduces the
possibility of failure caused by corrosion
• The pipeline can also be remotely operated and monitored from
a central site and an advanced leak detection system will warn
our control center of even the smallest leaks
Advanced Reliability
• Driven by industry-leading standards
and a rigorous integrity management
plan, Alliance consistently delivers
exceptional reliability
• Alliance’s fleet of GE jet turbines, used
for compression, leads the industry in
providing consistent and reliable
service
2011 reliability: 99.91%
• Alliance customers can be confident
their product is on the move to market
as planned
Cost Effective Solution for Gas & NGLs
• Alliance is optimized to ship liquids-rich natural gas with NGL
processing facilities in place at the terminus of our line in
Chicago
• Shipping NGLs within the gas stream:
Eliminates requirement for customers to invest in costly upstream processing facilities
Enables E&P customers to focus on their core business – getting gas and liquids out of the ground
Creates optionality for midstream and marketing companies
Provides an economic advantage by processing NGLs at a world-scale plant with significant economies of scale
Typical Gas Processing Flow
Avoided Capital Costs
Alliance Reduces a Producer’s Capital
Costs & Frees Up Constrained Resources
• Alliance allows shippers to avoid the need for two
pipelines or excessive trucking/railing as it can
transport both liquids and gas to market in a
commingled stream
• Reduces field processing costs
• Eliminates concerns related to gas flaring
• Allows producers to focus capital at the drill bit
• Frees up resources – truck drivers, plant
operators, redeploy human capital
• Offers a safer and more efficient option
• Less impacted by weather
• Reduces local vehicle traffic
• More environmentally friendly
9
Fractionation
(Ethane, Propane, Butane & Pentanes +)
Deep Cut
Shallow Cut
Inlet Separation
NGLs Transported on Alliance
10
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
Barr
els
per
Day (
000’s
)
C5+
NC4
IC4
C3
C2
N.D. NGLs
Supply Story Within 25 Miles of APL
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• Production within 25 Miles (40 Kms) of APL has grown 14% since 2001 to nearly 6
Bcf/d while overall WCSB production has declined 15%
• ~ 1/3 of WCSB
production lies within the
25 mile radius of Alliance
• APL forecasts that by
2020 production within
this radius will grow
another 35% over 2010
levels
• Alliance’s close proximity
to the growth allows
connection for relatively
low cost
North Dakota Gas Production
12 Source: North Dakota Pipeline Authority
New Natural Gas Pipeline Infrastructure
will Reduce Flaring in North Dakota
13
North Dakota Forecast Comparison
14
15
Alliance Pipeline
Operations in North Dakota
• 324 miles of pipelines in North Dakota
• 3 compressor stations
Towner
Wimbledon
Fairmount
• Current Receipt Location – Bantry ND
• Planned Receipt Location – Tioga ND
• Delivery Interconnections:
Hankinson, ND
Rosholt, SD
Alliance Assets in North Dakota
Tioga Lateral Project
Moving Gas and NGLs to the Chicago Market
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• Designed to transport gas and NGLs
• Shipping NGLs within the gas stream lowers cost of transport
• Reduces expensive upstream processing facilities
• Allows producers to focus capital at the drill bit
Tioga Lateral Project Benefits:
• Reduced flaring of Bakken Natural Gas
Increased potential economic value for:
• Mineral Owners
• Energy Companies
• State of North Dakota
Reduced ‘green-house gas emissions’ in ND
Increased ‘domestic’ energy to Midwest markets
• Local economic benefits:
Incremental tax revenue
Construction jobs
Local service jobs (restaurants / hotels / etc.)
18
Tioga Lateral Project
Application & Timeline:
• Application filed with the Federal Energy Regulatory
Commission (FERC)
Detailed Environmental, Cultural, Historical and Routing Survey requirements
Proactive system design focused on safety
Diligent Public Consultation opportunities
• Pipeline design: @ 80 miles: 12 inch
Max Pressure: 2160 psi
• Pending FERC approval:
Construction: Oct 2012 – May 2013 In Service: July 2013
19
Reaching Beyond Tioga – Next Steps
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ACE Hub “Alliance Chicago Exchange”
Alliance ACE Connection Points
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ACE Hub Services:
Enhanced Title Transfers • An administrative, no-charge service that
enables gas transported by FT-1
shippers to the ACE Hub to transfer title
to others for: delivery, title transfer to
another shipper; and or nomination of the
gas under a Park and Loan transaction
Wheeling • Interruptible Wheeling (IW) service
provides transportation between points in
the ACE Hub via displacement
Park and Loan (PAL) • This service provides the ability to park
gas or obtain a loan of gas utilizing the
pipelines system’s operationally available
line pack capacity
• NICOR
• NGPL
• Midwest gas
Transmission
• Guardian Pipeline
• Vector Pipeline
• ANR Pipeline
• Peoples Gas Light
• AuxSable
Questions? Contact Alliance Customer Service Price Desk Hotline (403) 517-6277 option 4
Closing Comments
• Alliance is optimized to ship liquids-rich natural gas with NGL
processing facilities in place at the terminus of our line in
Chicago
• Shipping NGLs within the gas stream
Eliminates requirement for customers to invest in costly upstream processing facilities
Enables E&P customers to focus assets on their core business – getting gas and liquids out of the ground
• Tioga Lateral - anticipated in-service date of July 2013
• Alliance – looking for opportunities to grow
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Contacts
www.alliancepipeline.com
Jason Feit Business Development Manager
Direct: (403) 517-7734
Email: [email protected]
Bob Blattler Manager, Supply Development
Direct: (403) 517-6431
Email: [email protected]