panhandle eastern pipe line and trunkline...
TRANSCRIPT
PANHANDLE EASTERN PIPE LINE
AND TRUNKLINE GAS 2014 Customer Meeting
San Antonio, Texas | May 1, 2014
IMPORTANT DISCLOSURES
This communication is based on information which Panhandle Eastern Pipe Line
Company, LP, Sea Robin Pipeline Company, LLC, Trunkline Gas Company, LLC
and Trunkline LNG Company, LLC (collectively, “Company”) believes is reliable.
However, Company does not represent or warrant its accuracy. The statements
and opinions expressed in this communication represent the views of Company
as of the date of this report. These statements and opinions may be subject to
change without notice and Company will not be responsible for any
consequences associated with reliance on any statement or opinion contained in
this communication. Company disclaims any intention or obligation to update
any statements or opinions contained in this communication. This communication
is confidential and may not be reproduced in whole or in part without prior written
permission from Company.
AGENDA • Energy Transfer Update/Overview
Shelley Corman, EVP – Interstate Pipelines
• Gas Electric Coordination Brad Holmes, VP – Market Services
• Supply Update Shannon Spencer, Manager – Market Analysis
• PEPL/TGC Operations & Commercial Update Beth Hickey, VP – Commercial Marketing & Optimization
• Questions/Open Table Session Jackie Butler, Senior Director – Marketing
ENERGY TRANSFER UPDATE/OVERVIEW
Shelley Corman, EVP – Interstate Pipelines
ENERGY TRANSFER ASSETS - 2002
5
Approximately 3,400 miles of natural gas pipelines
ENERGY TRANSFER ASSETS - TODAY
6
ETP Assets
Pipelines
Processing
Storage
Treating
SXL Assets
Pipelines
Terminals
SUG Pipelines
Storage
Trunkline LNG
Note: Assets Shown Exclude SUN Retail and 2014 Regency acquisitions
RGP Assets Pipelines/ Gathering Processing More than 65,000 miles of natural gas, NGL,
crude, and refined products pipelines
ENERGY TRANSFER – BUSINESS TRANSFORMATION
7
Intrastate/Midstream
Interstate Pipeline Build-out
Regency Acquisition
LDH Energy Acquisition
Southern Union Merger
Sunoco Acquisition
Largest Intrastate pipeline system in Texas
FEP, Tiger, TW Phoenix Lateral
Improved presence in major shale plays; enhanced growth platform
Midstream Acquisitions
Susser Acquisition (pending)
Expanded geographic reach (PEPL, TGC, Sea Robin, TLNG, FGT)
Expanded into crude oil and refined product logistics
Increased midstream capabilities with Regency’s acquisitions of Hoover Energy Partners, PVR Partners and Eagle Rock Energy Partners (midstream assets; pending)
Established NGL platform (now Lone Star)
Broadens Sunoco’s retail footprint
ENERGY TRANSFER CORPORATE STRUCTURE
8
ENERGY TRANSFER EQUITY, L.P. (NYSE: ETE)
SUNOCO LOGISTICS PARTNERS L.P.
(NYSE: SXL)
ENERGY TRANSFER PARTNERS, L.P. (NYSE: ETP)
REGENCY ENERGY PARTNERS LP (NYSE: RGP)
Blue denotes Publicly Traded Partnership
LP Interest, GP Interest, IDRs LP Interest, GP Interest, IDRs, Class H Units*
LP Interest, GP Interest, IDRs
Gathering and Processing
Contract Compression and Treating
Joint Ventures
Lone Star NGL
Intrastate Transportation
and Storage
Interstate Transportation
and Storage
Midstream
NGL Transportation and Services
70% Interest 30% Interest
Refined Product
Pipelines
Terminal Facilities
Crude Oil Pipelines
Crude Oil Acquisition
and Marketing
Sunoco, Inc. Retail
Marketing
*Class H Units track 50% of the SXL GP and IDR economics
ENERGY TRANSFER INTERSTATES CONNECTING SUPPLY AND MARKET
10
Fayetteville Express
Tiger
Trunkline
Florida Gas
Sea Robin
Transwestern
Shale Supply
1
FGT Phase VIII
Demand: 1. Power 2. Industrial 3. Exports
TW Phoenix Lateral
1
1, 2
1, 2, 3 3
1
TRUNKLINE ABANDONMENT
11
• Initial FERC filing for abandonment – 7/26/2012
• FERC issued EA – 4/15/2013
• FERC approved abandonment – 11/7/2013
• TC filed implementation plan – 1/6/2014
• FERC approved implementation plan – 2/12/2014
• Abandonment no later than 11/2014
LAKE CHARLES LIQUEFACTION
12
• DOE FTA Approval – July 22, 2011
• DOE Non-FTA Approval – August 7, 2013
• PDA – October 1, 2013
• FERC Filing – March 25, 2014
• FID – 2015
• Commencement of Construction anticipated in 2015
• First shipment anticipated in 2019
GAS ELECTRIC COORDINATION
Brad Holmes, VP – Market Services
FERC INITIATIVE GAS & ELECTRIC COORDINATION
• In February 2012, FERC issued a notice (Docket AD12-12) for comment on gas-electric interdependence
• Five regional technical conferences were held through the summer of 2012. The conferences explored scheduling and market structures; communications, coordination and information sharing; reliability concerns
• Regional conferences spurred further technical conferences in 2013:
– February 13th – Improving communications and data sharing
– April 25th – Gas and electric trading day differences and scheduling
– May 16th – RTO and ISO update on winter operations
15
FERC INITIATIVE GAS & ELECTRIC COORDINATION
• Communications NOPR (Docket RM13-17) – July 2013
– Provide authority for interstate pipes and utilities that transmit electricity to share non-public, operational information for the purpose of promoting reliable service or operational planning for either party
• Natural Gas Council (representation from major gas groups)
– Reviewing Gas Day, Timely Nomination deadline, additional nomination cycles, changes to the No-Bump rules
16
FERC INITIATIVES ISSUED MARCH 20, 2014
• RM14-2
– Start of the Gas Day to 4:00 a.m.
– Timely Nomination deadline to 1:00 p.m.
– Two additional Intraday cycles
– Multi party transportation contracts for aggregated firm service
• FPA Section 206
– ISO’s and RTO’s must file to adjust the posting of day ahead energy market and reliability unit commitments
• NGA Section 5 Show Cause
– Interstate pipelines must make compliance filings by May 19th to revise their tariffs to provide for the posting of offers to purchase capacity
17
CURRENT NAESB NOMINATION AND SCHEDULING TIMELINE
18
Nomination Cycle
Nomination Deadline (CCT)
Notification of Schedule (CCT)
Nomination Effective (CCT)
Bumping of Interruptible Transmission (IT)
Timely 11:30 a.m. 4:30 p.m. 9:00 a.m. Next Day N/A
Evening 6:00 p.m. 10:00 p.m. 9:00 a.m. Next Day Yes
Intra-Day 1 10:00 a.m. 2:00 p.m. 5:00 p.m. Current Day Yes
Intra-Day 2 5:00 p.m. 9:00 p.m. 9:00 p.m. Current Day No
FERC PROPOSED NOMINATION AND SCHEDULING TIMELINE
19
Nomination Cycle
Nomination Deadline (CCT)
Notification of Schedule (CCT)
Nomination Effective (CCT)
Bumping of Interruptible Transportation (IT)
Timely 1:00 p.m. 4:30 p.m. 4:00 a.m. Next Day N/A
Evening 6:00 p.m. 10:00 p.m. 4:00 a.m. Next Day Yes
Intra-Day 1 8:00 a.m. 11:00 a.m. 12:00 p.m. Current Day Yes
Intra-Day 2 10:30 a.m. 2:00 p.m. 4:00 p.m. Current Day Yes
Intra-Day 3 4:00 p.m. 6:00 p.m. 7:00 p.m. Current Day Yes
Intra-Day 4 7:00 p.m. 9:00 p.m. 9:00 p.m. Current Day No
PROPOSED NOMINATION AND SCHEDULING TIMELINES
20
ISO/RTO Time for Submission of Bids (CCT)
Time for Publication of Day-Ahead Commitment Bids (CCT) (Market Clearing Time)
California Independent System Operator Corporation (CAISO) 12:00 p.m. 3:00 p.m.
ISO New England Inc. (ISO-NE) 9:00 a.m. 12:30 p.m.
PJM Interconnection, LLC (PJM) 11:00 a.m. 3:00 p.m.
Midcontinent Independent System Operator, Inc. (MISO) 10:00 a.m. 2:00 p.m.
New York Independent System Operator, Inc. (NYISO) 4:00 a.m. 10:00 a.m.
Southwest Power Pool, Inc. (SPP) 11:00 a.m. 4:00 p.m.
CURRENT ISO AND RTO SCHEDULES
21
TIMELINES (BASED ON A FEDERAL REGISTER PUBLICATION DATE OF APRIL 1, 2014)
• RM14-2
– NAESB process – 180 days to reach consensus
– If no consensus, comments filed in 240 days
• FPA Section 206
– Interventions due by April 10, 2014
• NGA Section 5 Show Cause
– All interstates must make compliance filings by May 19, 2014
22
NAESB SCHEDULE GAS ELECTRIC HARMONIZATION (GEH) FORUM
• April 3rd - NAESB Board of Directors Meeting
– GEH recommendations to change the annual plan and identify standards that would require changes to support the Rule Making
• From April 4th to June 5th - GEH Forum Meetings
• June 6th – BOD review and vote on Alternative Consensus Proposal
• June 9th – Status report to FERC if no consensus is reached
• July 18th – Complete recommendation to support consensus standards
• August 22nd – WGQ review of recommendations
• September 29th – NAESB files Consensus Standards with FERC
23
TOP ISSUES AS IDENTIFIED AT FIRST NAESB MEETING
• Gas Day Start
• Intraday Nominations 3 vs. 4
• Time of Last Bumping Cycle
• Cycle Times / Overlap / Reaction
• Clean-up / Post-op Nominations
• Capacity Release Changes
• Primary Firm vs. Secondary Out-of-Path
• EPSQ Flexibility
• Energy Day / Multiple Energy Days
• Electric Market Clearing Timelines
24
QUESTIONS?
25
SUPPLY UPDATE Shannon Spencer, Manager – Market Analysis
KEY SHALE PLAYS
28
Utica
Fayetteville Woodford
Barnett
Eagle Ford
Haynesville
Marcellus: from 0 to 10 Bcf/day in 5 years
GROWTH DRIVERS – DRILLING EFFICIENCIES
29
Breakeven Costs in Key Plays
Producers are continually bringing down costs: • Reduced drilling times • Longer laterals • Targeting the most productive parts of the plays; “stacked pay zones” • Pad drilling
Fewer rigs are delivering more gas – this trend is expected to continue
By 2018 the average shale gas rig could produce ~ 3 times more gas than 2008
GROWTH DRIVERS – MARCELLUS & UTICA
30
Marcellus production forecasts continue to be adjusted upward Utica results mixed, production expected to ramp up with infrastructure By the end of 2015: • Marcellus - 15.6 Bcf/d • Utica - 2.6 Bcf/d
Marcellus Production Forecast April 2014
Source: Wood Mackenzie
March Outlook
GROWTH DRIVERS - ASSOCIATED GAS
31
• WPX Energy: “Beast” well –1 Bcf in the first 100 days
• Drilling times have come down by as much as 43%
• Breakeven in the drier areas ~ $4 • Niobrara – the next Bakken?
• One of Encana’s 5 focus areas
• Anadarko planning 600/d new processing capacity
• Noble Energy working on pod-style development program
Piceance and Denver (DJ) Basins
32
• Emerging shale play covering 6.6 million acres in Louisiana and Southern Mississippi
• Studies say it could hold between 7 and 9 billion barrels of oil (Bakken ~7-8 billion)
• >90% oil; high BTU gas • Active producers are EnCana,
Goodrich Petroleum, Sanchez Energy, and EOG Resources
• Some are switching rigs here from Texas
• Mixed results, but producers are renewing 5-year leases
Tuscaloosa Marine Shale
GROWTH DRIVERS – ASSOCIATED GAS
33
Associated Gas Production Forecast through 2020
Eagle Ford
Permian – Tight Oil
Permian –Other
Bakken
All Other
Source: Wood Mackenzie
U.S. associated gas set to grow by 6 Bcf/d between now and 2020 Texas bragging rights: • If the state were a separate
nation, it would be the 9th largest oil-producing country in the world
• It currently has 48% of the country’s drilling rigs
GROWTH DRIVERS – ASSOCIATED GAS
GROWTH DRIVERS – EMERGING OKLAHOMA PLAYS
34
As producers have shifted focus toward liquids production, areas within the Anadarko basin - primarily Oklahoma – are yielding impressive results and garnering much attention. Most shale drilling in the state has yielded natural gas. But oil output has risen by over 100,000 barrels/day over the past two years, reaching a near 25-year high in late 2013 Producers are getting creative with nicknames for the new multi-resource plays
35
EMERGING OKLAHOMA PLAYS “SCOOP”
• Named by Continental Resources in late 2012 • Over 3,000 acres in the Woodford shale • Lies underneath oil fields that have been drilled over the last 100 years • Contains oil, gas and condensates • Between 25 – 50% gas; > 40% rate of return
South Central Oklahoma Oil Province
36
EMERGING OKLAHOMA PLAYS “STACK”
• Named by Newfield Exploration in November 2013 • The play's “stacked” nature provides access to multiple “pay zones” • Combines the Meramec (Mississippian) and Woodford Shale formations • 70% liquids (40% oil); >35% rate of return
STACK
OKLAHOMA STACKED FORMATIONS
37
Tonkawa Cottage Grove
Cleveland Marmaton Cherokee
Atoka
Meramec Lime Osage Lime
Sycamore Lime
Woodford Hunton
Gra
nite
Was
h
38
SCOOP AND STACK – 2013 ACTIVITY
Pie chart size varied by total EUR. Source: Wood Mackenzie
Charter Oak Citation Continental Devon Eagle Rock Marathon Newfield
Operator
Well Production Stream by Type (pie chart)
Oil NGL Gas
39
EMERGING OKLAHOMA PLAYS “NOMP”
• Chaparral Energy is key player, planning up to 45 wells this year • 40-50% oil; > 30% rate of return
Northern Oklahoma Mississippi Play
OKLAHOMA GAS PRODUCTION
Now at the highest level since the early 1990s
40
5.62 5.87
0
1
2
3
4
5
6
7
Bcf
/day
Oklahoma Marketed Natural Gas
Source: EIA
PANHANDLE – NEW/EXPANDED SUPPLY CONNECTIONS
41
More than 1 Bcf/d of new receipt capacity
DCP (200MM) 4Q ‘12
Atlas (425 MM) 3Q ‘13
Caballo Eagle Chief (120 MM) 3Q ‘13
Enable (200MM) 4Q’13
Mid-America (175 MM) 2Q ‘14
NGP Processing Plant 4Q 2014
SemGas (150 MM) 3Q ‘13
Superior (50MM) 3Q ‘13
OK
KS
TX
US SUPPLY GROWTH
42
20+ Bcf/d growth over next 10 years
Source: Wood Mackenzie
Growth escalates
starting 2016
SUPPLY GROWTH – THE NEXT FIVE YEARS
43 43
Five Year Production Change (through 2018)
Gulf Coast -2.53
- Gulf of Mex
+0.22 Eagle Ford
+2.09
Haynesville +2.00
Barnett -0.12
Fayetteville +0.67
Rockies +1.34
Permian +0.63
San Juan -0.36
MidCont +0.74
Utica +2.46
Marcellus (and other NE)
+4.30
West Coast +0.11
Growth
+1.72 Bcf/d
+3.07 Bcf/d
+6.75 Bcf/d
Source: Wood Mackenzie
Decline
SUPPLY GROWTH – FIVE YEARS AFTER THAT
44 44
Gulf Coast -0.03
- Gulf of Mex
0.00 Eagle Ford
+1.71
Haynesville +0.56
Barnett +0.29
Fayetteville +1.28
Rockies +2.18
Permian +0.63
San Juan +0.04
MidCont +0.71
Utica +1.27
Marcellus (and other NE)
+2.66
West Coast -0.04
+2.82 Bcf/d
+3.52 Bcf/d
+3.92 Bcf/d
Source: Wood Mackenzie
Growth Decline
Five Year Production Change (2019 through 2023)
PEPL/TGC OPS/COMMERCIAL UPDATE
Beth Hickey, VP – Commercial Marketing & Optimization
STATEWIDE TEMP RANKS OCT 2013-MAR 2014
-20
-10
0
10
20
30
40
50
1/1
/20
14
1/3
/20
14
1/5
/20
14
1/7
/20
14
1/9
/20
14
1/1
1/2
01
4
1/1
3/2
01
4
1/1
5/2
01
4
1/1
7/2
01
4
1/1
9/2
01
4
1/2
1/2
01
4
1/2
3/2
01
4
1/2
5/2
01
4
1/2
7/2
01
4
1/2
9/2
01
4
1/3
1/2
01
4
2/2
/20
14
2/4
/20
14
2/6
/20
14
2/8
/20
14
2/1
0/2
01
4
2/1
2/2
01
4
2/1
4/2
01
4
2/1
6/2
01
4
2/1
8/2
01
4
2/2
0/2
01
4
2/2
2/2
01
4
2/2
4/2
01
4
2/2
6/2
01
4
2/2
8/2
01
4
Temp
32 Deg Freezing
PEPL AVERAGE SYSTEM TEMPERATURE
51
11 Consecutive Days Below
Freezing
9 Consecutive Days Below
Freezing
STATS ON WEATHER ALERTS
53
Weather Alert Notices
Restriction Days OFO? FM
Panhandle Pipe Line 5 19
Trunkline Gas 5 19
Others 2 to 16 4 to 64
SCHEDULING ALERTS – “HEADS-UP”
• Intraday scheduling reductions will be implemented to ensure that nominations match actual flowing quantities.
• All delivery point operators are required to keep actual daily takes out of
the system less than or equal to scheduled quantities regardless of their cumulative imbalance position.
• All receipt point operators are required to keep actual daily receipts into
the system greater than or equal to scheduled quantities regardless of their cumulative imbalance position.
• All storage customers are requested to stay at or below their Maximum
Daily Withdrawal Quantity (MDWQ). Storage customers should adjust flowing volumes to remain at or below these limits.
• Panhandle will limit Auto-Unpark nominations on the pipeline for the
duration of the extreme weather. These limits will be evaluated on a daily basis.
54
SCHEDULING ALERTS – LIMITING CONTRACT FLEXIBILITY
• Panhandle is requesting all Shippers under Rate Schedule EFT, EIT, SCT, GDS or LFT to limit their hourly deliveries to one-sixteenth of the quantity scheduled for delivery on the applicable day.
• All Interruptible and Out of Path nominations will NOT be scheduled. • Intraday scheduling reductions will be implemented to ensure that nominations match actual
flowing quantities. • All delivery point operators are required to keep actual daily takes out of the system less than
or equal to scheduled quantities regardless of their cumulative imbalance position. • All receipt point operators are required to keep actual daily receipts into the system greater
than or equal to scheduled quantities regardless of their cumulative imbalance position. • All storage customers are requested to stay at or below their Maximum Daily Withdrawal
Quantity (MDWQ). Storage customers should adjust flowing volumes to remain at or below these limits.
• Panhandle will limit Auto-Unpark nominations on the pipeline for the duration of the extreme
weather. These limits will be evaluated on a daily basis.
55
PEPL FIELD ZONE TO MICHCON WINTER TRANSPORTATION SPREAD
59
Max Min Avg
2013-14 30.71$ (15.57)$ 2.38$
2012-13 0.32$ (0.08)$ 0.08$
2011-12 0.33$ (0.04)$ 0.13$
2010-11 0.44$ (1.07)$ 0.09$
TRUNKLINE Z1A TO CONSUMERS GAS WINTER TRANSPORTATION SPREAD
60
Max Min Avg
2013-14 32.47$ 0.04$ 3.38$
2012-13 0.31$ 0.06$ 0.16$
2011-12 0.25$ 0.02$ 0.15$
2010-11 0.30$ 0.02$ 0.14$
1,200,000
1,250,000
1,300,000
1,350,000
1,400,000
1,450,000
1,500,000
1,550,000
1,600,000
09 10 11 12 13 09 10 11 12 13 10 11 12 13 14 10 11 12 13 14 10 11 12 13 14
November December
January February March
WINTER PEAK DAYS THROUGH HOUSTONIA
WINTER PEAK DAYS THROUGH INDEPENDENCE
600,000
800,000
1,000,000
1,200,000
1,400,000
09 10 11 12 13 09 10 11 12 13 10 11 12 13 14 10 11 12 13 14 10 11 12 13 14
November December
January February March
GREAT LAKES ICE COVER 88%
66
AVERAGE WINTER ICE COVERAGE
67
THIS WINTER ICE COVERAGE
68
LATE SEASON ICE COVERAGE
69
CUSTOMER STORAGE
73
POLAR VORTEX
SUSTAINED POLAR VORTEX
77
HOW CAN WE HELP YOU BE PREPARED FOR NEXT WINTER…
• Storage services
– Field Zone
– Market Zone
• Transportation Services
– PEPL long haul
– PEPL short haul
– TGC
• Combination
78
LET’S TALK A LITTLE SUMMER
• Extensive summer maintenance schedule on PEPL and TGC
• Posting include regular ongoing maintenance in addition to our pipeline integrity program
• Postings indicate work with the potential to impact shippers
• Any potential firm service interruption will have corresponding critical posting
• Outage schedule found on our website
• Outage schedule is updated weekly
79
PIPELINE MAINTENANCE
80
Pipeline maintenance
IMPLEMENTATION OF ENHANCED PIPELINE INTEGRITY PROGRAM
• Continuation of the regulatory required integrity management and assessment plan within HCA’s
• Plus comprehensive long-term plan for all pipeline facilities and all integrity threats
• Multi-year plan for in line inspections/hydrotest/anomaly investigations
• Maintain/improve prevention and mitigation strategies for various threats with particular attention to external corrosion
• Apply lessons learned from incidents across the entire system including other interstate and intrastate pipeline systems
81
WHAT DOES THIS MEAN TO YOU…
• 2014 HCA and System Integrity Projects Planned
– 801 miles in-line inspections (26 segments)
• PEPL 492 miles (22 segments)
• TGC 309 miles (4 segments)
– 70 scheduled anomaly investigations
• PEPL 57 anomaly excavations
• TGC 13 anomaly excavations
– 131 miles of hydrostatic pressure testing (13 segments)
• PEPL 129 miles (11 segments)
• TGC 2 miles (2 segments)
82
WHAT DOES THIS MEAN TO YOU…
83
ULTIMATELY SAFER AND MORE RELIABLE PIPELINES SERVING
YOUR MARKETS
QUESTIONS/ OPEN TABLE SESSION
Jackie Butler, Senior Director – Marketing
How did your system perform?
PAST WINTER – LESSONS LEARNED
• Demand levels
• Planning/forecasting
• Facilities
What were your biggest challenges during this past winter?
What lessons were learned?
What would you do differently next time?
GAS/ELECTRIC COORDINATION
What gas and/or electric industry changes (services and/or facilities) would promote greater use of natural gas for electric generation in your region?
What issues/challenges do you anticipate with proposed changes to the gas day and nominations cycles?
How did the past winter’s capacity restrictions and/or limited secondary capacity affect electric reliability and/or cost in your region?
WE THANK YOU FOR YOUR BUSINESS AND HOPE YOU ENJOY
THE REST OF YOUR STAY.