Monthly Market Risk Update: March 2024 [SlideShare]
EP4_25_08ClearyPlattsRockiesConf
1. Jim Cleary
President, El Paso Western Pipelines
Platts Conference, Rockies Gas & Oil
April 25, 2008
2. Cautionary Statement Regarding
Forward-looking Statements
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.
2
4. El Paso Western Pipelines
Big Horn
Powder River
Wind River
Green River
Denver-Julesburg
Uinta
Piceance
Anadarko
Raton
San Juan
Permian
WIC
CIG
EPNG
Mojave
Cheyenne Plains
Note: Includes El Paso Corporation and El Paso Pipeline Partners, L.P.
4
5. • 680 miles of 42-inch Opal to Malin
• 1.2 Bcf/d expandable to 2.0 Bcf/d
• 1,440 psig MAOP
Ruby Pipeline Map • Compression: Head Station (76,500 hp) & Mid
Point (30,000 hp) (possibly 3rd location)
• Measurement – 9 Locations
• 64% +/- Public Land
• 2 National Forests: Cache and Fremont-Winema
• 5 BLM Offices
OREGON
GTN • Mostly Remote / Unpopulated
Fremont-
Wenima
National
Malin IDAHO
Forest
WYOMING
PG&E
RUBY Opal Hub
Tuscarora
Cache CIG
WIC
National
Forest
CALIF.
Paiute
Cheyenne
U TA H
Plains
NEVADA
Kern River
COLORADO
5
7. Rockies versus Western Canada
Long-Term Production Trends
Bcf/d Canadian Peak
- 2001 Peak
18 - 17 Bcfd
El Paso High Case
16
Best fit of Current Trend:
14 - 2033 Peak
- 15 Bcfd Production
12
El Paso Base Case
10
8
6
Best Fit Curves Assumes:
4 - Gaussian Curve
- 340 EUR
2 - Few environmental constraints
Forecast
-
1970 1990 2010 2030 2050 2070 2090
7
9. Historical and Forecasted Gas Demand
(Northern CA and the Pacific Northwest)
MMcf/d
3,000
2,500
2,000 Forecast: (2008–2016)
PG&E Planning Area
CAGR = .39%
Growth Volume = 42 MMcf/d
*Source: California Energy Commission
2008-2018 California Energy Demand
1,500
(Staff Revised Forecast Nov. 2007)
1,000
Forecast: (2008–2016)
Pacific Northwest CAGR = 2.24%
500
*Source: EL Paso Macro Model (Oregon & Washington) Growth Volume = 195 MMcf/d
0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
9
10. Northern/Central California
Market Detail
• The northern/central California North to South flow
market is served by PG&E OREGON
utilization typically
GTN below 70% due to
– PG&E system is supplied from reduced Canadian
Malin
Canada and US (Rockies, San imports
Juan and Permian Basins) 2.0 Bcf/d
/40 e
400 E Lin
– Reduced imports have resulted in
1
Tuscarora
PG&E Lines 400/401 (north to
&
PG
south flow) being underutilized NEVADA
s
Sacramento
s
• Current California pipeline s
s
s
infrastructure allows for limited
San Francisco
gas deliveries from southern to CALIFORNIA
Kern
northern California
ARIZONA
1.1 Bcf/d
Topock
• SoCal system has limited PG&E Line 300
physical ability to flow LNG from SoCal Blythe
Los Angeles
Mexico or Southern California North
into PG&E SDG&E Baja
San Diego
Baja Norte
Costa Azul LNG
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12. Rocky Mountain Production
(Volumes are Wellhead – Measured in MMcfd)
14,000
Big Horn Wind River Forecast
12,000 Green River Overthrust
Powder River Uinta 3.28 Bcf/d of
10,000 growth 2006-2016
Piceance Denver
8,000
6,000
Forecast by 2016:
4,000
High Case 13,278
Mid Case 11,860
2,000 Low Case 10,442
0
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
2016
1990-2006: Wellhead total data from IHS database
2007-2015: El Paso forecast
12
13. Cheyenne Basis to Henry Hub
vs. Export Load Factors
Jan 1995 – Feb 2008
3.50
3.00
Historical Relationship
2.50
Load Factor ~84%
Dollars per MMBtu
HH Hub Basis ~ $0.61
2.00
1.50
1.00
0.50
0.00
60.0% 65.0% 70.0% 75.0% 80.0% 85.0% 90.0% 95.0% 100.0%
-0.50
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14. Rockies Gas Balance
Annual Average Wellhead Production Forecast (MMcf/d)
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Dry Production 6,325 6,694 7,288 7,875 8,324 8,683 8,979 9,232 9,451 9,641 9,807
Local
Consumption* 1,591 1,637 1,613 1,695 1,625 1,637 1,652 1,657 1,690 1,721 1,750
Available for
Export 4,734 5,057 5,675 6,180 6,699 7,046 7,328 7,575 7,760 7,920 8,057
Total Export
Capacity 5,397 6,030 6,200 6,200 8,070 8,070 8,070 9,270 9,270 9,270 9,270
Capacity
Surplus 663 973 525 20 1,371 1,024 742 1,695 1,510 1,350 1,213
% Surplus
Capacity 12.3% 16.1% 8.5% 0.3% 17.0% 12.7% 9.2% 18.3% 16.3% 14.6% 13.1%
- Expansions (Includes Ruby)
Need for Additional Export Capacity
Possible Need for Another Expansion by 2013-2014
*Source – El Paso supply Forecast
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15. Rockies Supply vs.
Regional Export Capacity
MMcf/d
10,000
Ruby
REX West High Case
1200 expansion
1800 expansion
9,000
Cheyenne Plains
100% LF
170 expansion
8,000 Cheyenne Plains
560 expansion
7,000
Expansion needed:
6,000 85% LF Base Case
2009-2010 if 85% LF
5,000
2013-2014 if 85% LF
Supply Available for
Export
4,000
Base Case
3,000
2,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
*Source – El Paso supply Forecast
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17. Development
• In development for over a year
• Analyzed 3 major routes & 4 variations of the preferred route
• Route selected after extensive agency/stakeholder discussions
• BLM application filed: November 2007
• Precedent agreement (PA) signed with PG&E (anchor shipper) and
two others for 650 Mdth/d: December 2007
• CPUC filing for approval of PG&E PA: December 2007
• FERC Pre-filing process began: January 2008
• Binding Open Season began: February 2008
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18. Boots On the Ground
• Centerline and detailed surveys underway
• Survey permission received from Land-owners
and the BLM for 75% of the route
• 25% of ROW is already surveyed
• 10 Open Houses covering the entire route from
Opal, Wyoming to Malin, Oregon
• 6 Scoping meetings with BLM
18
19. Looking Forward
• CPUC Ruling Expected: October 2008
• FERC Filing: January 2009
• In Service Target: March 2011
19
20. Conclusion
• Canadian export decline suggests the Western Markets
require supply diversity
• Rockies Supply push requires additional infrastructure in
the next few years
• Considerable progress has already been made on Ruby
Pipeline development
• Ruby is the project that can meet the market’s timeline and
needs
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