BUSINESS SESSION I
• Welcome
• Energy Transfer Update
Beth Hickey – Sr. Vice President, Interstate Pipelines
• Commercial Update
Joey Colton – Sr. Director, Marketing & Optimization
• Interconnect Update
John Reid – Sr. Director, Business Development
• Market Services
Brad Holmes – Vice President, Market Services
2
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.
3
ENERGY TRANSFER
UPDATE
Beth Hickey,
Senior Vice President – Interstate Pipelines
ENERGY TRANSFER ASSETS
ETP Assets
SXL Assets
Development Projects
Marcus Hook
Eagle Point
Nederland
Lake Charles LNG
Rover Pipeline
Dakota Access Pipeline
Lone Star Express Pipeline
Crude Conversion Pipeline
REGENCY MERGER
ETP Assets
Regency Assets
Lone Star Pipeline
ETP Storage
ETP Plant Facility
Lake Charles LNG
Regency Plant
Lone Star Storage Facility
Lone Star Fractionator
6
REGENCY MERGER
 PEPL/Trunkline and Rover pipelines
are highly complementary to
Regency’s asset position
 Capitalize on ETP’s unique franchise
and broad capabilities with SXL’s
“Mariner East/West” franchise
 Ability to replicate in this region:
Utica
-
Integrated Midstream / NGL
business model
-
Existing Mariner South NGLs
export model with SXL at
Marcus Hook
ETP Assets
Marcus Hook
Regency Assets
Eagle Point
SXL Assets
SXL Storage
SXL Inkster Cavern
Marcellus
7
NEW ADDITIONS TO OUR
INTERSTATE FAMILY
Midcontinent Express Pipeline
• Placed in service in 2009
• 500 miles; 1.4 Bcf/day capacity
• Access to supply from the
Midcontinent region and the Barnett
Shale
• Interconnects with multiple
interstates (1)
• 50/50 joint venture between Energy
Transfer and Kinder Morgan
(operator)
Gulf States
Perryville
Gulf States Transmission
• 10 miles from East Texas processing
plants to just across the Louisiana
border (interconnect with RIGS)
(1) ANR, CenterPoint, Columbia Gulf, Destin, NGPL, Sonat, Tennessee,
Texas Eastern, Texas Gas, Transco
8
INTERSTATE COMMERCIAL TEAM
Beth Hickey
Senior Vice President
Market Services
Panhandle / Trunkline /
Sea Robin
Transwestern / Tiger / FEP /
Gulf States
Regulatory Affairs
Florida Gas Transmission
Marketing and
Business
Development
Marketing and
Business
Development
Marketing and
Business
Development
Gas Control and
Facility Planning
Gas Control and
Facility Planning
Gas Control and
Facility Planning
9
COMMERCIAL
UPDATE
Joey Colton,
Senior Director – Commercial Marketing & Optimization
ROVER PIPELINE
Dawn
Rover - New Build
Rover – Firm Capacity on
Vector
Rover is a new 3.25 Bcf/day interstate pipeline designed to
transport from processing facilities in the prolific Marcellus and Utica
Shale areas to market hubs that can reach Midwest, Gulf Coast,
Canadian, and U.S. Northeast markets.
11
ROVER – SOUTHBOUND PATH
Defiance to Trunkline
To Trunkline Zone 1A
Rover Pipeline
Panhandle Eastern
Trunkline Gas
12
ROVER SUPPLY ZONE
CAPACITIES (MMCF/D)
Fox
1,000
Cadiz
1,250
Majorsville
400
Seneca
800
Clarington
750
Sherwood
800
13
ROVER TIMELINE
July
2014
FERC PreFiling Request
February
2015
Filed FERC
Certificate
Application
November
2015 – January
2016
Anticipated
Issuance of
FERC
Certificate
1Qtr
2016
Construction
Authorization
Anticipated
December
2016
In Service to
Midwest Hub
June
2017
In Service to
Market Zone
North
For more information visit www.roverpipelinefacts.com
14
TRUNKLINE ABANDONMENT
July
2012
Initial FERC
filing for
Abandonment
April
2013
FERC issued
EA
November
2013
FERC
Approved
Abandonment
January
2014
February
2014
December
2015
Abandonment
TC Filed
to be
FERC Approved
Implementation
Implementation Completed no
Plan
Later than
Plan
12/31/2015
15
LAKE CHARLES LNG
•
Liquefaction transforms Lake Charles LNG into a bi-directional facility
capable of importing and exporting LNG
•
Second largest liquefaction facility planned in U.S. after Cheniere’s
Sabine Pass
•
BG responsible for design, construction management, operations and
off-take
– Will utilize ETP’s pipeline network to deliver gas to the facility
– Minimum 25yr firm transportation contract
•
DOE FTA & non-FTA approval conditionally granted
•
Final investment decision expected by 2016
•
Train 1: commissioning & start-up no later than Q2 2020
•
Trains 2 & 3: subsequent in-service at ~6 month intervals
16
LAKE CHARLES LNG
TIMELINE
July
2011
DOE FTA
Approval
August
2013
DOE Non-FTA
Approval
October
2013
March
2014
2016
2020
FID
PDA
FERC Filing
Construction
Anticipated to
begin in 2016
Train 1 Inservice
Anticipated
Q1/Q2
17
WHAT’S NEXT?
Trunkline
Sea Robin
18
INTERCONNECT
UPDATE
John Reid,
Senior Director – Business Development
PANHANDLE –
NEW SUPPLY CONNECTIONS
More than 800 MMcf/d of recent supply additions with an
additional 140 MMcf/d possible by 1st Quarter 2016
20
PANHANDLE
TENAWA HAVEN PROCESSING PLANT
• 1.3 Bcf/day straddle plant - will process the entire gas stream going through
PEPL’s Haven, Kansas compressor station
• Fully operational May 2015
Haven
21
PANHANDLE
&Assets
TRUNKLINE
Interstate Pipeline
MARKET AREA SUPPLY
Marcellus/
Utica
PEPL / REX
PEPL / TETCO
TGC / REX
•
TETCO Gas City (PEPL) – receipt capacity of 425,000 Dth/d; Q4 2015
•
REX Putnam (PEPL) – increase to 275,000 Dth/d; Q3 2015
•
REX Douglas (TGC) – increase to 275,000 Dth/d; Q3 2015
22
TRUNKLINE –
CREOLE TRAILS DELIVERY POINT
Trunkline
New 1 Bcf/d
delivery meter
23
MARKET
SERVICES
Brad Holmes,
Vice President – Market Services
INTERSTATE
MARKET SERVICES TEAM
Brad Holmes
Vice President
Lindy Donoho
Contract Admin
Richard Moreno
Panhandle / Trunkline /
Sea Robin
Points
Nominations
Capacity
Release
M+ Support
NAESB
Kathy Washington
Transwestern / Tiger /
FEP/Gulf States
Cynthia Rivers
Florida Gas
Transmission
Customer Service
Noms &
Scheduling
Customer Service
Noms &
Scheduling
Accounting
Accounting
Transfer Support
Transfer Support
Accounting
25
INTERSTATE
SYSTEM MIGRATION
2015
PEPL
TGC
SER
PEPL
TGC
SER
Gulf States
2016
PEPL
TGC
SER
Gulf States
Rover
2017
PEPL
TGC
SER
Gulf States
Rover
FGT
2018
PEPL
TGC
SER
Gulf States
Rover
FGT
Transfer
FGT
TW
FEP
Tiger
Transfer
FGT
TW
FEP
Tiger
Transfer
FGT
TW
FEP
Tiger
Transfer
TW
FEP
Tiger
TW
Tiger
FEP
26
MESSENGER +
27
MESSENGER +
28
FERC INITIATIVE ON
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
•
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
29
FERC NOPR AND 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
30
CURRENT NAESB NOMINATION
AND SCHEDULING TIMELINE
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
31
NAESB SCHEDULE
GAS ELECTRIC HARMONIZATION (GEH) FORUM - 2014
•
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 4th – 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
•
November 27th - Comments on NOPR Due At FERC
32
NOMINATION AND SCHEDULING
TIMELINE BY CONSENSUS AT NAESB
Nomination Cycle
Nomination
Deadline (CCT)
Notification of
Schedule (CCT)
Bumping of
Interruptible
Transportation (IT)
Timely
1:00 p.m.
5:00 p.m.
N/A
Evening
6:00 p.m.
9:00 p.m.
Yes
Intra-Day 1
10:00 a.m.
1:00 p.m.
Yes
Intra-Day 2
2:30 p.m.
5:30 p.m.
Yes
Intra-Day 3
7:00 p.m.
10:00 p.m.
No
No consensus was reached on the Start of the Gas Day
33
ORDER 809
(Issued April 2015)
• Start of the Gas Day remains at 9:00 AM
• Tariff records to be filed February 1, 2016
• Implementation on April 1, 2016
34
QUESTIONS?
35
BUSINESS SESSION II
• Welcome
• Market Outlook
Shannon Spencer – Manager, Market Analysis
• Guest Speaker
Michelle Bloodworth – MISO, Executive Director, External Affairs
36
MARKET
UPDATE
Shannon Spencer,
Manager – Market Analysis
MARKET SPECULATIONS
BECOMING REALITY
• Oil and gas supply boom: led to plummeting prices
– How have producers responded?
• Demand renaissance: still on the horizon but the view is
clearer
• Pipeline re-plumbing: in service or underway
38
RIGS DROP BUT PRODUCTION
MARCHES ON
U.S. Rig Count
1,800
•
Marcellus is up 3.3 Bcf/d from last
April despite the lowest rig count
in the play in four years
•
Utica production increased 26%
Oil
1,600
1,400
1,200
1,000
(Q414 vs. Q413)
800
600
Gas
400
•
200
Oklahoma production up 0.5 Bcf/d
in 2014
Source: Baker Hughes
May-15
Apr-15
Mar-15
Feb-15
Jan-15
Dec-14
Nov-14
Oct-14
Sep-14
Aug-14
Jul-14
Jun-14
May-14
Apr-14
Mar-14
Feb-14
Jan-14
0
– averaged 6.3 Bcf/d in 2014, the
highest since 1990
– Jan-Feb ‘15 averaging 0.5 Bcf/d
higher than the same period last
year
39
PRODUCER RESPONSES
• Drilling but not producing (waiting on price or infrastructure)
• Refrac of existing wells
• Longer laterals
• Faster drilling times
• High grading
• Pad drilling
40
SUPPLY READY TO REBOUND
Uncompleted well backlog by play
Well backlog inventory has grown from
3,000 at the beginning of the year to nearly
5,400 now*
Baker Hughes estimates that up to 20% of
new wells being drilled this year have not
been completed
Draw-down of these uncompleted wells
supports supply growth later this year
and into next year…
* As of April 2015. Per Wood Mackenzie
41
SHORT-TERM PRODUCTION
OUTLOOK
80
70
60
Northeast
50
Gulf of Mexico
40
Gulf Coast
30
Mid-Con
20
Permian
10
San Juan
Rockies/West
-
Source: Wood Mackenzie North American Gas Markets ST Outlook, April 2015
42
WE’RE NOT RUNNING OUT OF
GAS ANYTIME SOON
Source: Potential Gas Committee, released April 8, 2015.
EIA Proved Reserves latest update (2013): 333.8 Tcf.
43
OFFSHORE SUPPLY:
OVER? DID YOU SAY OVER?
•
Gulf of Mexico activity has been remarkably
resilient with several new developments and
more expected within the next 18 months
•
Recent major developments:
• Delta House (LLOG Exploration1/) in
Mississippi Canyon
•
•
•
•
First production on April 17th
Estimated 350 Bcf of gas
Targeting peak rate of 154 MMcf/d by 2017
Hadrian South (ExxonMobil2/) in Keathley
Canyon
•
•
•
First production on March 30th
Estimated 612 Bcf of gas
Targeting peak production of 300 MMcf/d by
2016
1/ Joint venture partner is Blackstone Energy Partners, co-owners are Ridgewood Energy,
Red Willow Offshore, LLC, Calypso Exploration, LLC and Deep Gulf Energy II, LLC,
2/ Petrobras and ENI have ownership interest.
44
WHAT ABOUT DEMAND?
Power
•
•
MATS - went into effect April 16th
Clean Power Plan - EPA to issue final rules this Summer
Industrial
•
Final Investment Decisions being made
•
Dow Chemicals: “We’re putting $6 billion here in the U.S. Gulf Coast, betting that
the gas advantage maintains for us to get a suitable return on that investment,
which is into the next decade” 1/
•
Raymond James: “we project a total of 6 Bcf/d in incremental demand over the 2014-2019
timeframe”.
– Energy Stat of the Week, May 4, 2015
LNG
•
We are no longer years away, but months away
•
Other projects are further along with contracting, FERC, DOE
1/ Doug May, Dow’s business president of olefins, aromatics, and alternatives, during the Kellogg School of Management Energy
Conference at Northwestern University.
45
MEXICO
POWER AND PIPELINE GROWTH
•
Mexico is in the midst of
one of the largest
pipeline construction
periods in its history
•
The country has dozens
of new gas-fired power
plants to support growth
and replace fuel oil
•
Sempra announced
plans to make Costa
Azul an export facility
46
MEXICO
INDUSTRIAL GROWTH
•
Major car manufacturers are moving assembly operations to Mexico
•
Production has doubled in the last five years
•
The country is currently the fourth largest exporter of cars and trucks and the 8th
largest producer
•
•
Cheap labor
•
Free Trade Agreements
More than $20 billion in new investment as of mid-2014
•
Nissan has 21 million square foot factory
•
Announcements last year included BMW, Kia, Mercedes, Infiniti, Audi
•
Announced last month:
•
Toyota - $1 billion to make Corollas in Central Mexico
•
Ford - $2.5 billion to expand existing plant and build another
•
Jaguar/Land Rover - considering a plant to build Land Rovers
47
MEXICO
EXPORT FORECASTS
US Net Exports to Mexico
Forecast Comparison
6
5
ICF
Bcf/day
4
Simmons
WoodMac
3
Mexican exports are
averaging 2.4 Bcf/d so far
this year
• 0.6 Bcf/d higher than the
first four months of 2014
Another 3 Bcf/d of pipeline
exit capacity is coming online
through 2017
EIA
Source: PointLogic
2
Consensus 2.5 – 3.5 Bcf/d (avg.) by 2016
1
2014
2015
2016
2017
2018
2019
2020
Sources: North American Gas Markets Long-Term Outlook 2H14 (Wood Mackenzie), Annual
Energy Outlook 2014 (EIA), Range Resource’s investor presentation (Simmons & Co.);
FERC presentation (ICF).
48
INFRASTRUCTURE
• First wave of projects –
get out of the Northeast
• Second wave of projects
– get to the export points
~25 Bcf/d* of exit
capacity planned to
the West or South
* Represents announced projects; does not
include backhauls using existing capabilities
49
THANK YOU!
WE APPRECIATE
YOUR BUSINESS.