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Rick MoncriefExecutive Vice PresidentBusiness Development
Caiman Energyd
Marcellus MidstreamMarch 2012
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Today’s Topics
• Chicken or the Egg
• Caiman Development
• Marcellus Volume Ramp-Up
• Residue Takeaway
• NGL Takeaway
Chicken or the Egg
3
What Comes First?
Midstream – The Chicken?
Confidence in reserves can not be determined without infrastructure to allow production data
Producer – The Egg?
Confidence in reserves underpins midstream development
Producers and Midstream operators must determine how to provide
appropriate assurances to allow for timely infrastructure development
Chicken or the Egg
4
1. Represents 4-month moving average. Counties referenced include Brooke, Marshall, Wetzel, Ohio and Tyler Counties in West Virginia and Monroe County in Ohio.
Rapid increase in activity has followed as processing infrastructure comes online (1)
0
3
6
9
12
15
18
Jan-
09
Mar
-09
May
-09
Jul-0
9
Sep-0
9
Nov-0
9
Jan-
10
Mar
-10
May
-10
Jul-1
0
Sep-1
0
Nov-1
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Jan-
11
Mar
-11
May
-11
Jul-1
1
Sep-1
1
Nov-1
1
(# o
f Act
ive
Rig
s)
Fort Beeler in service
Rig Count in Caiman Footprint Caiman Producer Permits
101118
187
0
50
100
150
200
2009 2010 2011
(# of Permts)
Chicken or the Egg
5
Marcellus gas development can be dramatic once infrastructure in place
Using 6.2 Bcf type curve, Producers can generate 100 MMcfd running 1 rig
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1
2
3
4
5
6
MM
cd/d
Type Curve (5,000 Ft. Laterals)
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10
20
30
40
50
60
70
80
90
100
MM
cd/d
One Rig Volumes (5,000 Ft. Laterals)
Pipeline Complete Dedicated AcreagePipeline Under Construction Acreage of Producers with
VolumetricPipeline Proposed Processing Commitments (1)
NGL Pipeline Under Construction Ethane Pipeline Under Construction
___________________________1. Represents acreage of Chesapeake and CONSOL/Noble that is currently not dedicated to Caiman but for which Caiman has volumetric commitments from each company. Acreage estimate based on information available to Caiman.2. Primary residue gas takeaway pipeline owned and operated by Spectra.
Caiman has a franchise position in the rich gas area of the Marcellus Shale
Franchise system: ~231,000 dedicated acres
Residue Takeaway capacity via TETCO
Fort Beeler NGL Processing and De-ethanization Complex 545 MMcf/d of gas processing capacity by Q3 2012 30,000 Bbls/d of de-ethanization in-service by mid 2013
Moundsville Fractionation 72,500 Bbls/d of C3+ fractionation capacity by Q4 2013
Taylor NGL Processing and De-ethanization Complex 420 MMcf/d gas processing capacity in-service by year-end 2013 15,000 Bbls/d of de-ethanization in-service by early 2014
200 miles of gathering lines by year-end 2013 Over 50 miles of condensate gathering lines by year-end 2013
50 miles of ethane lines by year-end 2013
$1.3 billion invested capital in infrastructure by year-end 2013
Substantial organic growth opportunities from liquids rich Marcellus and Upper Devonian Shales in existing acreage
Adjacent to rich gas Utica Shale in Ohio
Texas Eastern (TETCO) (2)
Marshall
Greene
TylerWetzel
Monroe
WashingtonOhio
Marion
Moundsville Complex(Fractionation)
Fort Beeler Complex(NGL Processing & De-ethanization)
Belmont
1100
Btu
1350
+ B
tu
TETCO
Doddridge
Taylor Complex(NGL Processing & De-ethanization)
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Caiman Eastern Overview
+Rich Marcellus Processing Capacities
___________________________Source: MarkWest capacities taken from Chickasaw Presentation in December 2011Source: Rex Energy Corporate Presentation in March 2012.
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200
400
600
800
1,000
1,200
1,400
Caiman Energy MarkWest REX / Stonehenge
• Total rich Marcellus processing capacity will reach 2 Bcf by year-end 2013
• Caiman will represent ~ 40% of this capacity
• 300% increase since year-end 2010
Rich Marcellus play one of the most prolific and economical natural gas shale basins in NA
+Caiman Processing
Processing Facilities
Cryo I – 125 MMcf/d – Fort Beeler Complex – April 2011
Cryo II – 210 MMcf/d – Fort Beeler Complex – February 2012
Cryo III – 210 MMcf/d – Fort Beeler Complex – August 2012
Cryo IV – 210 MMcf/d – Fort Wetzel Complex – March 2013
Cryo V – 210 MMcf/d – Fort Wetzel Complex – October 2013
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200
400
600
800
1,000
1,200
1,400
MM
cf/d
Forecasted Processing Volumes
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10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Bbls
/d
9
Caiman Fractionation Development
Fractionation Facilities
Frac I – 12,500 Bbls/d – Moundsville Complex - March 2012
Frac II – 30,000 Bbls/d – Moundsville Complex – October 2012
Frac III – 30,000 Bbls/d – Moundsville Complex – October 2013
Forecasted Fractionation Volumes
+Residue Takeaway
TETCO (Team 2012 Project) by Spectra
Adds 200 MMcf/d – Late 2012
Atlantic Access by WMB
Adds 350 MMcf/d – Late 2014
Appalachian Gateway
Dominion Expansion – Late 2012
REX Northeastern Express
Proposed extension of Rockies Express
Pipeline
NiSource West Side Expansion
Proposed expansion – Late 2014
Appalachian Gateway
Atlantic Express
REX Northeastern ExpressTETCO (Team 2012)
EQUITRANSNiSource
+NGL Takeaway
Ethane
Residue takeaway waivers
NOVA Contracted to take 50,000 Bbl/d from the
Marcellus Caiman has contracted
15,000-20,000 Bbls/d of this takeaway
TEPPCO 190,000 Bbls/d of takeaway capacity Other opportunities
Shell Cracker Shell recently announced plans to further
evaluate an ethane cracker in Beaver County, PA
Multiple ethane alternatives have materialized for Marcellus producers
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0
50,000
100,000
150,000
200,000
250,000
300,000
2011 2012 2013 2014 2015 2016
(Bbls/d)
0%
15%
30%
45%
60%
(%)
NGL TakeawayDrastically changing NGL supply / demand market in the Northeast
Surging NGL volumes changing
market dynamic in the northeast
Midstream Focus on:
• Value Maximize value for each
individual NGL component
• Take-away Keep gas and liquids
flowing
U.S. Gas Plant Fractionation: PADD I Market Share (1)
PADD I Mixed NGL Supply (1)
~54% CAGR 2011-2016
+Conclusion
Chicken or the Egg Dilemma
• Marcellus beyond this issue
• Utica will be able to utilize Marcellus infrastructure to avoid this hurdle
Downstream Infrastructure Expansions Progressing
• With Marcellus proven and Utica proving-out, necessary downstream projects emerging
Residue expansions
NGL takeaway alternatives
Further expansions / development will be required as Utica volumes develop
Everything Midstream
www.CaimanEnergy.com214.580.3700
Rick MoncriefExecutive Vice President