Date post: | 14-Jul-2015 |
Category: |
Business |
Upload: | plg-consulting |
View: | 2,289 times |
Download: | 0 times |
1
Logistics Engineering Supply Chain
Stifel Capital Markets Conference Call
December 9, 2013 | 11:00 AM EST
Dial In Numbers
(888) 267‐2848 (Domestic)(973) 413‐6103 (International)Passcode: 641287
2
Crude by Rail Update
Graham BrisbenCEO
Taylor RobinsonPresident
Shale Gas Implications for US Manufacturing Renaissance
Introduction
Stifel Nicolaus Capital Markets Conference CallDate: Monday, December 9, 2013Time: 11:00 AM ESTLength: 60 minutes
HostMichael Baudendistel, CFA,Transportation Analyst
Dial In Numbers(888) 267‐2848 (Domestic)(973) 413‐6103 (International)Passcode: 641287
Replay(800) 332‐6854 (Domestic)(973) 528‐0005 (International)Passcode: 641287
3
About PLG Consulting
» Boutique consulting firm with team members throughout the USEstablished in 2001Over 80 clients and 200 engagementsSignificant shale development practice since 2010
» Practice AreasLogisticsEngineeringSupply Chain
» Consulting services Strategy & optimizationAssessments & best practice benchmarkingLogistics assets & infrastructure developmentSupply Chain design & operationalizationM&A/investments/private equity
» Specializing in these industry categories: EnergyBulk commodities Manufactured goodsPrivate Equity
Partial Client List
4
Shale Gas Implications for US Manufacturing Renaissance A detailed analysis of shale’s direct impact to the renaissance of US manufacturing
Real World ExperienceStrategic PerspectiveDepth of Analysis Hands-on Engagement
Presented by Taylor RobinsonDecember 9, 2013
PLGConsulting.com
Logistics Engineering Supply Chain
4
5
Shale Gas Is More Important to US Industry Competitiveness Than Oil
» Natural gas is 4X cheaper than oil on a BTU-basisInnovation will convert more transportation fuels and other energy requirements to natural gas
» US electricity prices are the lowest in the industrial worldUS industries are now the power cost leadersGas drives an increasing share of the US electricity generation capacity
» US gas downstream products will have world class competitiveness - are the “building blocks of manufacturing”
ChemicalsResinsCompounds
» Natural gas is a cleaner burning fuel compared to other hydrocarbons
$0
$5
$10
$15
$20
$25
$30
2005 2006 2007 2008 2009 2010 2011 2012 2013
Oil vs. Gas Price on BTU Basis
WTI Crude ($/MMBTU)
Natural Gas ($/MMBTU)
Source: EIA
31¢ 30¢
18¢
13¢9¢
7¢4¢ 3¢
05101520253035
¢/kW
h
AAverage Cost of Electricity (2012)
6
US Shale Gas History
Source: Bentek, September 2013
Rig Count by Class vs. Gas ProductionGas rig count has decreased significantly, but gas production has increased – Why?
» Shale gas prolific supply growth in 2007 & 2008 caused a dramatic price drop in 2009, rigs shifted to oil & liquids
» Drilling productivity continues to lower costs and increase production with less rigs
» And the Liquids (Crude, NGL) wells produce dry natural gas as a by-product
Source: Southwestern Energy investor presentation, September 2013
Representative Productivity Gains – Fayetteville Shale Play
7
» Abundant US gas supply for the foreseeable futureLow cost reserves in accessible locations near populationUS will become a net gas exporter by 2020
» US gas demand will grow gradually due to:Coal-fired generation plant converting to gasMore industrial use – steel, fertilizer, methanolMexican export via pipeline and LNG export overseasIncreasing use as transportation fuel
» US gas cost competitiveness is sustainableSupply will overwhelm demand as prices approach $5US government will likely limit LNG export to protect US from world gas market price
Source: BENTEK, September 2013
US Shale Gas Future
US Natural Gas Supply/Demand
Annual Average Henry Hub Spot Natural Gas Prices
Source: EIA, Annual Energy Outlook, 2013
2011
$pe
r M B
tu
8
» Marcellus is gas play of choiceMassive scale near highest US population densityRapid increase in production – now 5th largest production “country” in the worldLow cost wells with high productivity enables dry gas profitability for efficient drillers at current priceExport potential for LNG & NGL from Marcus Hook and other export terminalsHowever, no ethane crackers in the region, so gas NGLs need to be piped to Gulf region for further processing
Marcellus: Future Gas Play of Choice
Source: Bentek, September 2013
Shale Gas Development Rates
Source: Bentek, September 2013
Currently, onlyprofitable dry
gas play
Shale Play IRR
9
Shale Gas Downstream Products
» Shale crude oil makes the headlines, but shale gas & NGLs will drive US industry and manufacturing cost competitiveness and growth
Other Refined Products
Feedstock (Ethane)
Feedstock (Propane, Butane, etc)
Home Heating (Propane)Home Heating (Propane)
Other FuelsOther Fuels
GasolineGasoline
Diesel, Jet FuelDiesel, Jet Fuel
Inputs >> Wellhead >> Direct Output >> Thermal >> Fuels >> Raw Materials >> Downstream Products
Gas
NGLs
Crude
Proppants
OCTG
Chemicals
Water
Cement
GenerationProcess Feedstocks
SteelSteel
Fertilizer (Ammonia)Fertilizer (Ammonia)
MethanolMethanol
Chemicals and ResinsChemicals and Resins
Petroleum ProductsPetroleum Products
PetrochemicalsPetrochemicals
Chemicals and Resins
10
» NGL = Natural Gas Liquids or “Wet Gas”Prevalent in large Crude plays as a by product – Bakken, Eagle Ford, PermianProlific areas in eastern Marcellus and UticaAdds profitability potential for oil & gas production companies
» NGLs require processing and fractionationCapacity coming on line quickly in multiple plays3-9 gallons/MCF (thousand cubic feet)– Ethane ~42-65%– Propane ~28%– Normal Butane ~8%– Iso-Butane ~9%– Condensate ~13%
» NGL supply growth will outpace downstream product demand in North America
Ethane currently “rejected” in large volumes due to low pricesAs processing capacity increases, export of downstream products will grow significantly due to cost advantage
NGL Boom In Progress
11
Ethane is the “Building Blocks” for Manufacturing
Feedstock/Intermediary
Finished Products
12
Shale Gas Phased Impact To US Industrial & Manufacturing Cost Competitiveness
2008 2010 2012 2014 2016 2018 2020
Phase I ‐ Gas & Power‐intensive Industries: Steel, Fertilizer, Methane
Phase II ‐ Downstream Products: Resins, Chemicals
Phase III – “Manufacturing”: Raw material cost driven
» Phase I & II expansion, brownfield and greenfield plants announced – 2014-2017 investment peak
Nearly $90B of chemical industry investments have been announced with more announcements expectedForeign investment is over 50% of announcedNot all of the announced factories will be built or be delayed due to regulatory issues
» Ethane crackers are vital to downstream growth10 expansions and 7 greenfield crackers announced3-5 world scale crackers likely to be built
Shale Shale GasBoom
13
Phase I – Gas- and Power-Intensive Industries Are Advantaged Now
» Steel example -- Direct Reduction Iron (DRI) Gas strips oxygen from iron core to make high purity/quality pellets DRI pellets cost ~$270/ton vs. scrap steel cost ~$390/tonNucor/Encana $750 M plant in St. James Parish, LA is starting early 2014 with capacity of 2.5 M tons/year (will be largest DRI plant in the world)Voestalpine 2 M tons/year HBI and DRI plant is due online in early 2016
» Fertilizer example – Numerous new plant announcements
Gas is feedstock for ammonia/nitrogen5 plants will likely be built out of the 20 factory announcements First world scale plant in nearly 25 years in Wever, IA – Iowa Fertilizer (OCI) – projected to start in late 2015CF Industries’ two fertilizer expansions that have been announced in IA and LA are likely to be built – 2016 start
» Methanol example – Imports will be displacedBeaumont OCI plant restoration in 2012 – producing methanol & ammoniaLyondellBasell’s restart of mothballed Texas plant operational late 2013Methanex is relocating two plants from Chile to LA – first plant expected operational by end of 2014 and second early 2016OCI new plant announced in Beaumont – Q4 2016 startValero evaluating bolt-on approach for methanol plant at refinery in LA, project could startup in 2017
Average Cost of Electricity (2012)
Three iron‐ore storage domes stand near Nucor's direct‐reduced iron plant in Convent, La.www.wsj.com ‐ Feb 1, 2013
14
Phase II - Low Cost Gas Feedstock Provides Significant Cost Advantages for Chemicals & Resins
» US has a large structural cost advantage due to gas-based ethane for downstream products
Europe and Asia are tied to crude-based naptha as a feedstock for their downstream processingUS has shifted to ~90% ethane feedstock for ethylene
» However, US ethane cracker and processing capacity is tight and ethylene prices are inflated
Current ethane cracker margins 50-60 cents/lbAdditional cracker capacity expected in 2016/2017Margins/prices will moderate as more capacity comes onlineNew US resin facilities also on the drawing boardExcess resin capacity will promote globally competitive prices and large export increases
Source: Townsend Solutions
Sources: Townsend Solutions
30,000
35,000
40,000
45,000
50,000
2012 2013 2014 2015 2016 2017 2018 2019 2020
North America Ethylene Expansions
Actual Capacity Additional Capacity
k tons
k tons
15
Phase III - Raw Material Cost Advantage Is Key Cost Driver to Reshoring Growth
» Raw materials normally accounts for 60-70% of manufacturing cost of goods sold (COGS)
Most product cost competition is won or lost hereShale gas giving the US an advantage for steel, plastics, chemicals
» Total labor cost is usually ~20% of COGS for US manufacturers
China labor cost in $ will continue to rise due to inflation and currency appreciationUS labor rate expected to remain stable
» Transportation & Logistics costs are in “Other”Asia/China has 5~10% cost disadvantage due to extra ~ 1 month shipping lead time (major cash flow disadvantage)Transportation costs continue to rise
» Energy cost is usually less than 5% for final manufacturer
However, energy costs are buried in raw material costs and transportation and can be more substantial in energy-intensive productsUS has a tremendous advantage vs. industrialized world
16
Implications and Wrap Up
» Reshoring manufacturing volume will be limited until raw material costs are advantaged with some exceptions:
Durable goodsQuality differentiationInnovation / proximity to market advantagesMexico near-sourcing
» Shale gas-driven raw material advantages will take 5 years+ to flow through supply chain
Ethane crackers are current bottleneck to downstream cost competitivenessBottleneck will be relieved in 2016/2017 timeframeImports will be displaced – exports will grow dramatically in some industries
» Shale gas competitiveness is sustainable with huge, accessible supply reserves with continuous production cost improvement
» Shale oil is “icing on the cake” for the US Shale oil and gas supply chain will drive job growthEnergy independence coming!Improvement in trade deficit
17
Thank You!For follow up questions and information, please contact:
Taylor Robinson, President+1 (508) 982-1319 / [email protected]
18
Crude By Rail ReportA detailed look at the impacts of crude by rail on the marketplace
Real World ExperienceDepth of Analysis Strategic PerspectiveHands-on Engagement
Logistics Engineering Supply Chain
Presented by Graham BrisbenDecember 9, 2013
PLGConsulting.com
18
19
The Shale Development Revolution – Big Picture
Disruptive Technologies
• Hydraulic Fracturing• Horizontal Drilling
Continuous Evolution
• Productivity• Rapid Change
Market Dynamics• Supply & Demand• Customers• Price• Logistics
19
20
Shale Play Product Flows Outbound
» Natural GasMajority via pipelines, some trucks
» Natural Gas Liquids (NGLs)Requires processing (fractionation)3-9 gallons/MCF (thousand cubic feet)
– Ethane ~42-65%– Propane ~28%– Normal Butane ~8%– Iso-Butane ~9%– Condensate ~13%
» Crude OilBakken play as a model
21
“Tight” Oil Sources Driving Overall North American Growth
» Dramatic increases in production due to hydraulic fracturing and horizontal drilling
7.74 MM bbl/dayProjected to grow by ~30% over next four years“Tight” oil sources driving overall North American growthProduction forecasts frequently revised upwardLargest area of non-OPEC growth is North America
Source: BENTEK presentation, November 2013
22
Some Basic Facts About Crude Oil: Grades and Qualities
» Heavy/sourHigher sulfur content, yield for asphalt & dieselSources include– Western Canada (largest single play in North America)– Venezuela– Mexico, Alaska North Slope– Middle East (light/sour)
Significant investments made ($48B since 2005) at select refineries to install coker units that will allow processing of heavy/sourHeavy/sour crude has a natural home in Midwest and US Gulf Coast (~2.8 MM bpd demand at USGC)
» Light/sweetBrent, WTI, and US shale play crudes (Bakken, Permian, Niobrara, Eagle Ford) are light/sweetUS is close to saturation point on light/sweet crude at mid-continent and USGC refining areas Source: RBN Energy
23
Crude Market Overview
Bakken
Oil Sands
Permian
Eagle Ford
Hardisty, AB
Clearbrook, MN
Cushing, OK
St. James, LA
Sources: EIA, PLG Analysis (Google Earth)
Brent
Mexican Maya
Venezuela Crude
West African
ANS
Brent
West AfricanMiddle East
East Coast Refiners
Pacific Northwest Refiners
California Refiners
TX Gulf Coast Refiners
LA Gulf Coast Refiners
MidwestRefiners
PADD IDemand
PADD III Demand
8,100kbpd
PADD VDemand
2,500kbpd
1,075kbpd
Light/Sweet
Heavy/Sour
Light/Sweet
Heavy/Sour
Light/Sweet
Heavy/Sour
3,325kbpd
Heavy/Sour
Light/Sweet
PADD IIDemand
24
Displacement of Waterborne Crudes by Mid-Continent Sources
» Surging domestic production is diminishing importsWest African imports already down ~70% from 2010 levels
» Shift from coastal to mid-continent supply points necessitated “re-plumbing” the flow of crude in North America
Pipeline reversals, repurposing, new startsCrude by rail comes of age – born in the Bakken
Source: BENTEK presentation, November 2013
25
Crude By Rail From the Bakken – A Short History
» 2009-2010: Objective of crude by rail to “bridge the gap” until pipelines built and get product to market
2010-2011 discount of ~$8-12/bbl for Bakken crude vs. peer WTIUndervalued due to logistics constraints “stranding” the oil
» 2011-2012: Significant development of crude by rail loading terminals
» Initial destination is Cushing, OKDelivers better price than Clearbrook
» 2012-2013: Rail emerges as tool of arbitrage
Flexibility to sell Bakken crude at other light/sweet trading hubs – St. James in particular – allows traders to exploit price differentialsHigher cost of rail vs. pipe is offset by superior “optionality”
Map by PLG Consulting
~932,000 BPD September 2013
First outbound unit train shipment December, 2009
Source: EIA, North Dakota Pipeline Authority, PLG
26
Crude Oil by Rail vs. Pipeline
$6.50
$12.00$10.50
$15.00
$-
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
$16.00
Pipeline toCushing
Rail toCushing
Pipeline to PtArthur
Rail to PtArthur
Dol
lars
Per
Bar
rel
Source: PLG analysis
» Rail cost: 50-100% more expensive than pipeline transport
» Near-term offsetting rail advantages:Site permitting, construction much fasterLower capital costScalableShorter contracts (2-3 year commitments vs. 10 years for pipeline)Faster transit timesAccess to coastal areas not connected via pipelineOrigin/destination flexibilityPrimary advantage: Tool of arbitrage for trading desks
» Rail pricing driversAdvantaged rate structures for first-movers, volume, and unit train operators“Floor” has been set for crude by rail pricingCrude price differentials more important than cost vs. pipeline
Cost Comparison: Bakken to Cushing and USGC
27
US Shale Plays and CBR Loading and Offloading Terminals
Load Terminal
Offload Terminal
Shale Play
Oil Sands Play
PADD IDemand
PADD III Demand
8,100kbpd
PADD VDemand
2,500kbpd
1,075kbpd
Light/Sweet
Heavy/Sour
Light/Sweet
Heavy/Sour
Light/Sweet
Heavy/Sour
3,325kbpd
Heavy/Sour
Light/Sweet
PADD IIDemand
Sources: EIA, Various Industry Sources, PLG analysis (Google Earth)
28
The Importance of Price Differentials to Crude by Rail
» Differentials made rail attractive Bakken and WTI differential as high as ~$20/bbl vs. Brent in 2012 CBR enables producers to sell at trading hubs with higher benchmarks
» Market response: E&P, midstream players willing to rapidly deploy significant capital to enable access and capitalize on spreads
Multi-modal logistics hubs in shale plays and at destination markets (i.e. Cushing, OK, St. James, LA, Pt. Arthur, TX, Albany, NY, Bakersfield, CA)Lease and purchase of railcar fleets
» Refineries install unit train receiving capability Particularly coastal refineries previously captive to waterborne imports (i.e. Philadelphia, PA, St. John, NB, Washington state)
» Pipeline capacity underutilizedRail captures 73% Bakken takeaway by April 2013
» Differentials are both an incentive – and a risk – for crude by rail
3Q 2013 a cautionary note Source: North Dakota Pipeline Authority, PLG Analysis
29
Correlation of Operating Rig Count with Sand and Crude Shipments
STCC 14413 (sand) and 13111 (petroleum) Source: US Rail Desktop, Baker Hughes, STB data
0
500
1,000
1,500
2,000
2,500
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
2007 Avg. 2008 Avg. 2009 2010 2011 2012 2013
Ope
ratin
g O
nsho
re R
igs
Car
load
s
Operating On Shore RigsAll Sand Carloads HandledPetroleum Carloads Handled
30
All Crude Handled by Railroad Volume Growth
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
Car
load
s
Quarterly Data
BNSF
UP
CPRS
NS
CSXT
CN
KCS
STCC 13111 Source: US Rail Desktop
31
Shale Related Rail Traffic Still Small Relative to Coal Volumes
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2008
2009
2010
2011
2012
2013
SandCrude Coal
Car
load
s
Quarterly Data
SandCrudeCoal
STCC 14413 (sand), 13111 (petroleum), 11212 (coal) Source: US Rail Desktop
Railcars Handled: Sand, Crude, & Coal
32
Coal, Crude & Sand Trends: Carloads and Revenue
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
-
1
2
3
4
5
6
7
8
9
10
Bill
ions
Mill
ions
Carloads Revenue
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
-
200
400
600
800
1,000
1,200
1,400
Bill
ions
Thou
sand
s
Sand Crude Revenue
STCC 14413 (sand), 13111 (petroleum), 11212 (coal) Source: US Rail Desktop
Total Coal Carloads and Revenue Combined Sand and Crude Carloads and Revenue
33
Forecast of Crude Railcar Supply and Demand
» Production increases vs. railcar capacity increases
Significant increase in railcar capacity with the large railcar backlogIf pipelines and local refining can consume production increases in Permian and Eagle Ford, crude by rail will be primarily Bakken and Canadian Oil Sands-driven
» Under best-case scenario for rail market share capture, data suggests existing & planned tank car fleet exceeds demand
» Possible retrofit of “old design” railcars could dramatically decrease capacity
Approx. 2/3 of unlined, 30K/gallon fleet would need retrofit
Sources: CAPP, AAR, NDPA, GATX, and PLG analysis
Assumptions:• Bakken: 80% rail market share of Bakken’s projected volumes • Western Canadian Oil Sands: CAPP projected rail load out capacity due online by 2014 (300K bbl/day) and multiply by
two for capacity due online by 2015 and assume 80% CBR utilization.• 30,000 crude railcars in March and build rate of 21,500 railcars/year through Q3-2015 with attrition rate of 3,000
railcars/year• 650 bbl. average railcar capacity and average 23 day turn• Other production sources increase at rate of 2% per quarter
34
Lac Megantic Incident is Changing Crude by Rail
» As with other major rail accidents, expect lasting impact
» Increased product testing, documentation and traceability (FRA directive)
Oil chemistry varies by well/padConcerns with extremely low flash and boiling pointsFlammable liquids/crudes likely will require new design tank cars
» Increased FRA audit and scrutiny of entire CBR supply chain
» Railroad operating rule changes on hazmat train handling
OT 55 expanded to include all trains transporting hazmats
» Increased scrutiny, insurance requirementsShort line and regional railroads in particularMay have consequences in CBR freight rates
3535
Shale Development and Crude By Rail: Current Market Dynamics
» Adverse 3Q 2013 market forces have reversed
WTI-Brent spread now ~$16/bbl
» CBR rebound driven by Bakken to coasts
Long-term outlook for Bakken CBR to USGC is weakKey driver: LLS now aligned with WTI, not Brent
» “Next wave” of CBR development: Canadian Oil Sands
Terminal investments in Alberta and PADD II and III– ~600 bbl/day capacity plannedNOT like the Bakken/less certainty– Heavy/sour product requires significant additional
capex– Fewer destinations– 3-4 year runway until significant new pipeline
capacity is addedTank car market reorienting to coiled/insulated car types
35Source: RBN Energy
Brent vs. WTI Spread
Source: RBN Energy
36
Light/Sweet Crude Logistics and Price Differentials – November 2013
Bakken
Permian
Eagle Ford
East Coast Refiners
Pacific Northwest Refiners
California Refiners
TX Gulf Coast Refiners
LA Gulf Coast Refiners
$6
Light/Sweet at TX GCBakken (pipe): $90Brent (ship): $111WTI (pipe): $98
Light/Sweet at PNWBakken (rail): $92Brent (ship): $112
Light/Sweet at ECBakken (rail): $94Brent (ship): $111
Light/Sweet at LA GCBakken (rail): $94LLS (local): $96
Brent
ANS
Brent
36
Crude Prices from end of November 2013
Sources: EIA, PAALP, CIBC, CME Group, PLG analysis (Google Earth)
PADD IDemand
PADD III Demand
8,100kbpd
PADD VDemand
2,500kbpd
1,075kbpd
Light/Sweet
Heavy/Sour
Light/Sweet
Heavy/Sour
Light/Sweet
Heavy/Sour
Marine
RailPipeline
Cushing, OK
Chicago, IL
Clearbrook, MN
St. James, LA
$79(wellhead)
WTI:$93
Spread Dec. 2012 Nov. 2013 ChangeBrent - WTI $21.83/bbl $16.97/bbl -$4.86/bblLLS - WTI $20.00/bbl $3.45/bbl -$16.55/bblWTI - Bakken (Clearbrook) $3.00/bbl $11.50/bbl $8.85/bbl
37
Oil Sands
Hardisty, AB
Heavy/Sour Crude Logistics and Price Differentials – November 2013
$63
Heavy/Sour at TX GCMexican Maya (ship): $87WCS (pipe): $81WCS (rail): $87
Crude Prices from end of November 2013
Sources: EIA, CME Group, CIBC, PLG analysis (Google Earth) 37Mexican Maya
Marine
PADD III Demand
8,100kbpd
PADD VDemand
2,500kbpd Light/Sweet
Heavy/Sour
Light/Sweet
Heavy/Sour
3,325kbpd
Heavy/Sour
Light/Sweet
PADD IIDemand
TX Gulf Coast Refiners
Pacific Northwest Refiners
California Refiners
MidwestRefiners
RailPipeline
Clearbrook, MN
Chicago, IL
Spread Dec. 2012 Nov. 2013 ChangeMexican Maya - WCS $33.55/bbl $23.84/bbl -$9.71/bbl
3838
Looking Ahead:Crude By Rail SWOT
» Primary strengths and opportunitiesRapid implementation, scale up of operations, terminals, transit timesShorter contracts (2-3 year commitments vs. 10 years for pipeline)Access to coastal areas not connected via pipelineOrigin/destination flexibility/facilitation of arbitrage opportunitiesFoundational business (i.e. refining and E&P majors who have made a structural commitment to CBR)Growth in Canadian CBR – 3-4 year windowLonger-term opportunities– Future exports of crude – Refinery conversions in PADD III to process more light/sweet
» Primary threats and weaknessesExposure to changing price differentials that undermines trading business– Narrow WTI-Brent spread (EIA projects $8/bbl for 2014)– Adverse benchmark alignment (i.e. WTI-LLS)Structural changes in supply– Glut of Permian and Eagle Ford light sweet oil displacing rail volumes to USGC – Water-borne Eagle Ford crude deliveries to USECContinued pipeline developmentAdverse commercial consequences from recent accidents
Key Drivers
Key Drivers
Supply SourcesSupply Sources
Oil PricesOil Prices
Destination Markets
Destination Markets
CapitalCapital
39
Looking Ahead: Crude Oil Anticipated Production Growth and Product Flows
Sources: EIA, BENTEK Energy, CAPP, Railroad Commission of Texas, ND Pipeline Association, PLG Analysis (Google Earth)
= Current 2013= Future 2017
Anticipated Production Growth (000 bbl/d)
Permian1,6801,337+26%
1,6001,184 Eagle Ford
+35%
Bakken +47%9291,363
Marine
East Coast Refiners
Oil Sands
2,5901,985 +30%
Hardisty, AB
Cushing, OK
LA Gulf Coast Refiners
Light/Sweet
St. James, LA
RailPipeline
Pacific Northwest Refiners
California Refiners
TX Gulf Coast Refiners
Heavy/Sour
Clearbrook, MN
Chicago, IL
Canadian East Coast Refiners
Export Terminal
39
40
Thank You!For follow up questions and information, please contact:
Graham Brisben, CEO+1 (708) 386-0700 / [email protected]