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Ruby Pipeline
Wyoming Pipeline AuthorityJanuary 15, 2008
Ed MillerEPWP
Dan FitzgeraldPG&E
2
El Paso Corporation Overview
• El Paso Corporation provides natural gas and related energy products in a safe, efficient, dependable manner. We own North America’s largest natural gas pipeline system and are one of North America’s largest independent natural gas producers. We are organized around regulated and non-regulated businesses.
3
El Paso Pipeline System
• 19% of total U.S. interstate pipeline mileage• 23 Bcf/d capacity (16% of total U.S.)• 16 Bcf/d throughput (28% of gas delivered to U.S.
consumers)• Best market connection• Best supply access• Leading pipeline integrity program
El PasoNatural Gas
Mexico Ventures
MojavePipeline
ColoradoInterstate Gas
Wyoming Interstate
Cheyenne Plains
Pipeline
TennesseeGas Pipeline
SouthernNatural Gas
Florida GasTransmission (50%)
Elba IslandLNG
4
Ruby Pipeline MapRuby Pipeline Map
Malin
Opal Hub
U T A HU T A H
N E V A D AN E V A D A
O R E G O NO R E G O N
C O L O R A D OC O L O R A D O
I D A H OI D A H O
C A L I F .C A L I F .
W Y O M I N GW Y O M I N G
CIG
Kern River
Paiute
Tuscarora
PG&E
GTN
Ruby PipelineOpal to Malin
WIC
CheyennePlains
Cheyenne
UintaBasin
PiceanceBasin
5
Ruby Capacity and Facilities
• Design and rates are based upon 1.2 Bcf/d of capacity• 680 miles from Opal to Malin• 42”, 1,440 psig pipe design
– Most cost effective design taking fuel and expansion opportunities into consideration
• Compressor stations
– Opal ~45,400 HP (site rating)
– Midpoint ~18,200 HP (site rating)
– Fuel from Opal ~0.9%• Four delivery point interconnects and five receipt point interconnects• Expandable to 2 Bcf/d with compression
6
Ruby Highlights to Date
• 1.2 Bcf/d pipeline from Opal to Malin
• Ownership structure
– El Paso Western Pipelines
– PG&E Corporation
– Bear Energy
• During past 5 months, Ruby Project has been presented to most Rockies producers and some western markets under Confidentiality Agreements
• Ruby filed an application with the BLM in November to construct a pipeline between Opal and Malin
• Negotiations with pipe mills and contractors have been ongoing for over 6 months
– Estimate has been finalized during this process
• Approximately 50% of firm capacity has been committed
• Ruby requires firm capacity commitments of 1.2 Bcf/d to be constructed
7
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
1970 1990 2010 2030 2050 2070 2090
Rockies versus Western CanadaLong-Term Production Trends
Best fit of Current Trend:- 2033 Peak- 14 Bcfd Production
El Paso Base Case
El Paso High Case
Best Fit Curves Assumes:- Gaussian Curve - 320 EUR- Few environmental constraints
El Paso Base case suggest 9,650 Bcfd of export capacity needed (currently 6,200 in 2007) to meet 85% LF requirementEl Paso High case suggest 12,000 Bcfd of export capacity needed (currently 6,200 in 2007) to meet 85% LF requirement
Canadian Peak- 2001 Peak- 17 Bcfd
8
Rocky Mountain Production by Basin
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Big Horn Wind River
Green River Overthrust
Powder River Uinta
Piceance Denver
(Volumes are Wellhead – Measured in MMcfd)
1990-2005: Wellhead total data from IHS database2006: Estimate2007-2015: El Paso forecast
9
Projected Gas Flowswith Ruby
Chicago
NE
AECO
3.28% fuel
Malin (GTN)1.3%fuel
NORTHERNCALIFORNIA
2.87% fuel
2.98
% fu
el
Kern1.3%fuel
San Juan
Western Canada
ProductionLocal
Consumption Exportable
2008 15.69 5.01 10.0
2012 14.32 5.83 8.49
Projected2012 Price
w/Ruby
PipelineFuel Only
DispatchMalin Price
AECO 7.39 0.251 7.641
ROX 7.52 0.0683 7.588
Ruby0.9% fuel
NWP
TC
2012 Northern CA Economic Dispatch2.87% fuel
1.82% fuel
Bcf/d
Total Eastbound pipeline capacity
12 Bcf/d
Ruby gas will befirst through themeter at Malin
1.68%fuel
Total Westbound pipeline capacity
2.6 Bcf/d
ROX BasisImprovement w/Ruby2012: $0.50-$0.602015: $1.50 - $1.75
ROX
1% fuel
4.8% to 5.3% fuel
5.75% fuel
10
Ruby Proposed Next Steps
April-Oct. 2008Feb./Mar. 2008Jan. 2008
JanuaryRuby Packages
Customer Follow-Up
October 2008State RegulatoryApprovals
May 2008Transporter Board Approval
February-MarchBinding
Open Season
April 2008Shipper
BoardApprovals
FebruaryEl Paso UpstreamCapacity Open Season
11
Ruby Schedule Highlights
July-NovemberRoute Surveys
and Mapping
MarchPipe Option
AprilReceive Certificate
JanuaryFERC Prefiling
JanuaryFile FERCCertificateApplication
OctoberPipe Commitment
JulyCommence
Construction
March 2011In-Service
Preliminary route work completed
20112010200920082007
MayFormal CustomerDiscussionsCommence
Filed routewith BLM
12
Market Overview
13
U.S. West CoastDistinct Gas Markets
Supplied primarily from two regions:
1. Western Canadian Sedimentary Basin2. Western Domestic Basins (Rockies, San Juan and Permian)
• Pacific Northwest 600 Bcf/yr
• Northern California 835 Bcf/yr• Northern Nevada 65 Bcf/yr
• Southern California 965 Bcf/yr
14
Malin Takeaway
• 2.2 Bcf/d firm takeaway capacity plus displacement on GTN at Malin
• Access to west coast market:
– Northern/Central California via Pacific Gas and Electric Company
– Northern Nevada via Tuscarora Gas Transmission
– Pacific Northwest via GTN and indirectly to Williams’ Northwest Pipeline and Avista Utilities
– Southern California via deliveries off PG&E system
• Access to 82 Bcf of underground storage
– PG&E (CA): 42 Bcf
– Wild Goose (CA): 24 Bcf *
– Lodi (CA): 16 Bcf *
WASHINGTON
IDAHO
BRITISH COLUMBIA
OREGON
CALIFORNIA
PG&E
Tuscarora Gas Transmission
GTN
Northwest Pipeline
Mist
Jackson Prairie
Malin
Sumas
NEVADA
Seattle
Portland
San Francisco
Ruby
* Currently being expanded
Line 400
Line 401
Line 401Line 300
Line 2
Lodi
Wild Goose
Pleasant Creek
Los Medanos
PG&E Area of Detail
McDonaldIsland
Natural Gas Storage
15
Northern/Central California Market2006 Demand
• 2006 annual gas demand of 835 Bcf
• Annual growth forecasted at 1.3% through 2025
– Results in incremental requirement of 67 Bcf of annual gas demand by 2012
• 2006 peak day demand was 3.5 Bcf (2007 peak day of 3.9 Bcf)
– PG&E, Wild Goose and Lodi storage fields serve peak day demands
• Two strong gas demand periods
– Winter: Large residential demand
– Summer: Large gas-fired generation load and storage injections
1.5
2.0
2.5
3.0
3.5
4.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Bc
f/d
ay
Sources: 2006 California Gas Report and PG&E CGT Pipe Ranger
16
Northern Nevada Market2006 Demand
• Annual gas demand of 64 Bcf
• Annual growth forecasted at 4.0% through 2016
– Results in incremental requirement of 17 Bcf of annual gas demand by 2012
• Seasonal demand
• 2006 Peak day demand was 0.32 Bcf
– Lovelock LNG storage (1.0 Bcf) located near Reno, NV serve peak day demands
• Ruby interconnects with both Paiute (near Lovelock) and Tuscarora (at Malin)
0.05
0.10
0.15
0.20
0.25
0.30
0.35
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Bcf
/da
y
Seasonal Market with a Winter Peak
17
Pipelines in Northern Nevada
IDAHO
OREGON
Northwest Pipeline
NEVADAReno
Tuscarora
Paiute
GTN
CALIFORNIA
PG&E
0.2 Bcf/d
Malin
0.17 Bcf/dUTAH
RUBY
• Northern Nevada is served via two pipelines (Tuscarora and Paiute)
• Paiute Pipeline
– Largest customers: SWG, Sierra Pacific
• 96% of transport contracts
– 155 MDth/d receipt capacity from NWPL
• ~75 MMcf/d sources from Canadian supply
• NWPL contracts expire by 2009
– System operates at an average load factor of 71%
• Tuscarora Gas Transmission
– Largest customers: Sierra Pacific, SWG, Barrick Gold
• Represent 96% of transport
– Certificate issued 7/24/07 for an expansion of 40 MDth/d that will serve the Tracy Power Plant (514 MW)
• 22.5-year contract with Sierra Pacific Power (40 MDth) upstream of Malin
– SWG and Barrick do not hold capacity on upstream pipe
18
Pacific Northwest (PNW) Market2006 Demand
• Annual gas demand of 600 Bcf• Annual growth forecasted at 2.1% through 2012
– Results in incremental requirement of 80 Bcf of annual gas demand by 2012
• 2006 peak day demand was 2.9 Bcf– Jackson Prairie, MIST and Clay Basin storage fields serve peak day demands
• Gas-fired power generation load varies depending on hydro power availability• Demand is more seasonal
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Bcf
/da
y
WASHINGTON
IDAHO
BRITISH COLUMBIA
OREGON
GTN
Northwest PipelineSeattle
s
KingsgateSumas
MIST
Portland
s
Jackson Prairie
NWN
MalinNEVADA
Sources: Northwest Gas Association 2006 Outlook and Northwest Pipeline and GTN Scheduled Volumes
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Contacts
Ed MillerBusiness [email protected]
Roland HarrisBusiness [email protected]
Russ [email protected]
Jennifer WebsterGovernment [email protected]
Jeff [email protected]
El Paso Western Pipelines PG&E
Bear Energy
Ruby Pipeline
Wyoming Pipeline AuthorityJanuary 15, 2008
Ed MillerEPWP
Dan FitzgeraldPG&E