UGI Energy Services Infrastructure Waiting for Manufacturing. November 9, 2018

Transcription

1 UGI Energy Services Infrastructure Waiting for Manufacturing November 9, 2018

2 Agenda Marcellus Liquids-rich & Dry Northeast Pennsylvania Pricing Northeast Pennsylvania Gas Quality End Product Transportation Options Example of Company Benefitting Today 2

3 Marcellus Natural Gas Benefits 3

4 Natural Gas Supply and Demand Locations Favorable Pricing in the Supply Regions Abundant Infrastructure in the Supply Regions of Pennsylvania Benefits to Manufacturers SUPPLY REGIONS DEMAND REGION Ten years of rapid build-out in the supply regions has created a substantial amount of natural gas infrastructure Numerous header systems and trunk lines present opportunities for supply connections Many gathering lines have flexible negotiated commercial terms; fewer encumbrances than interstate pipelines Abundant local production yields steady pricing, even during periods of extremely high demand Inland location is not subject to the weather events that are presented on the Gulf Coast 4

5 Natural Gas Prices ($/mmbtu) Northeast PA Pricing vs. Henry Hub Pricing $9.00 Henry Hub TGP Z 4 Marcellus Leidy $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 5

6 High Quality Feedstock Northeast Pennsylvania Natural Gas Contains Very Few Impurities UGI Energy Services Pipelines Are Located in the Region of Dry Gas Highlights Wet Gas Dry Gas Northeast Pennsylvania is in the dry gas portion of the Marcellus Shale play Typical dry gas quality in the Marcellus is at high quality without processing CH 4 (Methane): 97.5% C 2 H 6 (Ethane): 2% C 3 H 8 (Propane): 0.05% IC 4 H 10 (Iso-butane): 0% C 4 H 10 (Butane): 0% N 2 (Nitrogen): 0.32% CO 2 (Carbon Dioxide): 0.08% 6

7 Transportation Numerous Export Options From Northeastern Pennsylvania Three Port Facilities Within 150 Miles of Production Area Highlights Railroad and highway access is plentiful in region to provide access to the continental U.S. Three major port facilities in close proximity available for exporting goods overseas Port of Elizabeth Elizabeth, NJ Port of Philadelphia Philadelphia, PA Port of Baltimore Baltimore, MD 7

8 Example of Company Benefitting Today 8

9 Existing Manufacturing Operating in Northeast PA UGIES Provides Bundled Service to Proctor & Gamble P&G Obtains All Gas Supply Needs From One Source System Highlights UGIES currently supplies natural gas to local Proctor & Gamble facility Commits to maintaining Firm level of service to supply Proctor & Gamble s manufacturing operation and cogeneration power plant at this location Provides balancing services to plant UGIES Midstream: Owns and operates the Auburn pipeline connected to both the natural gas Producers and the P&G facility Pipeline capacity on Auburn Pipeline is held by UGIES 9

10 Infrastructure Company Providing Benefits Today UGIES Provides Full Suite of Gas Supply Requirements Industrial Plant Obtains All Gas Supply Needs From One Source System Highlights UGIES Midstream services UGIES Gas Supply Services UGIES Midstream: Owns and operates high capacity pipelines in the heart of the dry Marcellus (Auburn Pipeline, Sunbury Pipeline) Own and operate the pipeline Commitment to Firm service Major Marcellus natural gas producers ship natural gas on UGIES pipelines Multiple receipt points enhances reliability Connection to multiple gas producers Aggregation of supply from natural gas producers Provide balancing services UGIES pipelines are located in areas of large, flat, open farmland that are suitable for large facilities UGIES Gas Supply: Currently purchase gas from all of the major natural gas producers in the Marcellus Currently holds capacity on UGIES pipelines Offers full suite of services to enduse customers 10

11 Key Concepts Review Infrastructure is already located in optimal locations Northeast Pennsylvania Pricing o Liquid points that trade at a discount to Henry Hub o Price stability Northeast Pennsylvania Natural Gas Quality o Pennsylvania natural gas as a feedstock is a high-quality product Plentiful Transport Options o Abundant highways and rail provide easy access to the country o Three nearby seaports provide access to the world market 11

12