An Integrated Super Major s View for the Gulf of Mexico. Bruce Blome Shell Pipeline Company LP

Transcription

1 An Integrated Super Major s View for the Gulf of Mexico Bruce Blome Shell Pipeline Company LP

2 Topics GOM Pipeline Network View Point on Tanker Shuttling Issues to be Better Understood Conclusions

3 22" To: LakeCharles Port Arthur East Houston Texas City Shell GOM Pipeline Network Erath St. James Convent Sugarland Ship Shoal 20" LOCAP 48" Norco Atchafalaya 8 Delta 20 Gibson Ship Shoal 22" Houma Ship Shoal 16" Clovelly (LOOP) Nair n Chandeleur Sound Breton Sound Chandeleur Area Main Pass Vermillion South Marsh Island Eugene Island Tarpon 16" Ship Shoal CocodrieCaillou Is. South Pelto Eugene Island P/L 20" LOOP 48" Odyssey Bud 8 Tiger Shoal Whitecap 18" Fourchon Mars 24" West Delta Pipeline 8" Bourbon 8" South Pass Pompano 12" Cognac 12" Ram/Powell12" Viosca Knoll Vermillion 8" Garden Banks Central Gulf Gathering Bonito 14" Auger-20" Boxer 16" Poseidon 20" Jolliet 12" Cougar 12" Poseidon 24" Ewing Banks Amberjack 20/24" South Timbalier Brutus Grand Isle Poseidon 16" EW910 8"(1998) Mars 18" Mississippi Canyon Ursa P/L Eastern Pipeline Corridor Auger 14/16" Green Canyon Western Pipeline Corridor Atwater Central Pipeline Corridor - Deepwater Pipeline System - Other Shell Systems - Shell E&P Platform

4 Extensive GOM Pipeline Network Extensive Shell GOM pipeline network was built primarily for Shell projects Extensions into deepwater have been supported by Shell projects Already extensive pipeline network continues to grow in the deepwater Pipelines are not being ruled out for ultra deepwater projects

5 Extensive GOM Pipeline Network Pipeline network allows for market flexibility and reliability Pipeline competition in GOM has resulted in attractive transportation pricing Significant experience in GOM with pipelines results in high comfort level

6 View Point on Tanker Shuttling Seek the solution that makes the most economic sense across the entire value chain Insure that all risks are fully defined and mitigated Tanker shuttling is an option for ultra deepwater development and areas with limited pipeline infrastructure

7 View Point on Tanker Shuttling Market flexibility is a plus Once established it could aid economical development of smaller discoveries Tanker shuttling will occur in the GOM

8 Issues to be Better Understood Cost Can Jones Act vessels be built at the estimated cost? Must understand all cost elements More than just capex and transportation rates Need to define all costs from development through ultimate delivery to customer Availability of shipyards and impact on cost

9 Issues to be Better Understood Cost Limited market for Jones Act vessels ability to optimize? How will production volume risk be viewed by the tanker shuttling?

10 Issues to be Better Understood Technology FPSOs versus typical GOM deepwater facilities TLPs, SPARs,, semi-submersibles submersibles Storage for typical facilities Gas transportation solution Other technology hurdles for tanker shuttling? What are the actual technology limitations for pipelines?

11 Issues to be Better Understood Project Schedule Regulatory impact on project schedule permit process Can Jones Act tanker shuttles be built on time Availability of shipyards

12 Issues to be Better Understood Marketing How will it change the oil marketing strategy Flexibility Selling to multiple buyers Known transportation rate schedules Market flexibility appears to be a positive Crude quality Blending and segregating opportunities Dealing with contaminants such as methanol Changes in supply/demand balances on crude pricing in various markets?

13 Issues to be Better Understood Competition How long will it take to develop a competitive market for shuttle tankers in the GOM? How many players will surface to create competition Barriers to entry seem significant

14 Issues to be Better Understood Other Environmental risks Partnership issues pipeline vs. shuttle tanker Weather and reliability Vessels required to insure non-interruptible service

15 Issues to be Better Understood Other Ability to own shuttle tankers to maintain integration along value chain Investment economics Public perception Impact on external stakeholders

16 Conclusions Shuttle tankers will be utilized in the GOM Pipelines will continue to extend into the deepwater GOM Many significant issues need to be better understood Support will need to be industry-wide