Western US Natural Gas Supply & Demand Outlook

Transcription

1 Western US Natural Gas Supply & Demand Outlook Rick Margolin, Senior Analyst WSPP Operating Committee Spring Conference Sonoma, CA March 11, 2015 US: EU:

2 Genscape s Service Genscape is the industry leader in the real-time collection, analysis and distribution of fundamental production data in the commodities & energy markets Sectors Power Oil Natural Gas Liquids/Petrochemicals Provide Physical Data Provide Context Genscape s Services Collate and normalize Genscape proprietary data with publicly available data Add historical context and comparative data Gas Agriculture & Biofuels Maritime Shipping Deliver Insight Drive the Trade or Production Decision Combine Physical Data and Context to provide unique, value-added explanations and recommendations Armed with information about where supply, demand and ultimately price will likely move, customers can execute trades or make changes to production The information Genscape provides is unique, must have, real-time content that physical producers and traders use to make production and trading decisions 2014 Genscape Incorporated. All rights reserved.

3 Genscape PowerIQ WECCTerm Service Genscape s WECC Term Energy Price Forecast provides fundamental data and power market analytics based on an advanced unit commitment model allowing users to forecast next day prices out to one year for Mid-C, 4Corners, Mead, NP, SP, PV, Rocky Mountains and Utah hubs. Also includes: Proprietary insight on Genscape monitored plants Proprietary renewable energy models for hydro, solar, and wind Access to West-focused meteorologists Ability to run custom scenarios 3

4 West Monitoring Expansion for 2015 Generation Expansion Alamitos plant (2,010 MW plant in California) Langley Gulch plant (~330 MW gas plant in Idaho) Sentinel Energy Project Walnut Creek Energy Park (500 MW plant in CA) Intermountain (DC line flows) WOR/EOR Coverage Colorado River-Devers 500 kv (WECC line) Lamar HVDC Tie Liberty-Peacock 345 kv (WECC line) Peacock-Mead 345 kv (WECC line) Perkins-Mead 500 KV (West line) Sunrise Powerline (WECC lines) Vista-Devers 230 kv (2) (WECC lines) Rocky Mountain Expansion Comanche Station unit 3 (WECC unit) Front Range (541 MW gas plant) Ray D Nixon (280 MW coal/gas plant in WECC) Solar Coverage Topaz (588 MW solar plant in WECC) Imperial Solar Energy Center South (128.9 MW solar farm in CA) CVSR (250 MW solar plant in WECC) 4

5 West Gas Supply & Demand Outlook Supplies from across continent are pushing West Only a handful of West demand markets are showing or are poised for growth Concerns about constraints moving gas into premium markets are waning West gas prices are positioned to experience relative stability, though premiums to rest of North American market are likely. 5

6 $/MMBtu $/MMBtu Gas Futures Have Declined Along With Crude Drop Crude Futures (WTI) $18 $16 $14 $12 $10 $8 $6 $4 $2 $0 Apr-15 Oct-15 Apr-16 Oct-16 Apr-17 Oct-17 Apr-18 Oct-18 Trade Date: 8/1/2014 Trade Date: 1/30/2015 Natural Gas Futures (NYMEX) $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 Apr-15 Oct-15 Apr-16 Oct-16 Apr-17 Oct-17 Apr-18 Oct-18 Trade Date: 8/1/2014 Trade Date: 1/30/2015 6

7 Bcf/d US Gas Production Growth Slows, But Still Growing In Later Years 90 Lower 48 Dry Gas Production History Forecast Date Forecast Date

8 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Bcf/d Growing Northeast & Midcon Production Will Back Up West Production 40 Midcon & East Production Midcon East 8

9 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Bcf/d West Production Will Remain Relatively Stable 40 All West Gas Production Rockies San Juan Other West West Canada Permian 9

10 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Bcf/d West Canadian Production Holds Steady West Canada Gas Production History Forecast 10

11 Bcf/d W. Canada Demand Growing West Canada Gas Demand History Forecast 11

12 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Bcf/d West Canadian Outflows Shift West West Canada Outflows To West To East 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% West Canada Outflows % To West

13 Bcf/d Rockies Production Declines Easing, May Reverse 12 Rockies Gas Production History Forecast 13

14 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Bcf/d Markets West of Rockies Account For Uptick in Total Outflows Rockies Outflows 70% 60% 50% 40% 30% 20% 10% 0% % Rockies Outflows to Western Markets West East 14

15 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Bcf/d Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Bcf/d San Juan Declines Will be More than Offset by Permian Growth San Juan Gas Production History Forecast Permian Gas Production History Forecast 15

16 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Bcf/d California Production Will Continue to Decline Other West Gas Production History Forecast 16

17 Jan-10 Jul-10 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Bcf/d PNW Gas Demand Remains a Function of Hydro. Forecast is Flat Until Pacific Northwest Gas Demand History Forecast 17

18 Impact of Low/Mid/High PNW Hydro on Gas Demand Archive data selected from 55 years of Apr- Sep flow at the Dalles dam. The Dalles is used as much of PNW hydro will ultimately flow through it. Years selected for sensitivity study: High 1997, 2011, 2012 Medium 1986, 1998, 2013 Low 1987, 1992, 2001 Currently public water supply forecast is here 18

19 Genscape WECCTerm Hydro Model Estimate of BPA Supply Through End of July 19

20 Jan-09 Jul-09 Jan-10 Jul-10 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Bcf/d Desert Southwest Demand Decreasing Desert Southwest Gas Demand History Forecast 20

21 Bcf/d Exports to Mexico Will Siphon Permian/West Texas Supply From Western US Markets US Gas Exports to Mexico History Forecast 21

22 Jul-10 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-09 Jul-09 Jan-10 Jul-10 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Bcf/d Bcf/d California Demand No Longer Growing. Flat to Potentially Declining. SoCal Gas Demand PG&E Gas Demand History Forecast History Forecast 22

23 Summary Supplies from across continent are pushing West Only a handful of West demand markets are showing or are poised for growth Concerns about constraints moving gas into premium markets are waning West gas prices are positioned to experience relative stability, though premiums to rest of North American market are likely. 23

24 To request a free trial or learn more, visit: Genscape.com/URL Contact Us: Rick Margolin Senior Analyst Natural Gas rmargolin@genscape.com Chris Jylkka Regional Operations Dir. cjylkka@genscape.com USA Louisville Genscape, Inc. 445 E. Market Street Suite 200 Louisville, KY Europe Amsterdam Genscape International, Inc. Damrak 20A 1012 LH Amsterdam The Netherlands info@genscape.com US: EU: