2014 EAST TENNESSEE NATURAL GAS PIPELINE AND SALTVILLE GAS STORAGE CUSTOMER MEETING. Welcome to Barnsley Gardens!

Transcription

1 2014 EAST TENNESSEE NATURAL GAS PIPELINE AND SALTVILLE GAS STORAGE CUSTOMER MEETING 2014 EAST TENNESSEE NATURAL GAS PIPELINE AND SALTVILLE GAS STORAGE CUSTOMER MEETING Welcome to Barnsley Gardens!

2 Welcome Patti Fitzpatrick Vice President, Marketing

3 Agenda Welcome Spectra Energy On the Move! Operational Highlights LINK Updates Break Marketing, Business Development & Regulatory Planning in the Uncertain World of Energy & Geopolitics Patti Fitzpatrick VP Marketing, Spectra Energy Bill Yardley President U.S. Transmission, Spectra Energy Shamus Donahoe Manager Operational Balances, Spectra Energy Michael Peel Sr. Commercial Business Analyst, Spectra Energy George Snyder Director SE Marketing, Spectra Energy G. Allen Brooks Managing Director PPHB LP Q&A/Final Comments Adjourn for Events East Tennessee Natural Gas Customer Meeting 3

4 Safe Harbor Statement Some of the statements in this document concerning future company performance will be forward-looking within the meanings of the securities laws. Actual results may materially differ from those discussed in these forward-looking statements, and you should refer to the additional information contained in Spectra Energy s Form 10-K and other filings made with the SEC concerning factors that could cause those results to be different than contemplated in today's discussion. Reg G Disclosure In addition, today s discussion includes certain non-gaap financial measures as defined under SEC Regulation G. A reconciliation of those measures to the most directly comparable GAAP measures is available on our website. East Tennessee Natural Gas Customer Meeting 4

5 Texas Eastern Capacity Kosciusko Texas Eastern/Bobcat Capacity Opportunity Access area supply and high deliverability, flexible storage Supply liquidity and reliability from M1 pool and Kosci supply Bobcat Storage Reservation Discounted Rates: ELA to M1: $2.4333/Dth Mos Rate ($0.08/Dth/day) Bobcat Storage: $0.08/Dth/month 5 Turn Service East Tennessee Natural Gas Customer Meeting 5

6 Spectra Energy On the Move! Bill Yardley President, U.S. Transmission

7 U.S. Transmission Changing Dynamics Future Flows Growing supply along the system Increasing demand in all areas where our pipelines reach New projects make Texas Eastern bi-directional Traditional Flows Value of capacity increases with changing supply and demand dynamics East Tennessee Natural Gas Customer Meeting 7

8 U.S. Transmission Execution Projects Ozark Conversion TEAM South Gulf Markets Expansion NEXUS U2GC OPEN Sabal Trail TEAM 2014 Kingsport Atlantic Bridge AIM Salem Lateral $6B of projects in execution Capacity (MDth/d) In-Service Project TEAM South 300 3Q14 TEAM Q14 Kingsport 86 4Q14 OPEN 550 2H15 U2GC 425 2H15 Ozark 75,000 Conversion bpd 1H16 Salem Lateral 115 1H16 AIM 342 2H16 Gulf Markets 650 2H16/1H17 Sabal Trail 1,000 1H17 Atlantic Bridge H17 NEXUS 1,500 2H17 East Tennessee Natural Gas Customer Meeting 8

9 Meeting New England s Natural Gas Infrastructure Needs Algonquin Maritimes & Northeast BOSTON $7.95 AGT Citygate 1 Texas Eastern Algonquin Maritimes & NE Millennium Iroquois Tennessee Gas Texas Eastern NEW YORK $3.84 Market Zone 3 1,2 1.Average Monthly Sept 2014 Aug 2015 forward natural gas price ($/Dth) as of August 20, M3 average trading at $0.11 discount to Henry Hub East Tennessee Natural Gas Customer Meeting 9

10 Making Texas Eastern Bi-directional BEFORE AFTER Projects driving the bi-directional conversion In- Service Capacity (MDth/d) TEAM South Sept TEAM 2014 Nov Open 2H U2GC 2H Gulf Markets 2H Adair Southwest Access South East Tennessee Natural Gas Customer Meeting 10

11 Team South Expansion of Texas Eastern from Appalachian area receipts to high growth markets in the South TEAM South Project Scope Customers (20+ year terms) Preliminary Facilities Project Status Capacity: 300 MMcf/d CapEx: <$50 MM Appalachian Producers Various compressor station modifications to allow for bi-directional flow In-Service September 1, % Utilization from day one 123 MMcf first day deliveries to ETNG (38% of total volumes) Over 9.8BCF scheduled during September BCF delivered to ETNG (30%) East Tennessee Natural Gas Customer Meeting 11

12 Access South Project Serves Appalachian shale producers with incremental transport to markets in the Southeast and Gulf Coast area Berne Uniontown Project Scope Customers Capacity: 320 MMcf/d Appalachian shale producers Kosciusko Access South Project Project Status Preliminary Facilities Open Season closed August 2014 Precedent Agreements October 2014 FERC Certificate Filing 2H15 Target In-Service 2H17 Pipeline looping within existing ROW New compression units at existing compressor stations Various other modifications East Tennessee Natural Gas Customer Meeting 12

13 Kingsport Expansion Project Map of Expansion East Tennessee Natural Gas Customer Meeting 13

14 U.S. Transmission Development Projects New England Power Gen Midwest Expansions Gulf LNG / Industrials Southeast Expansions Mid-Atlantic Expansions Opportunity In-Service New England Power Gen Gulf LNG / Industrials Exports to Mexico Midwest, Southeast and Mid-Atlantic Expansions Originating expansion projects from new areas of demand Continued growth of U.S. gas-fired power generation Gulf Coast representing 10+ Bcf/d of new industrial and export opportunities Exports to Mexico East Tennessee Natural Gas Customer Meeting 14

15 Positioned to Serve our Customers Connected to abundant supplies Connected to high-demand markets Proven ability to execute East Tennessee Natural Gas Customer Meeting 15

16 Operational Highlights Shamus Donahoe Manager Operational Balances

17 MDth/d East Tennessee Natural Gas Top 25 Winter Days _09 09_10 10_11 11_12 12_13 13_14 East Tennessee Natural Gas Customer Meeting 17

18 Mdth East Tennessee Monthly Deliveries 35,000 30,000 25,000 20, % 7% of Total 2.6% 14% of Total 17% of Total -2.5% 8% of Total -7.7% 25% of Total 3% of Total 19.2% 7% of Total 13.8% 17% of Total 10% of Total 5.6% 5% of Total -1.5% 12% of Total 4% of Total 12.6% 8% of Total -4.3% 15% of Total 3% of Total 15,000 10,000 5,000 0 Nov Dec Jan Feb Mar Prev 5 Winter Avg Pwr W12_13 Pwr W13_14 Pwr Prev 5 Winter Avg Non Pwr W12_13 Non Pwr W13_14 Non Pwr East Tennessee Natural Gas Customer Meeting 18

19 Dth East Tennessee Natural Gas Nov- Mar Deliveries 140,000, ,000, ,000,000 80,000,000 60,000,000 40,000,000 20,000, * Each year represents the end of that winter period; i.e is Nov 2013 through Mar 2014 East Tennessee Natural Gas Customer Meeting 19

20 ETNG Restrictions Location W13-14 Seals/ Cuts W12-13 Seals/ Cuts W11-12 Seals/ Cuts Glade Spring 0/0 0/0 2/7 Tracy City 2/4 5/10 1/0 Ridgetop 0/0 5/22 7/0 Lobelville 2/8 5/55 3/26 Topside East 9/31 68/29 2/0 Topside South 1/16 3/28 10/21 Boyd s Creek 0/6 17/59 12/13 MAD Days East Tennessee Natural Gas Customer Meeting 20

21 Dth East Tennessee Load Duration: Nov - Mar 1,400,000 1,200,000 1,000,000 W13_14 W12_13 W11_12 W10_11 W09_10 800, , , , Days East Tennessee Natural Gas Customer Meeting 21

22 MDth/d East Tennessee Natural Gas, LLC Top 25 Summer Delivery Days East Tennessee Natural Gas Customer Meeting

23 Mdth East Tennessee Natural Gas, LLC Summer Scheduled Throughput Boyd s Creek 4,000 3,500 3, % 2, % 24.2% 33.1% 2, % 63.4% 1, % 117.4% 1, May Jun Jul Aug Prev 5yr Avg East Tennessee Natural Gas Customer Meeting

24 East Tennessee Natural Gas, LLC Supply Diversity Summer (MDth/d) Operator Summer 11 Summer 12 Summer 13 Summer 14 Texas Eastern Tennessee Columbia Gulf Southern Natural Midwestern Other West End Supply Nora Lateral Jewell Ridge Lateral Stone Mountain East End Supply East Tennessee Natural Gas Customer Meeting

25 Dth East Tennessee Natural Gas, LLC Load Duration Curve - Summer 900, , , , , , , , , East Tennessee Natural Gas Customer Meeting 25

26 Texas Eastern Transmission, L.P. Supply Diversity (MDth/d) ~80% Decrease Marcellus 1,000+% Increase LEBANON NJ-NY HANOVER 700MDth/d New Supplies ~90% Decrease 30 from ACCESS AREA Nov 10 - Feb 11 Nov 11 - Feb 12 Nov 12 Feb 13 Nov 13 Feb 14 TE Marcellus Production ,589 2,984 REX - Clarington Lebanon Area (ANR, PEPL, REX, TX Gas) TETLP Mainline (traditional) from Access Area from Access Area 1,855 1, NJ/NY Hanover TETLP Market Zones Supply 4,337 4,029 3,942 5,096 East Tennessee Natural Gas Customer Meeting 26

27 Dth Texas Eastern Transmission Berne Station Load Duration Sep - Aug 3,000,000 2,500,000 2,000,000 C13_14 C12_13 C11_12 1,500,000 1,000, , ,000-1,000,000-1,500, Days East Tennessee Natural Gas Customer Meeting 27

28 Dth Texas Eastern Transmission Marcellus Shale Supply Growth 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 0 J-10 A-10 J-10 O-10 J-11 A-11 J-11 O-11 J-12 A-12 J-12 O-12 J-13 A-13 J-13 O-13 J-14 A-14 J-14 East Tennessee Natural Gas Customer Meeting 28

29 1,140 Effects of Marcellus Gas on ETNG 1,120 1,100 1,080 1,060 1,040 1,020 Knoxville Mt.Pleasant 1, East Tennessee Natural Gas Customer Meeting 29

30 Spectra Energy Natural Gas Storage Bcf across 9 fields East Tennessee Natural Gas Customer Meeting 30

31 W13-14 Peak Southern Storage Days Storage Field Unit Jan 6 Jan 7 Jan 8 Total Nom FSS -453, , ,621-1,653,821 Bobcat PALs/IT -250, , ,009-1,027,212 Subtotal -704,225-1,190, ,630-2,681,033 FSS -809,462-1,010, ,106-2,438,656 Egan PALs/IT -396, , , ,046 Subtotal -1,205,653-1,242, ,228-2,849,702 Moss Bluff FSS -366, , ,284-1,754,360 PALs/IT -435, ,560-67, ,000 Subtotal -802, , ,723-2,336,360 Totals -2,711,926-3,196,808-1,670,581-7,579,315 East Tennessee Natural Gas Customer Meeting 31

32 01-Nov Nov Nov Nov Nov Dec Dec Dec Dec Jan Jan Jan Jan Jan Feb Feb Feb Feb Mar Mar Mar Mar-14 Flexibility of Storage Services 2,000,000 1,500,000 1,000, ,000 Mid February: High Injections - (500,000) (1,000,000) (1,500,000) (2,000,000) (2,500,000) (3,000,000) (3,500,000) Solid Withdrawals Followed by heavy withdrawals East Tennessee Natural Gas Customer Meeting 32

33 LINK System Review Michael Peel Sr. Commercial Business Analyst LINK System

34 LINK Support Team Jeff Pekar (Group Leader) Eugene Brennan (Projects) Joyce Schubrick (Production Support) Sandra Bryant-Cardenas Bonnie Carroll Kim Chesler Cathy Johnson Stella Katshungu Elias Macal Michael Peel Blanca Rivera Muzammil Siddiqui Sean Zhang East Tennessee Natural Gas Customer Meeting 34

35 LINK System: Our Goal We are dedicated to LINK being the leading Customer Interface System in the natural gas transmission industry. This is achieved by: Identifying and implementing system enhancements that benefit customers Assisting customers effectively and efficiently Providing training throughout the year on the LINK System East Tennessee Natural Gas Customer Meeting 35

36 LINK Interface Changes March 2015: New home pages deployed March 2015 Deploy new home pages with internal screens and key external screens After March 2015: Gas storage facility Gas processing plant Propane terminal NGL storage Shale gas formations Crude storage Major oil pipeline terminal Individual screens will be activated when they have passed all quality assurance checks East Tennessee Natural Gas Customer Meeting 36

37 Did you know In LINK we provide various beneficial reports for customers A new report has been programmed based on a customer request called the Nomination Summary report Summarizes all nominations for a Shipper by Contract for a particular day Can run up to one month of data at a time Found under Reports > Nominations > Nominations > Nomination Summary East Tennessee Natural Gas Customer Meeting 37

38 Did you know The Nomination Summary report also provides a view of the nominations for a specific contract for a requested duration This report can be subscribed via our Report Subscription East Tennessee Natural Gas Customer Meeting 38

39 NAESB Recommended Gas Day Changes Summary of Gas Day Changes New nomination and capacity release timelines FERC order anticipated in early 2015 NAESB recommendations change the Timely nomination deadline from 11:30 AM to 1:00 PM The number of standard NAESB nomination cycles increases with the introduction of an ID3 cycle The timeline for biddable Capacity Release offers occurs three hours earlier Summary of LINK impacts LINK will be modified to meet new gas day timelines Changes will be needed in Capacity Release for the new timelines Staffing changes dependent on final timeline and customer activity East Tennessee Natural Gas Customer Meeting 39

40 Gas Day Changes Nominations Current vs. Proposed CYCLE TIMELY EVENING INTRA DAY 1 INTRA DAY 2 TYPE Nomination Deadline for Shippers Point Operator Confirmation Deadline Receipt of Final Scheduled Quantities Current 11:30 AM 3:30 PM 4:30 PM Proposed 1:00 PM 4:30 PM 5:00 PM Current 6:00 PM 9:00 PM 10:00 PM Proposed 6:00 PM 8:30 PM 9:00 PM Current 10:00 AM 1:00 PM 2:00 PM Proposed 10:00 AM 12:30 PM 1:00 PM Current 5:00 PM 8:00 PM 9:00 PM Proposed 2:30 PM 5:00 PM 5:30 PM Effective Start Time for Gas Flow 9:00 AM next gas day 4:00 AM next gas day 9:00 AM next gas day 4:00 AM next gas day 5:00 PM same gas day 2:00 PM same gas day 9:00 PM same gas day 6:00 PM same gas day INTRA DAY 3 Current NA NA NA NA Proposed 7:00 PM 9:30 PM 10:00 PM 10:00 PM same gas day All times in CCT (Central Clock Time). Bumping not allowed during ID3. East Tennessee Natural Gas Customer Meeting 40

41 2015 LINK Group Training Schedule Date April May June August October Location Houston Northeast Houston Houston Houston East Tennessee Natural Gas Customer Meeting 41

42 Feedback Spectra Energy is continually working to improve LINK The LINK Team solicits customer input so additional enhancements can be implemented that would provide value Contact Information LINK Help Jeff Pekar, Director (713) Michael Peel, Business Analyst (713) East Tennessee Natural Gas Customer Meeting 42

43 BREAK 43

44 Marketing Business Development and Regulatory Update George Snyder Director, Southeast Marketing

45 Wacker Project Provides gas supply to new hydrogen, steam and industrial processes for the manufacturing facility near Cleveland, Tennessee Project Scope: 5,700 MDth/d from Texas Eastern CapEx: $4.8 MM Customers: Wacker Chemie AG Project Status: In-service July 2014 Facilities: 2,800 feet of 8 inch line with launcher and receiver stations on East Tennessee Various pipeline modifications to accommodate 5,700 Dth/d supply from Texas Eastern Wacker Chemie Plant 5,700 Dth/d delivery 0.5 mile, 8 lateral East Tennessee Natural Gas Customer Meeting 45

46 Kingsport Project Facilities 61,000 Dth Reverse Contract Flow New Meter Station 61,000 Dth Kingsport Lateral Loop 6.4 miles 16 Nora Lateral Loop 3.4 miles 16 Nora 3401 Take up 8 and Relay 5.8 miles of 24 discharge GS Jewell Ridge Stone Mountain R R M Fordtown 3308 Bristol 3309 R R Glade Spring 3311 Saltville Storage Rural Retreat 3313 Early Grove Storage Glade Spring Station Reverse Piping Modifications Patriot Extension Transco Interconnect 61,000 Dth Receipt East Tennessee Natural Gas Customer Meeting 46

47 Kingsport Project Facilities Available West to East Capacity 8,000 Dth Nora Supply to Saltville Nora 3401 Jewell Ridge Stone Mountain Saltville Storage 8,000 Dth Radford East Delivery M R R Fordtown 3308 Bristol 3309 Glade Spring 3311 Rural Retreat 3313 R R 84,000 Dth Saltville/Jewell Ridge Supply to Transco Patriot Extension Transco Interconnect 76,000 MDth Delivery East Tennessee Natural Gas Customer Meeting 47

48 New Unsubscribed Capacity Posting Map East Tennessee Natural Gas Customer Meeting 48

49 New Unsubscribed Capacity Posting Detail Rate Schedule Transportation Path MDTQ Begin Date End Date FT-A TE Mount Pleasant up to Lewisburg Station on Line ,000 Existing N/A FT-A TGP Lobelville to the Shelbyville Lateral on Line Existing N/A FT-A Shelbyville Lateral 500 Existing N/A FT-A Nora Lateral 18 Existing N/A FT-A Saltville Storage to Greenville Lateral on Line ,023 Existing 10/31/2014 FT-A Saltville Storage to Greenville Lateral on Line ,023 11/1/2014 N/A FT-A Patriot FT-A FT-A FT-A Patriot Cascade Creek to TGP Ridgetop 1,600 Existing N/A SNG Bradley - Various points on the mainline system up to Topside Junction SNG Bradley - Various points on the mainline system up to Topside Junction 47,887 Existing 8/31/2016 7,887 9/1/2016 N/A Saltville Storage to Cascade Creek 4,500 Existing N/A FT-A Stone Mountain Lateral 14,300 Existing N/A FT-L Jewell Ridge Lateral 12,500 Existing N/A Capacity on all FT-A Rate Schedules may be available on an East to West path. Available quantities vary depending upon receipt and delivery points and must be determined on a request by request basis.. East Tennessee Natural Gas Customer Meeting 49

50 Regulatory FERC Reservation Charge Credit No FERC action to date PHMSA August 2011 PMSA issues APRM (Record verification of MAOP) Estimate NOPR to be published in 2015 Final regulations to follow Expected implementation in 2017 Integrity Management Program Costs expected to drive Rate Case timing East Tennessee Natural Gas Customer Meeting 50

51 Planning in the Uncertain World of Energy & Geopolitics G. Allen Brooks Managing Director, PPHB, LP

52 Recognized by:

53 Today s Activities Afternoon Lunch pick up at Pavilion Horseback riding at the Sporting Club Golf shotgun start Sporting clays at the Sporting Club Spa treatments at spa facility Evening Reception Town Hall Dinner Pavilion Terrace Hospitality Suite Godfrey Terrace 11:00am 11:45am 12:30pm 12:45pm Individual times 7:00 pm 8:00 pm After dinner East Tennessee Natural Gas Customer Meeting 53