Questar Pipeline Current Capacity and Development

Transcription

1 Questar Pipeline Current Capacity and Development Gary A. Schmitt Manager, Marketing and Business Development April 27, 2007 Platts Rockies Gas and Oil Conference 1

2 Agenda Questar Pipeline Overview Basin Projections for Production vs. Pipeline Capacity Pipeline Expansion Projects Case Study Southern System Expansion II Finding Resources Paying for Pipeline Projects Covering the Costs Storage Update Summary 2

3 Questar Pipeline System Map 3

4 Questar Pipeline Transportation Consolidated Contract Demand 3,500 3,000 2,500 MDth/day 2,000 1,500 1,

5 Rockies Producing Basins UTAH PINEDALE / JONAH GREATER GREEN RIVER BASIN WYOMING GREEN RIVER BASIN COLORADO UNITA BASIN UINTA BASIN PICEANCE BASIN Questar Pipeline Other Pipelines Producing Basins PICEANCE BASIN 5

6 Production vs. Pipeline Capacity GREATER GREEN RIVER BASIN UTAH 7,000,000 Production is forecast to 6,000,000 exceed pipeline capacity 5,000,000 4,000,000 in our core basins. GREEN RIVER 3,000,000 2,000,000 BASIN Dth/d 1,000,000 Greater Green River Basin Pipeline Capacity vs. Production Production So ut hern St ar 19 4,0 0 0 CIG-WIC 1,365,000 NPC 500,000 KRGT 1,770,0 00 WYOMING 1,400,000 Uinta Basin Pipeline Capacity vs. Production 0 QOPC-QPC 250, * Production forecast assumes 600 wells drilled per year through 2015 COLORADO Dth/d 1,200,000 Production 1,000, ,000 CIG -UBL - 230, ,000 NPC - 95, ,000 QPC - 600, , UINTA BASIN * Production forecast based on PIRA Study dated September ,000 Dth/d 2,500,000 2,000,000 1,500,000 1,000,000 Piceance Basin Pipeline Capacity vs. Production REX West - Piceance Lateral 750,000 WIC Piceance Lateral 350,000 Production TransColorado 425,000 Questar Pipeline Other Pipelines Producing Basins UINTA BASIN NPC - 330,000 0 QPC -120, * Production forecast based on PIRA Study dated September 2006 PICEANCE BASIN 6 PICEANCE BASIN

7 Rockies Producers Are Seeking To Expand Export Capacity Northwest Northwest Goshen Goshen California California Opal Hub Opal Hub Meeker Greasewood Meeker Greasewood Cheyenne Hub Cheyenne Hub Wamsutter MidContinent MidContinent Midwest Midwest Northeast Northeast Ohio Valley Ohio Valley East East Louisiana Louisiana 7

8 Expansion Projects Overthrust Pipeline Expansions Opal Wamsutter Southern System Expansions to Greasewood and Meeker Fidlar to Greasewood/Meeker Divide Creek to Greasewood/Meeker Southern System Expansion II 8

9 Overthrust Pipeline Expansions PINEDALE FIELD Overthrust Pipeline Questar Pipeline Questar Pipeline Other Pipelines Other Pipelines Utah Opal Plant JONAH FIELD 1 OVERTHRUST TO OPAL In Service: 12/31/06 Volume: 300 MDth/d Capacity: 500 MDth/d Distance: 27.1 miles 2 KANDA TO WAMSUTTER In Service: 12/31/07 Volume: 750 MDth/d Capacity: 1 BCF/d Distance: 77.3 miles WAMSUTTER 1 2 Clear Creek Storage Blacks Fork Plant Wyoming Granger Plant Kanda Compressor 9

10 Overthrust Pipeline Expansion to Opal Up to 500,000 Dth/d of capacity to Opal (West deliveries) New 27.1 mile pipeline extension to Opal Deliveries to Kern River at Opal 300,000 Dth/d capacity subscribed January 1, 2007 in-service date No fuel charge, lost and unaccounted for only 10

11 Overthrust Pipeline Expansion to Wamsutter Capacity of 750,000 Dth/d -fully subscribed 77.3 mile extension from Kanda to Wamsutter Two new compressor stations at Roberson Creek and Kanda Deliveries to Rockies Express and WIC New receipt points: Williams Opal Plant, Enterprise- TEPPCO Pioneer Plant and QGM Blacks Fork Plant January 1, 2008 in-service date Fuel rate anticipated to be less than 1% (high load factor) 11

12 Expansions to Greasewood/Meeker Hub REX WIC Questar Pipeline Other Pipelines Fidlar Compressor Meeker Delivery Greasewood Delivery 2 DIVIDE CREEK TO GREASEWOOD 1 In Service: 11/1/08 Volume: 200 MDth/d Distance: 37 miles Sand Springs Delivery 2 1 BONANZA TO GREASEWOOD/MEEKER Divide Creek Receipt In Service: 11/1/08 Volume: Up to 540 MDth/d Distance: 60 miles 12

13 Potential Expansion for Deliveries to Greasewood/Meeker Hub Potential expansion to provide deliveries of up to 540,000 Dth/d Receipt points at Fidlar Station (Uinta Basin) Delivery to Greasewood/Meeker hub to Rockies Express, WIC and TransColorado Approximately 60 miles of 24-inch diameter pipeline from Bonanza to Greasewood/Meeker for large volume requirements Various volume options have been evaluated Proposed in-service date November 1,

14 Deliveries to Greasewood/Meeker- continued Initial project is minor line looping and compression: Compression at Greasewood High pressure Interconnection with REX at Meeker New hub pipeline between Greasewood and Meeker Capacity of 50,000 Dth/d available on a first-come, first-served basis. QPC currently negotiating with several parties Maximum rate and 15-year term required to acquire capacity Delivery to Greasewood/Meeker hub to Rockies Express, TransColorado, and possibly WIC Proposed in-service date November 1,

15 Divide Creek to Greasewood/Meeker Expansion of 200,000 Dth/d from Piceance Area to Greasewood Receipt points: Divide Creek - 100,000 Dth/d Clough/Rulison - 100,000 Dth/d New facilities include 37 miles of 24-inch diameter pipe and compression Target November 1, 2009 in-service date Smaller project of 25,000 Dth/d expansion recently subscribed. Can be provided with compression by 11/1/08. Additional processing at Greasewood allows increased volumes from the Divide Creek Area 15

16 Case Study: Southern System Expansion II Goshen Delivery Southern System Expansion II In Service: 11/1/07 Volume: 175 MDth/d Blind Canyon Compressor Distance: 59 miles Payson Delivery ML104 Loop ML104 Ext Fidlar Compressor Questar Pipeline Other Pipelines Thistle Compressor Price Oak Springs Compressor 16

17 Case Study: SSXP II Project Description Construct 59 miles of 24-inch diameter pipe in Carbon, Duchesne and Uintah Counties, Utah ML104 Ext 53.9 miles east from Soldier Creek to Green River BV on ML 40 ML104 Loop miles between Fausett Junction and Oak Spring Interstage 53% BLM, 43% Private, and 4% State 15 landowners No new compressor stations modifications at existing Oak Springs and Blind Canyon stations FERC 7(c) application filed on November 21, 2006 Anticipated Start of Construction: May 1, 2007 In-service date: November 1, 2007 Estimated capital cost: $108 Million, a 49% increase from $73 Million estimate in March

18 Case Study: SSXP II Proposed Route 18

19 Google Earth Video (SSXP II) ML104 Ext 53.9 miles east from Soldier Creek to Green River block valve on ML 40 19

20 Black Diamond Slope in Water Canyon (SSXP II) One of the steepest slopes on the QPC system. Drop is over 900 ft. Average Slope is almost 30%. 20

21 Backside of a Slope in Water Canyon (SSPX II) 21

22 Case Study: Finding Resources for Expansions SSXP II Pipeline contractors Had to do two job showings Evaluated 30 contractors 13 contractors reviewed the job Only 3 provided bids/proposals Contractor concerns Lack of resources (manpower and equipment) Difficult terrain Materials 24 inch pipe has a lead time of 9 to 12 months 24 inch valves have a lead time of at least 6 months 22

23 Case Study: Paying for Expansions SSXP II 49% increase in Capital cost: $73 Million (March 2006 Estimate) Pipeline construction contractor costs based on $87 / ft (Almost 1½ times the SSXP I contractor costs which was constructed Fall 2005.) $108 Million (November 2006 Estimate) Pipeline construction contractor costs based on $190 / ft (Almost 3½ times the SSXP I contractor costs.) 23

24 Case Study: Covering the Costs SSXP II Need for longer term contracts (15 years) Increased rates (SSXP I and SSXP II are priced at $0.26/Dth/day vs. system maximum of $0.18) Expectations of delays in completion due to many factors including but not limited to: regulatory delay, environmental issues, backorder or unavailability of parts, skilled labor going to easier projects, etc. 24

25 Storage Update At Clay Basin Storage at Clay Basin continues to be an integral part of natural gas markets in the Rockies Temperatures well below normal in the Great Basin area in January demonstrated the importance of Clay as a source of supply Pipeline capacity constraints during the summer demonstrated the importance of Clay as market 25

26 12/27/2006 1/10/2007 1/24/ , , , , , ,000 Clay Basin Activity 7/27/2005 8/10/2005 8/24/2005 9/7 /2005 9/21/ /5/ / 19/ /2/ /16/ /30/ /14/ /28/2005 1/11/2006 1/25/2006 2/8 /2006 2/22/2006 3/8 /2006 3/22/2006 4/5 /2006 4/19/ /3/2006 5/17/ /31/2006 6/14/2006 6/28/2006 7/12/2006 7/26/2006 8/9 /2006 8/23/2006 9/6 /2006 9/20/ /4/ / 18/ /1/ /15/ /29/ /13/2006 MCF Injections Clay Basin and Injection/Withdrawal Withdrawals June (6/05-2/07) 5, 2006 to Feb. 7, /1/2005 6/15/2005 6/29/2005 7/13/2005

27 Clay Basin Yearly Comparisons MM dths Clay Basin Working Gas Inventory APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR Min/Max Range '05-06 '06-07 AVG

28 Other Potential Storage Opportunities Southwest Wyoming Salt Cavern Located near Evanston, WY Ultimate capability 12.5 Bcf working gas initially 5 Bcf Potential deliverability of 500 MMcf/day associated with 5 Bcf of storage Increased interest due to new electrical generation and eastern markets Interconnects with QPC and Kern River with potential tie to Overthrust Pipeline Potential storage of liquids and compressed air Other Potential Storage Projects 28

29 Summary Questar Pipeline along with other pipeline companies is trying to keep up with production growth in the Rockies by pursuing major expansion projects. The path to complete these projects is arduous in many ways with geography, regulatory and environment, manpower, materials and cost challenges to overcome. Questar Pipeline greatly appreciates its customers in their willingness to support projects. 29