UNIT VS. MANIFEST TRAINS Presented by: Jarrett Zielinski President & CEO of TORQ Transloading

Transcription

1 UNIT VS. MANIFEST TRAINS Presented by: Jarrett Zielinski President & CEO of TORQ Transloading 1

2 Disclaimer Certain information provided in this presentation constitutes forwardlooking statements. The words may, will, plan, predict, estimate, believe, continue, intends, anticipate, expect, or project, and similar expressions are intended to identify such forward-looking statements. Although TORQ Transloading Inc. or any affiliate thereof (collectively TORQ ) believes such statements are based on reasonable assumptions, such statements are subject to certain risks, changes in government regulation, uncertainties and assumptions pertaining to operating performance, regulatory parameters, energy markets, economic conditions, etc. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary significantly from those expected. The cautionary statements qualify all forward-looking statements attributable to TORQ and persons acting in or on its behalf. 2

3 Agenda Who is Torq Transloading Inc.? Assumptions/Overview Manifest Train Discussion Unit Train Discussion Manifest & Unit Train Economics Pipeline Economics Conclusion 3

4 Who is TORQ Transloading Inc. Borne from producer demand for takeaway alternatives in single shipper market Currently operate 6 crude-by-rail terminals in Alberta and Saskatchewan 35,000-40,000 bpd Independent fee-for-service midstream service company Sister company Goulet Trucking Integrated truck-to-rail package Kerrobert Pipeline to rail 2014 WCSB Market Share (December 2012) 76% 24% Torq Others Product exposure is 80% Heavy - 20% Light 4

5 Who is TORQ Transloading Inc. KERROBERT, SK 5

6 Rail Terminal Assumptions/Overview All rail terminals are different thus so are economics Geography Available land Proximity to rail WCSB is NOT Bakken Bakken One homogeneous light density product, virtually no pipe takeaway WCSB Multitude of crude types Primarily heavy crude Significant pipeline infrastructure Heavy undiluted crude requires heating to ~80 degrees Celsius to overcome high viscosity Each crude type requires additional infrastructure and procedures 6

7 Manifest Trains/Loading 7

8 Manifest train: Manifest Trains/Loading Comprised of small blocks mixed car types and cargos Multiple commodities, origins and destinations Cars aggregated at distribution yard Manifest Loading Operations: Not all manifest operations are the same Track/Siding typically less than 40 cars Land area typically less than 20 acres Portable metering move meter to the cars Trucked in crude oil production Loaded directly to tank car through custody transfer meter At least one operator per meter/car being loaded Small blocks of cars filled and released for pick up daily 8

9 Pros & Cons of Manifest Trains Pros: Speed to operations Relatively low capital requirements Generally direct truck-to-rail Portable measurement instrument Generally no need to move cars Basic permitting/regulatory approval required Often using existing rail infrastructure Scalable Neatness preserved Reach niche production areas Requires few rail cars Cons: Economies of scale limitations Rail freight costs Truck meets train logistics Non dedicated rail service Labour intensive/less automated Longer turn times/ Tank car costs Heavy crude heat loss 9

10 Unit Trains/Loading 10

11 Unit Trains/Loading Unit train: Assembled at single origin, disassembled at single destination Comprised of single commodity Train is not broken up or stored at distribution yard Unit Train Loading Operations: Not all unit train terminals are created equally Ladder vs. Loop $85MM to $125MM capital cost Trend toward 120 car trains (7,800 feet) Terminals trending to 35,000 feet of track Typically requires 200+ acres of relatively flat land Fixed metering and loading infrastructure Tankage required for rateability (3:1 daily throughput) Pipe or truck to tank to rail Bulk loading 118 cars in 12 hour period Automated loading and spill prevention program 11

12 Pros & Cons of Unit Trains Pros: Economies of scale Bulk loading Rail freight efficiencies Less heavy crude cooling Reduced turn times Dedicated rail service Less labour intensive Remove truck rateability from rail service via tanks Scalable Neatness preserved Most suitable for oil hub locations Cons: Relatively high capital costs Longer lead time (12 18 months) Current destination market limitations Not suitable for niche production areas Requires significant car fleet 12

13 13 The Same But Different

14 Economics: Manifest vs. Unit

15 Economics: Manifest vs. Unit vs. Pipeline

16 Conclusion: Manifest vs. Unit vs. Pipeline

17 THANK YOU Questions & Answers Welcome 17