in Canada Click to edit Master title style Tim Stauft President, Aux Sable Canada Gas Processors Association, San Antonio, Tx April 8, 2013

Transcription

1 Click to edit Master title style Gas Processing Challenges in Canada Gas Processors Association, San Antonio, Tx April 8, 2013 Tim Stauft President, Aux Sable Canada Slide 1

2 Click Outline to edit Master title style Click Who to edit is Aux Master Sable text styles Second level Canadian Gas Processing Margins Canadian NGL and Gas Market Overview and Forecast Canadian Market Risks & Opportunities Conclusion Slide 2

3 Click Aux Sable to edit Operations Master title style A world-class rich gas gathering and processing system bringing value to producers Second level Slide 3

4 Click Alliance to edit Pipeline Master and title Aux style Sable Click Provide to a edit value Master added text option styles to field processing to minimize investment/ maximize Second value level Slide 4

5 Click Canadian to edit Natural Master Gas title Prices stylestill Depressed AECO Second prices level lowest in 10 yrs Storage levels near capacity in Canada Gas well completion in WCSB down Shale gas development has altered the supply/demand balance in North America Expect gas prices to remain low for the foreseeable future, which will continue to impact marginal gas production in the WCSB Source: GLJ Slide 5

6 Click Alberta to Gas edit Processing Master title Throughput style Declining MM Mcf/d Source: ERCB Slide 6

7 Click Canadian to edit Natural Master Gas title Production style Distribution Western Canada produces over 98% of Canada s total gas, with growing percentage coming from BC s shale play. Source: Canada National Energy Board Slide 7

8 Click Eastern to edit Canada Master Production title style Interest Waning Despite recent offshore N.S parcel purchases by Shell and BP, low gas prices, growing Marcellus production are bearish factors for Eastern Can. production growth. Slide 8 Source: Canada National Energy Board

9 Click Future to Gas edit Processing Master title Margins style in AB??? Source: IHS Purvin & Guertz Slide 9

10 Click Canada to edit and US Master Natural title Gas style Production (Bcf/d) * * Marketable Production Source: US Energy Information Agency, Canada National Energy Board Slide 10

11 Click Canadian to edit Gas Master Exports title Continue style to Decline Bcf/d Source: EIA Slide 11

12 Click Natural to Gas edit Infrastructure Master title style Developments Market Shift Gas Second from the level WCSB faces increasing competitive in traditional Eastern markets Trans Third Canada level Mainline Restructuring decision expected soon from NEB Demand Fourth within level the WCSB continues to grow fuelled mostly by growth in oilsands Natural gas production propped up by NGL prices A New Hope? Numerous LNG projects and pipelines have been announced off the West Coast Proposed Pipeline projects TransCanada 3.8 bcf/d to 8.6 bcf/d (Coastal Link and Prince Rupert Transmission Project) Spectra 4.2 bcf/d KM LNG 1.0 bcf/d Three export licenses granted by NEB Potential NGL exports via west coast LNG but hurdles exist Role for Canadian Gas in the US Canadian gas and NGLs continue to be competitive with US markets in the Midwest & Gulf Coast Slide 12

13 Click Producers to edit Continue Master title to Focus style Click on Liquids to edit Master Rich text styles Plays Slide 13

14 Click NGLs Value to edit Still Master Driving title Liquids style Focus Second Henry level Hub and WTI Prices Energy Spread: WTI - Henry Slide 14

15 Click US NGLs to edit Production Master on title the style Rise MB/D Source: US Energy Information Agency Slide 15

16 Click NGLs Critical to edit Master to Drilling title Decisions style Click in Western to edit Master Canada text styles March 2002 Raw Fourth Gas level(c$3.84/mcf) NGLs = C$1.18/mcf (31%) March 2012 Raw Gas (C$3.53/mcf) NGLs = C$2.10/mcf (60%) Butanes $0.16 Pentanes+ $0.31 Pentanes+ $0.94 Methane $1.42 Propane $0.24 Ethane $0.47 Butanes $XXXX $0.58 Methane $2.65 Propane $0.31 Ethane $0.27 Note: Based on March 2012 gas and Edmonton NGL reference prices, netted back to the plantgate, assuming recoveries of 80% C2, 97% C3, and 100% C4+, from 1100 btu/cf raw gas. Netbacks prices only, no deduction for field plant extraction and capital costs. Slide 16

17 Click to edit Master title style Market Access Options for Western Canadian NGLs Alliance Produce Raw Gas Dew-Point Plant (C5+ Extracted) Aux Sable Rich Gas to Alliance Pipeline Extraction Premium from Aux Sable Alberta/Chicago Gas U.S. NGL Markets C5+ Edmonton TCPL / Pembina Produce Raw Gas Refrig or Deepcut Plant C3+ or C2+ to Edmonton Frac/Market Alberta Gas Market Edmonton NGL Market West Coast LNG Produce Raw Gas Dew-Point Plant (C5+ Extracted) Lean Gas to TCPL Rich Gas to Spectra/TCPL Rich Gas to Asia as LNG C5+ Edmonton Slide 17

18 For Western Canada, Access to U.S./International Click to Ethane edit Master title style NGL Markets is Critical Click 1600to edit Master text styles kbpd (Thousand barrels / day) kbpd (Thousand Barrels / Day) Imports Prodn AB AB Supply Demand Prodn Excess Supply Propane Rail Exports Exports on ENB AB AB SupplyDemand Demand Cochin Exports to US 85% of Supply 2012/ Prodn Demand US US Supply Demand Exports 2012 Exports US US SupplyDemand Exports to Canada on Vantage and Mariner East Net Waterborne Exports 18% of Supply Alliance Pipeline Empress Edm/Ft. Sask. NGL Markets: Edmonton, Sarnia, Conway & Mt Belvieu. NGL Pipelines Conway Chicago Mt. Belvieu Cochin Enbridge Sarnia Slide 18 Source: Petral, En*Vantage, Aux Sable.

19 Click Summary to edit Master title style Click In to the edit short-term, Master text Canadian styles gas processors face challenges Long term, NGLs value will help support Gas Processing margins Access to premium markets essential for Canadian Producers Aux Sable is well positioned to assist producers in capturing enhanced NGL and gas value without costly capital investments or long-term take or pay obligations Slide 19

20 Click Contact to edit Information Master title style Click Tim to edit Stauft Master text styles Second President, level Aux Sable Canada Slide 20