craig r. coombs -...
TRANSCRIPT
Craig R. CoombsDirector, Business Development
Ruby and Supply UpdateWyoming Pipeline Authority
El Paso Western Pipeline April 20, 2010
This presentation includes certain forward-looking statements and projections. The company has made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this presentation, including, without limitation, our ability to close the project financing for Ruby, including our ability to satisfy various conditions precedent such as the execution of definitive loan agreements, receipt of regulatory approvals for the project, execution of transportation agreements and associated credit support arrangements with our customers and completion of due diligence by the lenders; our ability to obtain necessary governmental approvals and our ability to successfully construct and operate Ruby on time and within budget; changes in commodity prices and basis differentials for oil, natural gas, and power; general economic and weather conditions in geographic regions or markets served by the company and its affiliates, or where operations of the company and its affiliates are located; the uncertainties associated with governmental regulation; competition; and other factors described in the company's (and its affiliates') Securities and Exchange Commission (SEC) filings. While the company makes these statements and projections in good faith, neither the company nor its management can guarantee that anticipated future results will be achieved. Reference must be made to those filings for additional important factors that may affect actual results. The company assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by the company, whether as a result of new information, future events, or otherwise.
Cautionary Statement RegardingForward-looking Statements
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Ruby Pipeline Map
U T A H
N E V A D A
O R E G O N
C O L O R A D O
I D A H O
C A L I F .
W Y O M I N G
CIG
Kern River
Paiute
Tuscarora
PG&E
GTN
WIC
CheyennePlainsUinta
Basin
PiceanceBasin
RatonBasin
DenverJuelsburg
Powder RiverBasin
Big HornBasin
Wind RiverBasinGreen River
Basin
Opal Hub
675 miles of 42-inch Opal to Malin1,440 psig MAOPFour receipt and four delivery pointsReceipts from the major Rocky Mountain producing basinsEstimated Cost $3 Billion
NWPL
Cheyenne
Ruby
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Ruby Stats
1.1 Bcf/d of firm transportation service agreements with customersInitial capacity will be 1.5 Bcf/d
Planning to install all four compressor stations$1.5 billion of project financing commitments secured
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Ownership Structure
Project financed pipeline
50/50 between Global Infrastructure Partners and El Paso
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Overview of Global Infrastructure Partners
Global Infrastructure Partners portfolio
GIP Overview
GIP is a committed equity partner with a unique combination of experience, focus and resource$5.64 billion fund founded by GIP Managers, Credit Suisse and General ElectricIndependent Manager led by industry experts– 8 Partners, 22 experienced Investment / Operating Principals with over 200 years of relevant experience and collective team
investment of approximately $65 millionExpertise in focused sectors and sub-sectors with target geographies in OECD and select emerging market countries Energy,Transportation and Waste / WaterTargets control / control-oriented investments76% of the fund or $4.3 billion invested / committed in 10 companies
(1) Illustration.
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Gatwick Airport (2009) Terra-Gen Power Holdings (2009) Chesapeake Midstream (2009) Ruby Pipeline (2009) Channelview Cogeneration (2008)
International Trade Logistics (2008) Biffa Limited (2008) East India Petroleum Ltd. (2007) Great Yarmouth Port (2007) London City Airport (2006 )
(1)
Ruby Pipeline Milestones
CPUC Approves PG&E ContractDraft EIS
Partnership with GIP AnnouncedPreliminary Determination
Final EISFERC Certificate
Financial ClosingBLM Record of Decision
Start ConstructionIn-Service
November 2008June 2009July 2009September 2009January 2010April 2010
April / May 2010April / May 2010 May / June 2010March 1, 2011
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FERC Certificate Docket No. CP09-54Website: www.rubypipeline.com
Certificate HighlightsAuthorization conditional on Ruby:
• contracting and placing in-service Facilities described in Order within 2 years (April 5, 2012)
• execution of FTSA’s reporting levels and terms of service in PA
FERC granted rehearing and approved the following:• voluntary Greenhouse Gas Cost recovery per the tariff• 50% sharing of IT and short term after Ruby is sold out (unless neg rate shipper
does not have that in their contract)• usage charge based upon a 90% load factor (no change in filed rates)• inclusion allowance for funds used during construction (AFUDC) in filed rates (no
change to rates as filed and no impact on neg rate shippers)
FERC denied the following:• mandatory GHG cost recovery (without prejudice to future proposal if Ruby
incurs such costs• recourse rates based on less than 100% of capacity (Ruby’s filed recourse rate
will drop as a result)• proposed separate cost and revenue true up recovery provisions for Fuel
imbalances and gas balancing. 9
Construction Highlights
Pipe and compression equipment purchased
High quality Pipeline contractor teams under contract and ready to mobilize
U.S. Pipeline, Precision Pipeline, Associated Pipeline andRockford Corporation
Compressor Station bids being awarded
90% of ROW acquired
Aggressive public and NGO outreach continuesAnticipate Notice to Proceed and commencement of construction by end of June
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New Gas Development - 2011Henry Hub Prices – 10% IRR – Excludes Sunk Costs (Land, Seismic, etc.)
Horn RiverMontney
Other Canadian Basins
Source: El Paso Strategy 12
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2,000
4,000
6,000
8,000
10,000
12,000
14,000
1990
1992
1994
1996
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2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
Gas
Pric
es ($
/Dth
)
DenverPiceanceUintaPowder RiverOverthrustGreen RiverWind RiverBig Horn2009 ForecastCompletions w/o PowderHenry Hub
Rocky Mountain Production(Volumes are Wellhead – Measured in MMcfd)
1990-2008: Wellhead total data from IHS database2009-2020: El Paso forecast
Forecast by 2020:
High Case 13,882 Mid Case 12,656Low Case 11,427
Forecast
1.8 Bcf/d ofgrowth 2009-2020
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Canadian Net Exports
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2
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7
8
9
10
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Bcf
/d
NEB Energy Market Assessment 2009 w/o HR, Montney & N SlopeZiff Feb 2010 w/o HR, Montney & N SlopeWoodMac LTV Dec2009 w/o HR, Montney & N Slope
North Slope Gas
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-0.50
0.51
1.52
2.53
3.54
4.5
Jan-
06M
ay-0
6Se
p-06
Jan-
07M
ay-0
7Se
p-07
Jan-
08M
ay-0
8Se
p-08
Jan-
09M
ay-0
9Se
p-09
Jan-
10M
ay-1
0Se
p-10
Jan-
11M
ay-1
1Se
p-11
Jan-
12M
ay-1
2Se
p-12
Jan-
13M
ay-1
3Se
p-13
Jan-
14M
ay-1
4Se
p-14
Jan-
15M
ay-1
5Se
p-15
Bas
is ($
/Dth
)
AECO Basis to Opal
Kiodex EP MacroActuals - NGI Actual Annual Averages
-1.4
-1.2
-1
-0.8
-0.6
-0.4
-0.2
0
0.2
Jan-
06M
ay-0
6Se
p-06
Jan-
07M
ay-0
7Se
p-07
Jan-
08M
ay-0
8Se
p-08
Jan-
09M
ay-0
9Se
p-09
Jan-
10M
ay-1
0Se
p-10
Jan-
11M
ay-1
1Se
p-11
Jan-
12M
ay-1
2Se
p-12
Jan-
13M
ay-1
3Se
p-13
Jan-
14M
ay-1
4Se
p-14
Jan-
15M
ay-1
5Se
p-15
Bas
is ($
/Dth
)
AECO Basis to Henry
Kiodex EP Macro WoodMac Actuals - NGI
2011 to 2015 AveragesKiodex $-0.48EP Macro $-0.33WoodMac $-0.38
AECO and Rockies Basis to Henry
Economic Pricing Assumptions:• Horn River: wellhead to Henry = $-1.25/Dth• Montney: wellhead to Henry = $-1.00/Dth• AECO to Henry = $-0.40/Dth• Opal to Henry = $-0.40/Dth
Henry
Forward curves reflect Ruby effect of bringing Opal and AECO prices together
-1.4
-1.2
-1
-0.8
-0.6
-0.4
-0.2
0
0.2
Jan-
06M
ay-0
6Se
p-06
Jan-
07M
ay-0
7Se
p-07
Jan-
08M
ay-0
8Se
p-08
Jan-
09M
ay-0
9Se
p-09
Jan-
10M
ay-1
0Se
p-10
Jan-
11M
ay-1
1Se
p-11
Jan-
12M
ay-1
2Se
p-12
Jan-
13M
ay-1
3Se
p-13
Jan-
14M
ay-1
4Se
p-14
Jan-
15M
ay-1
5Se
p-15
Bas
is ($
/Dth
)
Opal Basis to Henry
Kiodex EP Macro Actuals - NGI
2011 to 2015 AveragesKiodex $-0.45EP Macro $-0.34
Henry
2011 to 2015 AveragesKiodex $-0.03EP Macro $0.02
2006 to 2009 AverageActual - NGI $0.97
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