marcellus and utica shales asset overview
TRANSCRIPT
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Ohio Gas Association
Marcellus and Utica Shales
Asset Overview
Mike Anderson
NiSource Gas Distribution
March 22 2013
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Marcellus and Utica Shales
Discussion Topics • General
– Location
– Geographic Extent
– Wet vs. Dry Gas
• Infrastructure – Transmission Pipelines
– Gathering/Processing
– NGL
– Distribution Implications
• Producer Activities
• Infrastructure Challenges – Local Distribution Company
– Pipelines
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Marcellus and Utica Shales
What are the Marcellus and Utica Shales?
– Location
– Potential
– Gas Quality
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Marcellus and Utica Shales
Source: US EIA
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Marcellus and Utica Shales
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Marcellus and Utica Shales
Source: Range Resources
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Marcellus and Utica Shales
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Source: Ohio Geological Society Survey,
as modified by Ross Smith Energy Group
Initial Perspective on Potential Utica Production
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Marcellus and Utica Shales
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Updated Perspective on Potential Utica Production in Ohio
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Marcellus and Utica Shales
Modifying Views on Production
Source: EVEP Source: Mark West
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Infrastructure – Transmission Pipelines
– Gathering/Processing
– NGL
– Distribution Implications
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Marcellus and Utica Shales
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Marcellus and Utica Shales
Major Interstate Pipeline Systems
TCO
DTI
TET
TGP
REX TCO
TET
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Marcellus and Utica Shales
Major Interstate Pipeline Systems
TCO
DTI
TET
TGP
REX TCO
TET
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Proposed Interstate Pipeline Expansions - Utica • Texas Eastern – Ohio Pipeline Energy Network (OPEN)
– Transport up to 1 Bcf/d to TETCO’s mainline in Monroe Co., OH
– In service date targeted for 2015
• NEXUS Gas Transmission – JV between Spectra/DTE/Enbridge
– Transport up to 1 Bcf/d to upper Midwest and eastern Canadian markets
– In service date: November 2016
• Columbia Transmission – QuickLink Project
– Transport up to 500 MMcf/d to interconnections with TCO, DTI, REX, TET
– In service date: November 2015
• Tennessee – Negotiating backhaul arrangements from eastern Ohio
to Zone 1.
– 350 – 500 MMcf/d possible to interconnect with Midwest Gas Transmission
• Rockies Express
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Marcellus and Utica Shales
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Natural Gas Processing Facilities - Marcellus Separation
• Mark West – Houston, Majorsville, Mobley, Sherwood, Bluestone
– Existing capacity : 1.1 Bcf/d; 2013 additions: 1.1 Bcf/d; 2014 additions: 700 MMcf/d
• Williams – Fort Beeler, Oak Grove, Stewart, Robin Hill
– Existing capacity: 520 MMcf/d; future additions: up to 600 MMcf/d
• Blue Racer (formerly DTI) – Natrium, Hastings
– Existing capacity: 380 MMcf/d; future additions: up to 200 MMcf/d
Fractionation (Bbl/day)
• Mark West – Houston
– Existing capacity: 60,000 C3+; 2013 additions: 76,000 C2; 2014: 38,000 C2
• Williams – Fort Beeler
– Existing capacity: 13,000 C3+; future additions: 60,000 C3+ and 40,000 C2
• Blue Racer – Natrium
– 36,000 C3+
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Natural Gas Processing Facilities - Utica Separation
• Mark West – Cadiz; Seneca
– 785 MMcf/d by year end 2013
• M3/Access/EVEP – Kensington, Leesville, Harrison
– 600 MMcf/d by year end 2013; 200 MMcf/d by year end 2014
• Pennant Midstream (Nisource/Hillcorp)
– 200 MMcf/d mid-2013
• Blue Racer – Petersburg, Berne, Lewis
– 200 MMcf/d in 2014
Fractionation (Bbl/day)
• Mark West – Hopedale
– 60,000 C3+ and 40,000 C2 by year end 2014
• M3/Access/EVEP - Harrison
– 90,000 C3+ and 45,000 C2
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Marcellus and Utica Shales
LPG Transmission Options
Mariner West
40 Mb/d Mariner East
Mariner Pipelines
TEPPCO C3+
ATEX C2
ATEX
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Marcellus and Utica Shales
• Producer Activities – Rig Count
– Utica Permitting Activity
– Horizontal Drilling/Facing Operations
– Marcellus (Pa.) Production History
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Active Drilling Rigs by Month
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Marcellus and Utica Shales
• Through 3-9-12 567 Permits have
been Issued – 268 wells have
been drilled
• 75 wells presently producing
• Producer statements seem to
indicate that productive window
does not go as far westward as
mapped by DNR
• Producer statements generally
positive on Utica potential
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Recent Completion Highlights
– Rex Energy: 3 wells IP average 3000+ Boepd
– Chesapeake: 3 wells IP average 1830 Boepd
– Gulfport: 4 wells IP average 2560 Boepd
– Antero: 1 well IP at 2230 Boepd
– Consol/Hess: 2 wells IP average 912 Bcpd and 12.5 MMcf/d
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Marcellus and Utica Shales
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Marcellus and Utica Shales
Treatable Groundwater Aquifers Private Water Well <500 ft.
Utica – 7,000 to 8,000’ Below Surface
Horizontal Drilling and Fracturing
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Marcellus and Utica Shales
533
1477
2395
3432
4916
6141
8511209
1639
2257
2874
3560
0
1000
2000
3000
4000
5000
6000
7000
Jul 09 - Jun 10 Jul - Dec 2010 Jan - Jun 2011 Jul - Dec 2011 Jan - Jun 2012 Jul - Dec 2012
MC
F p
er
Day
Average Daily Production No. Producing Wells
Average Pa. Daily Marcellus Production and No. of Producing Wells
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Marcellus and Utica Shales
Infrastructure Challenges
• High BTU values and large flow rates Challenge COH
Utilization
– High BTU Values Create Operational and Safety Concerns
• Isolated, small temperature-sensitive markets unable to accept large
volumes
• Liquid drop-out from untreated High BTU gas can plug low pressure lines
and create significant safety issues if liquids reach burner tips
– High BTU Values Create Earnings/Revenue Challenges
• Residential and small Commercial customers billed on volume not energy
content
– Industrial Customer Impacts
• Fluctuating BTU values can cause havoc with industrial processes.
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Example Historic BTU Values
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Marcellus and Utica Shales
Infrastructure Challenges
• Widespread Geographic Footprint Sets Requirement for Large Level
of New Infrastructure
– High Initial Well Flow Rates
– New Production in Areas that Don’t Have History of Wet Gas Production
• Gathering/Processing/Fractionation Facility Requirements
– Interstate Pipeline Facilities
• Where does Utica Gas go?
– Treatment Facilities
• New Natural Gas Processing Capability for Marcellus and Utica Exceeds 3.5
Bcf/d
• LPG Markets – Pipelines: Sarnia, Ontario; Gulf Coast; Philadelphia => Export
– Ethane Cracker
– Diluent
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QUESTIONS?
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Marcellus and Utica Shales