Midwest Fractionation Ovreview.pdf

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    Midwest Fractionation Overview Platts NGLs Conference| September 24, 2013

    President & CEO Bill McAdam

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    Outline 1. Basics of Gathering, Processing, Fractionation, Storage

    2. Overview of North American NGL Supply/Demand

    3. What drove building of Midwest fractionation facilities?

    4. What will drive expansion of Midwest fractionation?

    5. Summary

  • Slide 3

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    Natural Gas and NGL Value Chain Natural Gas Production

    Processing & Treating

    Natural Gas Transmissio

    n

    Straddle Plant

    Natural Gas Transmissio

    n

    NGL Fractionation

    NGL Storage

    NGL Product Transportation

    Natural Gas Storage

    Residential/ Commercial/ Industrial

    Power Plants

    Natural Gas Distribution

    Spec NGL Products

    C2+ NGL Mix Transportation

    Refined Products

    Petrochem Industry

    Residential/ Commercial

    C2+ or C3+

    C2+ or C3+

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    Key Drivers to locate/build Facilities 1. Location of Raw Gas Production

    2. Access to salt underground storage

    3. Quality/Quantity of the Raw Gas

    4. Natural Gas specs to transport processed Gas

    5. Proximity to NGL mix takeaway systems

    Truck, Rail, Pipeline

    6. Proximity to NGL spec product customers

    Fractionation primarily built close to end-user demand

    Producers are faced with three primary decisions with regards to how best to handle their Raw (NGL rich) Gas:

    1. Extract NGL Mix in field and transport to Fractionate in selected Market.

    2. Extract NGLs, Fractionate in the field and distribute to local Markets.

    3. Transport NGL rich gas to Market, Extract/Fractionate in this Market.

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    Typical NGL Schematic

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    C2 C3 C4s C5+ Total Supply (mmbpd) Gas Plants 1.2 0.8 0.5 0.4 2.9 Refineries - 0.6 0.1 0.0 0.7 Total Supply 1.2 1.4 0.6 0.4 3.6

    Demand (mmbpd) Chemical feedstock 1.2 0.6 0.2 - 2.0 Heating/Commercial/Indl - 0.7 - - 0.7 Refinery (Gasoline Blending) - - 0.3 0.1 0.4 Heavy Oil Diluent - - - 0.2 0.2 Other, Net Exports - 0.1 0.1 0.1 0.3 Total Demand 1.2 1.4 0.6 0.4 3.6 Source: EIA, NEB, Petral, IHS

    North American NGL Supply/Demand Snapshot: 2012

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    Alliance Pipeline

    Aux Sable

    Rich Gas Shales will be Developed and Add to NGL Supply

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    C2 C3 C4s C5+ Supply Direction Gas Plants UP UP UP UP Refineries - flat- flat- flat- Demand Direction Petrochemical Feedstock UP balance up up? Heating/Commercial/Indl - flat/down - - Refinery (Gasoline Blending) - - down down Heavy Oil Diluent - - up UP Dehydro (PDH/BDH), MTBE - UP ? - Net Exports - UP up -

    Key Trends 1. NGL production up from Gas Plants (oily gas focus in shales) 2. Ethane balanced by increased Petchem feedstock demand 3. Propane balanced by increased exports, PDH 4. Butanes balanced by increased exports, MTBE

    North American NGL Supply/Demand Trends 2013 - 2020

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    Mont Belvieu

    Conway

    Sarnia (2.6 B lbs/Yr)

    Fort Saskatchewan (2.6 B lbs/Yr)

    Chicago

    ENTERPRISE

    ONEOK

    COCHIN

    ENBRIDGE

    ALLIANCE

    PTC Empress

    Salt Storage

    ENTERPRISE

    Cochrane

    AEGS

    North American Ethylene Plants

    Extraction Facilities

    Ethylene Plant

    Joffre (6.0 B lbs/Yr)

    USGC (55 B lbs/Yr)

    Clinton (1.1 B lbs/Yr)

    Morris (1.3 B lbs/Yr)

    Calvert City (0.4 B lbs/yr)

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    North American NGL Infrastructurein transition

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    Key Midwest Areas Conventional (historic):

    Conway area (Conway/Bushton/Hutchinson/Medford)

    Edmonton/Fort Saskatchewan

    Sarnia

    Channahon

    New Areas driven by Shale Plays:

    Bakken (ND) other

    Marcellus/Utica (PA/OH/WV)

    Montney/Duvernay (AB/BC)

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    Conway Area Location of Supply: KS, CO, WY, UT, ND

    Supply Logistics: Primarily gathering pipelines from field extraction plants NGL mix (C2+)

    Local Markets: Refiners

    Regional Markets: a. C2 Crackers in IA, IL

    b. Refiners in IL, IN

    c. Propane markets in WI, IL, IN, MI

    d. EP, NGL product markets in USGC (MB)

    Facilities: no adjacent Extraction Capacity

    515 kbd Fractionation Capacity (+)

    5 kbd Isomerization Capacity

    Storage: ~50 mmbbls

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    Conway Area

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    Edmonton/Fort Saskatchewan Area Location of Supply: AB, BC

    Transport Source: Pipelines NGL mix (C2+, C3+) via Pembina, Plains, Keyera

    Local Markets: Refiners in Edmonton, Petchems in FSK/Joffre,

    Regional Markets: Refiners (SK, MT)

    Propane markets in AB, BC, SK, US upper Midwest

    Heavy oil blending

    Facilities: 275 kbd Fractionation Capacity (+)

    Storage: ~40 mmbbls

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    Edmonton/Fort Saskatchewan Area

    Major Straddle Plants Estimated Capacity (MMcf/d) Cochrane 2,500 Empress 9,700

    Other 1,200 Total 13,400

    Source: ERCB; Various Company Public Reports

    Major Fractionators

    (Fort Saskatchewan) Estimated Capacity (kbd)

    Redwater (C2+) 65 (25/40)

    Dow (C2+) 70 (35/35)

    Keyera (C3+) 35 (C3+ only)

    Plains (C3+) 50 (C3+ only)

    Total 135 C2+, 85 C3/C4+

    McMahon/Younger

    Judy Creek

    Fort SK

    Edmonton

    West Pembina

    Caroline

    Harmattan Cochrane

    Empress

    Waterton

    AEGS

    Alliance

    Cochin

    Pembina

    Enbridge

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    Sarnia Area

    Location of Supply: AB, BC

    Transport Source: Pipeline NGL mix (C3+) via Enbridge

    (note: Cochin is essentially zero)

    Local Markets: Refiners, Petchems in Sarnia

    Regional Markets: a. Refiners in Ontario

    b. Propane markets in ON, PQ, MI, US NE

    Facilities: 150 kbd Fractionation Capacity (flat)

    Storage: ~25 mmbbls

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    Sarnia Area

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    North Dakota: Bakken Area Location of Supply: Bakken Shale Oil/Gas

    Transport Source: Gas Gathering systems from wellhead to field extraction, fractionation and/or conditioning

    Local Markets: seasonal market for propane, some butane

    Regional Markets: a. Rich gas to Chicago via Aux Sable/Alliance

    b. C2 to Empress via Vantage (Hess)

    b. Propane markets via truck or rail

    c. C4/C5+ by rail to Alberta diluent market

    d. NGL mix moved to Conway (pipeline via OneOK)

    Facilities: 45 kbd Fractionation Capacity (+)

    Storage: essentially 0 mmbbls

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    North Dakota: Bakken Area

    Palermo Conditioning Plant Prairi