general manager interstate marketing department · general manager interstate marketing department...

National Fuel Gas Supply Corporation

Jeffrey R. SchaugerGeneral Manager

Interstate Marketing Department

Safe Harbor for Safe Harbor for Safe Harbor for Safe Harbor for Forward Looking StatementsForward Looking StatementsForward Looking StatementsForward Looking Statements

This presentation may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995, including statementsregarding future prospects, plans, performance and capital structure, anticipated capital expenditures and completion of construction projects, as well asstatements that are identified by the use of the words anticipates, estimates, expects, forecasts, intends, plans, predicts, projects,believes, seeks, will, may, and similar expressions. Forward-looking statements involve risks and uncertainties, which could cause actual resultsor outcomes to differ materially from those expressed in the forward-looking statements. The Companys expectations, beliefs and projections containedherein are expressed in good faith and are believed to have a reasonable basis, but there can be no assurance that such expectations, beliefs orprojections will result or be achieved or accomplished.

In addition to other factors, the following are important factors that could cause actual results to differ materially from results referred to in the forward-looking statements: changes in economic conditions, including economic disruptions caused by terrorist activities, acts of war or major accidents, anddownturns in economic activity including national or regional recessions; changes in demographic patterns and weather conditions, including theoccurrence of severe weather such as hurricanes; changes in the availability and/or price of natural gas or oil and the effect of such changes on theaccounting treatment of derivative financial instruments or the valuation of the Companys natural gas and oil reserves; uncertainty of oil and gas reserveestimates; ability to successfully identify, drill for and produce economically viable natural gas and oil reserves, including shortages, delays orunavailability of equipment and services required in drilling operations; significant changes from expectations in the Companys actual production levelsunavailability of equipment and services required in drilling operations; significant changes from expectations in the Companys actual production levelsfor natural gas or oil; changes in the availability and/or price of derivative financial instruments; changes in the price differentials between various typesof oil; inability to obtain new customers or retain existing ones; significant changes in competitive factors affecting the Company; changes in laws andregulations to which the Company is subject, including changes in tax, environmental, safety and employment laws and regulations;governmental/regulatory actions, initiatives and proceedings, including those involving acquisitions, financings, rate cases (which address, among otherthings, allowed rates of return, rate design and retained gas), affiliate relationships, industry structure, franchise renewal, and environmental/safetyrequirements; unanticipated impacts of restructuring initiatives in the natural gas and electric industries; significant changes from expectations in actualcapital expenditures and operating expenses and unanticipated project delays or changes in project costs or plans; the nature and projected profitabilityof pending and potential projects and other investments, and the ability to obtain necessary governmental approvals and permits; occurrences affectingthe Companys ability to obtain funds from operations, from borrowings under our credit lines or other credit facilities or from issuances of other short-term notes or debt or equity securities to finance needed capital expenditures and other investments, including any downgrades in the Companys creditratings; ability to successfully identify and finance acquisitions or other investments and ability to operate and integrate existing and any subsequentlyacquired business or properties; impairments under the SECs full cost ceiling test for natural gas and oil reserves; changes in the market price of timberand the impact such changes might have on the types and quantity of timber harvested by the Company; significant changes in tax rates or policies or inrates of inflation or interest; significant changes in the Companys relationship with its employees or contractors and the potential adverse effects if labordisputes, grievances or shortages were to occur; changes in accounting principles or the application of such principles to the Company; the cost andeffects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; changes in actuarialassumptions and the return on assets with respect to the Companys retirement plan and post-retirement benefit plans; increasing health care costs andthe resulting effect on health insurance premiums and on the obligation to provide post-retirement benefits; or increasing costs of insurance, changes incoverage and the ability to obtain insurance.

For a discussion of these risks and other factors that could cause actual results to differ materially from results referred to in the forward-lookingstatements, see Risk Factors in the Companys Form 10-K for the fiscal year ended September 30, 2010 and the Companys Form 10-Q for the quarterended March 31, 2011. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the datehereof or to reflect the occurrence of unanticipated events.

LDC: ~725,000 Customers LDC: ~725,000 Customers LDC: ~725,000 Customers LDC: ~725,000 Customers Served throughout Western Served throughout Western Served throughout Western Served throughout Western NY and Northwestern PANY and Northwestern PANY and Northwestern PANY and Northwestern PA

PL&S: ~3,000 miles of pipe, PL&S: ~3,000 miles of pipe, PL&S: ~3,000 miles of pipe, PL&S: ~3,000 miles of pipe, 60,000+ hp60,000+ hp60,000+ hp60,000+ hp

Own/Operate 27 Fields; Own/Operate 27 Fields; Own/Operate 27 Fields; Own/Operate 27 Fields; CoCoCoCo----Own/Operate 4 FieldsOwn/Operate 4 FieldsOwn/Operate 4 FieldsOwn/Operate 4 Fields

Storage Capacity ~78 Storage Capacity ~78 Storage Capacity ~78 Storage Capacity ~78 bcfbcfbcfbcf

Niagara

CANADACANADA

Lake OntarioLake OntarioLake Ontario

Lake

Erie

LakeLake

ErieErie

Ellisburg

NYNY

PAPA

Chippawa

CorningIndependence

Millennium

Tuscarora

Storage

TCPL

Niagara, Chippawa

Empire PipelineN

ati

on

al

Fue

l G

as

Pip

eli

ne

& S

tora

ge

Sy

ste

m

Empire Connector

Corning

Empire, Millennium

Ellisburg

PA

PA

OH

OH

Leidy: DTI,

Transco, TETCO

National Fuel Gas

NFGSC System Storages

NFGSC System Pipelines

Empire Pipeline

Interconnects

Leidy

Na

tio

na

l Fu

el

Ga

s P

ipe

lin

e &

Sto

rag

e S

yst

em

Ellisburg Interconnects:

TGP, DTI

Bristoria

TETCO M2

PL & S FootprintPL & S FootprintPL & S FootprintPL & S Footprint Unlocks OpportunityUnlocks OpportunityUnlocks OpportunityUnlocks Opportunity

NFGSC NFGSC NFGSC NFGSC System Increased System Increased System Increased System Increased Producer ActivityProducer ActivityProducer ActivityProducer Activity

104

161

100

120

140

160

180

IC Requests

55% increase in IC requests from 2009 to 2010

1 2 311 31

79

104

0

20

40

60

80

100

2003 2004 2005 2006 2007 2008 2009 2010

Positioned to Move Growing Marcellus ProductionPositioned to Move Growing Marcellus ProductionPositioned to Move Growing Marcellus ProductionPositioned to Move Growing Marcellus Production

6

8

10

12

Pro

du

cers

Flo

win

g M

arc

ell

us

Pro

du

ctio

n

Marcellus Producers Transporting Gas on National Fuels System

9

Marcellus Producers Increase Marcellus Producers Increase Marcellus Producers Increase Marcellus Producers Increase Utilization of NFGSCUtilization of NFGSCUtilization of NFGSCUtilization of NFGSC

0

2

4

6

Pro

du

cers

Flo

win

g M

arc

ell

us

Pro

du

ctio

n

2

3.00

4.00

5.00

Lo

cal P

rod

uct

ion

into

NF

GS

C (

Bcf

per

Mo

nth

)

Marcellus

Upper Devonian

Evolving OnEvolving OnEvolving OnEvolving On----System Production MixSystem Production MixSystem Production MixSystem Production Mix

0.00

1.00

2.00

Lo

cal P

rod

uct

ion

into

NF

GS

C (

Local Production Receipts in NFGSC Appalachian Zones 1 & 2

120,000.00

140,000.00

160,000.00

60,000.00

80,000.00

100,000.00

Jan

-07

Mar

-07

May

-07

Jul-

07

Sep

-07

No

v-07

Jan

-08

Mar

-08

May

-08

Jul-

08

Sep

-08

No

v-08

Jan

-09

Mar

-09

May

-09

Jul-

09

Sep

-09

No

v-09

Jan

-10

Mar

-10

May

-10

Jul-

10

Sep

-10

No

v-10

Jan

-11

Mar

-11

May

-11

Jul-

11

Avg. dth per day 12 Month Rolling Avg. (dth)

Niagara Volume (Receipts & Displacement)

250,000.00

300,000.00

350,000.00

400,000.00

450,000.00

Avg. dth/d

-

50,000.00

100,000.00

150,000.00

200,000.00

Jan

-07

Mar

-07

May

-07

Jul-

07

Sep

-07

No

v-07

Jan

-08

Mar

-08

May

-08

Jul-

08

Sep

-08

No

v-08

Jan

-09

Mar

-09

May

-09

Jul-

09

Sep

-09

No

v-09

Jan

-10

Mar

-10

May

-10

Jul-

10

Sep

-10

No

v-10

Jan

-11

Mar

-11

May

-11

Jul-

11

12 Month Rolling Average (dth/d)

Increased Receipts from TGP 300 Line

150,000.00

200,000.00

250,000.00

Rose Lake Receipts/Deliveries

(100,000.00)

(50,000.00)

-

50,000.00

100,000.00

May

-06

Jul-

06

Sep

-06

No

v-06

Jan

-07

Mar

-07

May

-07

Jul-

07

Sep

-07

No

v-07

Jan

-08

Mar

-08

May

-08

Jul-

08

Sep

-08

No

v-08

Jan

-09

Mar

-09

May

-09

Jul-

09

Sep

-09

No

v-09

Jan

-10

Mar

-10

May

-10

Jul-

10

Sep

-10

No

v-10

Jan

-11

Mar

-11

May

-11

Jul-

11

DT

H/D

PrePrePrePre----MarcellusMarcellusMarcellusMarcellus

LEIDYLEIDYLEIDYLEIDY

New YorkNew YorkNew YorkNew York

NIAGARANIAGARANIAGARANIAGARA

ONTARIOONTARIOONTARIOONTARIO

PennsylvaniaPennsylvaniaPennsylvaniaPennsylvania

PostPostPostPost----MarcellusMarcellusMarcellusMarcellus


New YorkNew YorkNew YorkNew York

NIAGARANIAGARANIAGARANIAGARA

ONTARIOONTARIOONTARIOONTARIO


PennsylvaniaPennsylvaniaPennsylvaniaPennsylvania

PIPELINE & STORAGE

EXPANSION INITIATIVES

PIPELINE & STORAGE


LINE N

EXPANSION

NFGSC NFGSC NFGSC NFGSC ---- Line N 2011 Expansion

New 4,740 Hp Compressor Station in Washington County

2 Miles of 20 Line N Replacement north of I-70 (plus 17 mile replacement)(plus 17 mile replacement)

Capacity:160,000 Dth/d

Delivery Point of TETCO at Ryerson (Holbrook)

ISD: Late September 2011 Capex ~ $20 million

PIPELINE & STORAGE


LINE N 2012

EXPANSION

NFGSC NFGSC NFGSC NFGSC ---- Line N 2012 Expansion

20,620 Hp expansion at Buffalo Station

4.85 Miles of 24 Line N Replacement

Capacity of 150,000 Dth/d; Capacity of 150,000 Dth/d; subscribed and moving forward

7(c) Filed June 2011

ISD : November 2012 Capex ~ $39 million

PIPELINE & STORAGE


NORTHERN ACCESS

EXPANSION

Compression at Ellisburg and East Aurora (~14,210 Hp)

Modification to Lockport & Concord Compressor Stations and Niagara Measurement

C

NFGSC NFGSC NFGSC NFGSC ---- Northern Access Expansion

and Niagara Measurement

Capacity: 320,000 Dth/d; subscribed by Statoil

Filed 7(c) March 2011

ISD: November 2012 Capex ~ $62 million

C

Northern Access Expansion

PIPELINE & STORAGE


MERCER

COMPRESSIONCapacity 320,000 Dth/d

Facilities9,470 Hp Ellisburg

4,740 Hp East Aurora

Modifications @ Concord and Lockport

Cost $61.5 MM

Anticipated Revenue $13.6 MM

Market (Dth/d) PA Statoil 320,000, 20 yrs

FERC Filing March 2011

Anticipated In-Service November 2012

COMPRESSION

Local Production Receipts in NFGSC Appalachian Zones 1 & 2

120,000.00

140,000.00

160,000.00

60,000.00

80,000.00

100,000.00

Jan

-07

Mar

-07

May

-07

Jul-

07

Sep

-07

No

v-07

Jan

-08

Mar

-08

May

-08

Jul-

08

Sep

-08

No

v-08

Jan

-09

Mar

-09

May

-09

Jul-

09

Sep

-09

No

v-09

Jan

-10

Mar

-10

May

-10

Jul-

10

Sep

-10

No

v-10

Jan

-11

Mar

-11

May

-11

Jul-

11

Avg. dth per day 12 Month Rolling Avg. (dth)


PIPELINE & STORAGE


Capacity 320,000 Dth/d

Facilities9,470 Hp Ellisburg

4,740 Hp East Aurora

Modifications @ Concord and Lockport

Cost $61.5 MM

Anticipated Revenue $13.6 MM

Market (Dth/d) PA Statoil 320,000, 20 yrs

FERC Filing March 2011

Anticipated In-Service November 2012

WEST TO EAST

W2E Unlocking Acreage in Key PA Counties

National Fuel Gas Supply Corporation National Fuel Gas Supply Corporation National Fuel Gas Supply Corporation National Fuel Gas Supply Corporation

West to East Expansion Highlights

82 miles of 24, portions paralleling existing line FM-100

25,000 Hp at two new compressor stations

Capacity: 425,000+ Dth/d;

NEPA Pre-Filing Process commenced March 2010

7c Filing expected late 2012/early 2013

Engineering and environmental studies well underway

Expected in-service late 2013/2014 with a cost of $290MM

Project NameCapacity (Dth/D)

Est.CapEx

In-Service

DateMarket Status

Lamont Compressor Station

40,000 $6 MM 6/15/10Fully

SubscribedCompleted Flowing into TGP 300 Line

Lamont Phase II Project 50,000 $7.6 MM 07/1/11Fully

Subscribed

First 10,000 Dth/d in-service. Remaining 40,000 Dth/d in-service 10/2011.

Line N Expansion 160,000 $20 MM ~ 09/2011Fully

SubscribedConstruction began February 2011

Tioga County Extension 350,000 $49 MM ~ 11/2011Fully

Construction began July 2011

Expansion Initiatives

Tioga County Extension 350,000 $49 MM ~ 11/2011Subscribed

Construction began July 2011


320,000 $62 MM ~11/2012Fully

SubscribedCertificate filed in March 2011

Line N 2012 Expansion 150,000 $36 MM ~ 11/2012Fully

SubscribedCertificate filed in July 2011

West to East ~425,000 $290 MM 201429%

SubscribedMarketing continues with producers invarious stages of exploratory drilling

Central Tioga County Extension

260,000 $135 MM 2014Open

Season Closed

Evaluating market interest and facility design

Total Firm Capacity ~ 1,755,000 Dth/D

Capital Investment ~ $606 MM

Marcellus Driven Expansion Projects

Lamont Phase II Project (July 2011)

Line N Expansion (October 2011)

Tioga County Extension (November 2011)

Line N 2012 Expansion (November 2012)

50,000 Dth/d

160,000 Dth/d

350,000 Dth/d

150,000 Dth/d

Northern Access Expansion (November 2012)

West to East (2014)

Central Tioga County Ext (2014)

FY11 FY12 FY14FY13

Total Firm Capacity: ~1,715,000 Dth/DCapital Investment: ~$600 Million

320,000 Dth/d

~425,000 Dth/d

260,000 Dth/d

1,000,000

1,200,000

1,400,000

1,600,000

MC

FD

West to East

Central Tioga County Extension

Estimated Marcellus Volumes from System Expansions (80% Load Factor)

Actual Transported Marcellus Production Volumes

Marcellus Volumes from System ExpansionsMarcellus Volumes from System Expansions

0

200,000

400,000

600,000

800,000

MC

FD

Line N 2012 Expansion &

Northern Access

Tioga County

Line N 2011

Thank you

Todays presentations will be posted on Todays presentations will be posted on Todays presentations will be posted on Todays presentations will be posted on the NFGSC website under Marketing the NFGSC website under Marketing the NFGSC website under Marketing the NFGSC website under Marketing

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general manager interstate marketing department · general manager interstate marketing department...

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