Kinder Morgan on Tennessee Gas Pipeline Dec. 3, 2012
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Transcript of Kinder Morgan on Tennessee Gas Pipeline Dec. 3, 2012
Northeast Gas Association
Pre-Winter Briefing 2012 / 2013
Tennessee Gas Pipeline Co. L.L.C.
1
Dodson Skipworth
Account Director, Northeast
December 3, 2012
Tennessee Gas Pipeline Tennessee Gas Pipeline
Forward-Looking Statements / Non-GAAP Financial
Measures
• This presentation contains forward-looking statements. These forward-looking statements are identified as any
statement that does not relate strictly to historical or current facts. In particular, statements, express or implied,
concerning future actions, conditions or events, future operating results or the ability to generate revenues, income
or cash flow or to make distributions or pay dividends are forward-looking statements. Forward-looking
statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future
actions, conditions or events and future results of operations of Kinder Morgan Energy Partners, L.P., Kinder
Morgan Management, LLC, El Paso Pipeline Partners, L.P., and Kinder Morgan, Inc. may differ materially from
those expressed in these forward-looking statements. Many of the factors that will determine these results are
beyond Kinder Morgan's ability to control or predict. These statements are necessarily based upon various
assumptions involving judgments with respect to the future, including, among others, the ability to achieve
synergies and revenue growth; national, international, regional and local economic, competitive and regulatory
conditions and developments; technological developments; capital and credit markets conditions; inflation rates;
interest rates; the political and economic stability of oil producing nations; energy markets; weather conditions;
environmental conditions; business and regulatory or legal decisions; the pace of deregulation of retail natural gas
and electricity and certain agricultural products; the timing and success of business development efforts; terrorism;
and other uncertainties. There is no assurance that any of the actions, events or results of the forward-looking
statements will occur, or if any of them do, what impact they will have on our results of operations or financial
condition. Because of these uncertainties, you are cautioned not to put undue reliance on any forward-looking
statement.
• We use non-generally accepted accounting principles (“non-GAAP”) financial measures in this presentation, and
our reconciliations of non-GAAP financial measures to our GAAP financial statements are on our website, at
www.kindermorgan.com. These non-GAAP measures should not be considered an alternative to GAAP financial
measures.
2
Tennessee Gas Pipeline Tennessee Gas Pipeline
Agenda
3
• TGP Dynamics, Recent Trends
• Key points Winter 2012/2013
• Power Generation Market Awareness
• TGP Market Development Activities
Tennessee Gas Pipeline Tennessee Gas Pipeline
Marcellus Shale Gas
Production
• 13,800 Miles of Pipeline
• ~1,400,000 HP Compression
• 90 Bcf Storage capacity
• 12 Bcf Linepack capacity
• Connected to all major shale sources
o Northeast: Marcellus, Utica
o All major Eastern markets
Utica Shale Gas
Production
LNG
Export
Canada
Southeast
New
England
EagleFord Shale Gas
Production
Haynesville Shale Gas
Production
Mexico
Tennessee Gas Pipeline (TGP)
4
Tennessee Gas Pipeline Tennessee Gas Pipeline
Northeast Market Area: Source/Flow
Not to scale
Marcellus
Supply
REX, GoM,
TX , Utica
Eastern
Canada
LNG
• Marcellus production dominates
• Ontario exports
• LNG imports declining
Tennessee Gas Pipeline Tennessee Gas Pipeline
Demand Growth: Increased Throughput on TGP
TGP Throughput
2012 thru August ~7.23 Bcf/d
Delivered 99.2% of all firm in-path gas daily
18% over 2011
Power generation drives load growth 6
0 200,000 400,000 600,000 800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
2,200,000
2,400,000
2,600,000
2,800,000
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
Winter Period (November – March) Average Dth/d
Market Area Supply Analysis
Station 219
Niagara (TGP) Shelton Wright Dracut Distrigas Stagecoach Marcellus REX
Tennessee Gas Pipeline Tennessee Gas Pipeline
Tennessee Gas Pipeline – Marcellus Receipts
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
Jan-0
9
Feb-0
9
Mar-
09
Apr-
09
May-0
9
Jun-0
9
Jul-09
Aug-0
9
Se
p-0
9
Oct-
09
Nov-0
9
Dec-0
9
Jan-1
0
Feb-1
0
Mar-
10
Apr-
10
May-1
0
Jun-1
0
Jul-10
Aug-1
0
Sep-1
0
Oct-
10
Nov-1
0
Dec-1
0
Jan-1
1
Feb-1
1
Mar-
11
Apr-
11
May-1
1
Jun-1
1
Jul-11
Aug-1
1
Sep-1
1
Oct-
11
Nov-1
1
Dec-1
1
Jan-1
2
Feb-1
2
Mar-
12
Apr-
12
May-1
2
Jun-1
2
Jul-12
Aug-1
2
Sep-1
2
Oct-
12
Nov-1
2
Marcellus Avg Day Flows (Dth)
Thru November 2012
8
Tennessee Gas Pipeline Tennessee Gas Pipeline
Winter 2012 / 2013
• TGP sees very high loads throughout winter season in Northeast markets
•Recent expansions in service, flowing
•Gas price advantages
•Limited economic recovery
•Compression horsepower utilization high
• Interruptible services of various types and levels are, and will be, interrupted
•Primary Firm in-path reliability not to be jeopardized
• TGP will closely monitor imbalances continuously
•Aggressive linepack management employed
• Shippers’ gas in storage in good shape
• Planned operational maintenance schedules managed, complete
•Compression horsepower utilization high
•Significant scheduled maintenance over Summer, Fall periods
•Hurricanes Isaac & Sandy damage minor. Industry communication / coordination excellent
• TGP posts all necessary information daily: communication critical
Tennessee Gas Pipeline Tennessee Gas Pipeline
Restrictions of Various interruptible Services: Summer Period Northeast
10
Locations April – October: % Days
Description 2010 2011 2012
Comp. Station #245 W. Winfield NY flowing
all points east 22% 79% 94%
Comp. Station #315 Wellsboro, PA flowing
west, south 0% 99% 100%
Comp. Station 321/
325
Eastern PA/NJ headed
east to NJ,NYC 12% 73% 0%
Valve Location 355 Suffield, CT to NE
markets 6% 81% 74%
Tennessee Gas Pipeline Tennessee Gas Pipeline
Locations Percent Days Restricted (Nov – Mar)
Description 2009/2010 2010/2011 2011/2012
Comp. Station #224 Clymer, NY flowing
north NY upstate, NE 0% 28% 30%
Comp. Station #245 W. Winfield NY
flowing all points east 42% 96% 99%
Comp. Station #315 Wellsboro, PA flowing
west, south 0% 25% 91%
Comp. Station #321
Eastern PA flowing
east 38% 48% 9%
Comp. Station #325 NW NJ east to
NJ,NYC, SW CT 0% 87% 7%
Valve Location 355 Suffield, CT to NE
markets 0% 28% 30%
Restrictions of Various interruptible Services: Winter Period Northeast
* Dramatic reduction in restrictions post 300 Line Expansion placed in service Nov, 2011
Tennessee Gas Pipeline Tennessee Gas Pipeline
Northeast Generation Direct Tennessee
12
Tennessee Gas Pipeline Tennessee Gas Pipeline
TGP Power Generation Volumes Northeast
13
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Burn
Plant MDQ
Total Potential Burn: 385,000 Dth/d
Total Plant Firm: 85,000 Dth/d
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
09/10 10/11 11/12
Winter
0
100,000
200,000
300,000
400,000
500,000
600,000
09 10 11
Summer
NYISO Market Plants
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
Burn Plant MDQ
Total Potential Burn: 707,000 Dth/d
Total Plant Firm: 175,000 Dth/d
ISONE Market Plants
Tennessee Gas Pipeline Tennessee Gas Pipeline
Pipeline % of
Total
YTD 2012
(MDth/d)
TGP 43% 2,360
Transco 18% 982
Stagecoach 8% 413
TETCO 7% 401
Dominion 6% 352
Columbia Gas 6% 333
Equitrans 4% 224
National Fuel 3% 168
Millennium 2% 129
National Fuel Prod 2% 109
TOTAL 100% 5,470
Marcellus Receipts by Pipeline
Source: Bentek
TGP Advantage: Unmatched Access to Marcellus
MARCELLUS
UTICA
TGP Marcellus Access
Marcellus Shale
8.9 Bcf/d – Receipt access
38 Producer Interconnections
2.3 Bcf/d – Avg. Daily Receipts (Aug)
~1.0 Bcf/d receipt access added in 2012
Indicative of continued growth
14
Tennessee Gas Pipeline Tennessee Gas Pipeline
TGP – Recent Northeast Development
Project Capacity
(MDth/d) Shippers In-Service Status
300L Project 350,000 EQT Energy Nov 1, 2011 In Service
NSD 250,000 Cabot, Seneca, Anadarko,
Mitsui
Nov 1, 2012 In Service
Northampton 10,400 Berkshire, Bay State Nov 1, 2012 In Service
MPP Project 240,000 Chesapeake, Southwestern Nov 1, 2013 FERC Order received , On Schedule
NE Upgrade 636,000 Chesapeake, Statoil Nov 1, 2013 FERC Order received , On Schedule
Rose Lake 230,000 South Jersey Res., Statoil Nov. 1. 2014 FERC Filing pending, On Schedule
Northeast
Expansion
Up to 1.2 Bcf In Active Development TBD 2016 - 2018 In Active Development
• ~ $1.3Billion Capital
• Fully Subscribed
• In Service, On Time
• Development Continues
Tennessee Gas Pipeline Tennessee Gas Pipeline
TGP Northeast Expansion – Bullet Line
Project Scope 1.2 Bcf/d pipeline
Wright or upstream to:
Dracut MA and;
Backhaul existing markets
3rd pipeline into region
• Benefits all existing markets
• Enhances existing system
• Development of new markets
High pressure line
Expandable
In service 2017-2018
16
Wright
Tennessee Gas Pipeline Tennessee Gas Pipeline
TGP Northeast Expansion – 200 Line Looping
Project Scope
Lower volume scale
• 0.5 to 1.0 Bcf/d
Current gas infrastructure
located in TGP corridor
Increases deliverability
Flexibility in design
In service 2016-2018
17
Dracut
Wright
Tennessee Gas Pipeline Tennessee Gas Pipeline
Key Commercial Terms
Receipt Point Wright NY, upstream
Delivery Points (1) Power Plants and LDCs on TGP’s 200 line,
(2) Existing pipeline interconnects
Supply Access TGP, Constitution, IGT
Volume 500 – 1,200 MDth/day
Term 15 - 20 years
Rate Structure Negotiated, Fixed Rate
Indicative Rate Discussions underway
In-Service Date November 2016 - 2018
TGP Northeast Expansion
18
Tennessee Gas Pipeline Tennessee Gas Pipeline
Tennessee In The Heart of Utica Shale
19
UTICA
TGP Utica development
ongoing: ~ 2.5 Bcf/d
supply liquidity
Multiple lines thru supply-
rich area
Direct access to liquid
pooling points
Access to growing
markets
Rich gas solutions
underway
Northeast Gas Association
Pre-Winter Briefing 2012 / 2013
Tennessee Gas Pipeline Co. L.L.C.
20
Dodson Skipworth
Account Director, Northeast
December 3, 2012