LDC Gas Forum - Chicago...Sep 11, 2012 · • An exciting opportunity for shippers post 2015!...

Alliance Pipeline L.P. 2012 LDC Gas Forum - Chicago

Keith Palmer Senior Vice President & Chief Financial Officer

Forward looking statements and information

Certain information contained in this [presentation], including use of the words “anticipate”, “expects”, and “expected to”, constitute forward looking statements and information. Although Alliance [Canada or US] believes that these statements are based on information and assumptions which are current, reasonable and complete, these statements are necessarily subject to a variety of risks and uncertainties including, but not limited to, future operating performance, regulation, economic conditions and fundamentals affecting the oil and gas producing and marketing industries. Should one or more of these risks or uncertainties materialize or fail to materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected.

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Presentation Agenda

• A unique, energy transportation pipeline • Our competitive advantage • Throughput / design overview • Our supply & demand story • Current pipeline overview • Alliance Chicago Exchange • Tioga Lateral Project • Alliance’s Recontracting efforts • Upcoming outage


Alliance System Strategically Positioned

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Strong and Stable Ownership

50% Enbridge 50% Veresen

System Capability

• 1.6 Bcfd capacity from WCSB to Chicago • 100 mmcf receipt capacity out of Bakken

• Tioga lateral to add 120 mmcf capacity out of Bakken

• Transporting in excess of 100,000 bpd of NGL’s

• Maximum pipeline efficiency achieved at ~1,150 Btu/cf gas

• Reliability over 99%

A Modern Day Pipeline

• Alliance started out as a Producer Pipeline designed to move “trapped” natural gas and associated gas products from the WCSB to more lucrative markets

• Today, Alliance is focused on transitioning from a single-service, single-toll pipeline to a pipeline offering customers a suite of transportation services and contract tenures to Chicago

• These services will be focused on: Minimizing the requirement of in-field processing infrastructure for Producers

Lowering transportation costs to access markets

Accommodating parties that want receipt, transmission or full path service

Compelling gas-on-gas economics to downstream markets

• Alliance customers can be confident their product is on the move to the market as planned


Alliance is Unique

• Alliance is optimized to ship liquids-rich natural gas with NGL processing facilities in place at the terminus of our line in Chicago

• This advantage brings the producer community to the pipe = a direct economic benefit for shippers/markets

• Driven by industry-leading standards and a rigorous integrity management plan, Alliance consistently delivers exceptional reliability 2011 reliability: 99.9%

• The market receives primary sourced natural gas from producing regions Western Canadian Sedimentary Basin (WCSB)

• Shale plays -> Montney & Duvernay Bakken Shale

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Competitive Advantages

• Hybrid dual purpose pipeline High methane and NGL netbacks

• Fit for Purpose One-third of Canadian production within 25 miles and growing Direct link to Bakken supplies

• Reliable operations Alliance has met its contractual obligations every day since

commencement of operations Low maintenance and integrity costs

• Connection to attractive natural gas and NGL markets Chicago and Dawn (via Vector Pipeline) One of the lowest fuel rates

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2012 LDC Gas Forum - Chicago

Supply – Plentiful and Reliable

• Canadian production within 25 miles of APL has grown 14% since 2001 to nearly 6 Bcf/d while overall WCSB production has declined 15%

• APL forecasts that Canadian production within the 25 mile radius will grow another 35% by 2020 over 2010 levels

• Bakken growth has continued and will supplement Alliance receipt potential

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Midwest Region Demand Growth

• Significant US demand growth will occur as a result of: Relatively low natural gas prices Wood Mackenzie forecasts

• ~ 2 Bcf/d of demand growth in the Midwest over 15 years • Full utilization of WCSB pipes to Chicago

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Ontario Demand Growth

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• Natural gas demand in Ontario is over 1 Tcf annually • Ontario’s appetite for natural gas will continue to grow, particularly in the

electrical generation sector

Alliance Pipeline’s Joliet Delivery Header

NGPL

Nicor

Midwest Gas

People’s

Vector

ANR

Guardian • 36” pipe for 13 miles @ 1207 psi MAOP

• Connectivity to 7 pipes in the Chicago area including the Vector Pipeline providing sought after access to Dawn

• Direct connection to Aux Sable Liquid Products


ACE Hub “Alliance Chicago Exchange”

Alliance ACE Connection Points

ACE Hub Services: • Enhanced Title Transfers

• An administrative, no-charge service that enables gas transported by FT-1 shippers to the ACE Hub to transfer title to others for: delivery, title transfer to another shipper; and or nomination of the gas under a Park and Loan transaction

• Wheeling • Interruptible Wheeling (IW) service

provides transportation between points in the ACE Hub via displacement

• Park and Loan (PAL) • This service provides the ability to park

gas or obtain a loan of gas utilizing the pipelines system’s operationally available line pack capacity

• NICOR • NGPL • Midwestern Gas • Guardian Pipeline

• Vector Pipeline • ANR Pipeline • Peoples Gas Light • AuxSable

Questions? Contact Alliance Customer Service: 1-403-517-6277, Option 4 09/11/2012 2012 LDC Gas Forum - Chicago 12

Tioga Lateral Project Moving Gas and NGLs to the Chicago Market

• Preliminary Capacity 106,500 Mcf/d • Designed to transport gas and NGLs to the Chicago market

and can accommodate future expansion • Reduces expensive upstream processing facilities • Pending FERC approval


Recontracting Efforts

• Alliance is responding to market conditions by contemplating a predictable toll structure (for December 1, 2015) that includes the following elements

• Unique The base toll will not be impacted by volume commitments Offer toll certainty by fixing the vast majority of cost items over a

term Considering the option for market priced sharing mechanism

• Changing/Evolving Offer term differentiated rates Tolls at levels that provide competitive netback and landed cost Receipt & transmission zones to allow for tailored commitments

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Services Offered Offer more flexibility and align with individual shipper needs Shipper to choose zone(s) it wishes to contract Annual long-haul firm, seasonal strips and interruptible service

• Receipt Zones Receipt service designed to provide predictable fixed tolls for up to

10 years to transport gas into a newly anticipated transfer pool

• Transmission Zones Ability to source gas from the transfer pool, Cdn/US Border or

Bakken Two tolling choices may be offered for shippers

1. A substantially fixed toll over term (base toll), or

2. A scaled base toll linked to a market price sharing mechanism

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Next Steps…

• Communication with various interest groups to begin early Q4-2012

• Individual Shipper consultations will also begin in early Q4-2012

• Expect to enter Precedent Agreements and hold a binding Open Season in Q1-2013

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Major Fall Outage In October

• Outage is required due to a regulatory directive by the

National Energy Board of Canada (NEB) Relocation of pipe just upstream of MLBV 3-1.

• Will require a complete shutdown of Canadian receipts on the pipeline The first ever on Alliance

• Timing Outage is scheduled for 96 hours starting 09:00 CCT October 1st.

• Timing was chosen due to lead time required for resources, parts & equipment and the need for NEB approval of the outage plan 09/11/2012 2012 LDC Gas Forum - Chicago 17

Major Fall Outage - Continued

• Impact There will be no flow from Canadian receipts on the system. All receipts and deliveries to the US border must be at zero

flow by 09:00 CCT October 1st

• The Bantry receipt point hydrocarbon dewpoint waiver in North Dakota will be suspended starting Oct 1 09:00 CCT

Questions? Contact Alliance Customer Service: 1-403-517-6277, Option 4


Closing Remarks

• Alliance Pipeline is changing and will offer shippers a suite of transportation services and contract tenures

• Alliance is responding to market conditions by proposing toll certainty and may consider market sharing mechanisms over the selected term

• Connection to attractive natural gas markets • One transporter that can provide the whole package • An exciting opportunity for shippers post 2015!

Thank you


Contacts

Toll Free Number: 1-800-717-9017

www.alliancepipeline.com

Keith Palmer Senior Vice President & Chief Financial Officer Direct: (403) 517-6369 Email: [email protected] Troy Randall Manager, Markets Development Direct: (403) 517-6378 Email: [email protected]

Bob Blattler Manager, Supply Development Direct: (403) 517-6431 Email: [email protected] Cathie Legge Manager, Customer Service Direct: (403) 517-6585 Email: [email protected]


LDC Gas Forum - Chicago...Sep 11, 2012 · • An exciting opportunity for shippers post 2015!...

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Transcript of LDC Gas Forum - Chicago...Sep 11, 2012 · • An exciting opportunity for shippers post 2015!...