Wyoming Pipeline Authority October 2008 Sunstone Pipeline LLC.
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Transcript of Wyoming Pipeline Authority October 2008 Sunstone Pipeline LLC.
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Wyoming Pipeline AuthorityOctober 2008
Sunstone Pipeline LLC
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Agenda
1. Sunstone Pipeline Project
2. Route Details
3. Capital Costs
4. Transportation Rates
5. Value To Shippers
6. Project Progress
7. Project Schedule
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1. Sunstone Pipeline
• JV partnership among Williams Gas Pipeline Company, TransCanada
Pipeline and Sempra Pipelines & Storage Corp.
• Provides the lowest cost transportation service to the broadest
market– Pacific Northwest– California– Northern Nevada
• Lower risk than greenfield construction– Existing corridors, existing infrastructure, existing operators– Lower miles– Reasonable, scrubbed cost estimate
• Majority of the capacity subscribed
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2. Sunstone Route
4
OPALOPAL
CHEYENNECHEYENNE
MEEKERMEEKERDenverDenver
MALINMALIN
PowderRiver
PowderRiver
BigHornBig
Horn
WindRiverWindRiver
GreaterGreenRiver
GreaterGreenRiver
UintaUinta
PiceancePiceanceParadoxParadox
SandWashSandWash
Denver/JulesbergDenver/
Julesberg
WCSBWCSB
WillistonWilliston
AnadarkoAnadarko
NITNIT
Northern BorderFoothills
(Sask.)
NG
TL
GTN
Foothills
(B.C.)
Northwest Pipeline
TC Mainline
WAMSUTTERWAMSUTTER
STANFIELDSTANFIELD
Sunstone
RUBYRUBY
PG
&E RENORENO
Paiute
ELYELY
Tu
scarora
• 1.2 Bcf/d of capacity
• 598 miles, 42”
• 57,300 HP, 1440 MAOP
• 0.83% fuel (@ 90% LF)
• Largely parallels existing NWP and utility corridors
Mist
Jackson Prairie
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3. Estimate Reflects Current Cost Trends
• Cost estimates in 2011 “as spent dollars”– Escalating steel prices and
contractor costs factored into the estimate
• Validation of costs & route– Williams recent and extensive
experience in the Rockies (i.e. Kern River Expansion)
– TransCanada engineers independently validated the Sunstone estimate
– Third party review
• Based on November 2011 start date
Engineering, Design & Project Management
15
Line Pipe 746
Other Materials 68
Pipeline Construction 981Other Construction 73Land 49Environmental 29Line Pack and Commissioning 30Compression 201
Total Direct Costs 2,192
AFUDC and A&G 152
Total Project Costs ($millions)
2,344
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4. Proposed Rates
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$0.80
$0.85
Equal to or greater than 10 years but less than 15 years
Fixed Rate Option
10 Year Negotiated Rate
$0.75Equal to or greater than 15 years but less than 20 years
$0.72Equal to or greater than 20 years but less than 25 years
$0.69Equal to or greater than 25 years but less than 30 years
$0.6830 years or greater
Estimated Levelized Recourse Rates
($/Dth/d)
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5. Competitive Option For PNW, Northern California and Northern Nevada Consumers
• Diversification: Replace high dependence on Canadian imports with access to Rockies production
• Reliability: As Canadian Supply declines, supply into western markets becomes the marginal market for Canadian producers
• Transport capacity to the PNW from Rockies currently at maximum utilization
• High efficiency transportation reduces fuel costs
• Access to storage at Jackson Prairie (22 Bcf capacity) and Mist (14 Bcf capacity)
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5. Sunstone Offers Rockies Producers Valuable Market Access
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5. Valuable Access For Rockies Producers
Sunstone features:
• Highest netback out of the Rockies– Lower cost to access Malin
• Of the two-thirds capacity already committed, 376 MMcfd represents long-term subscription from end-users, reducing producer commitment to launch project
• Lowest reservation charge, minimizes risk and financial commitment
• Term differentiated rate options without huge disparity among shippers maintains competitiveness for ALL shippers
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5. Valuable Access For Rockies Producers (continued)
Sunstone provides access to multiple markets and end-use meters:
• From Stanfield through interconnects with Northwest Pipeline and GTN
• Increase in electric generation loads fueling market growth– Electric generation loads counter-seasonal to California generation loads
• Downstream expansions proposed to serve PNW market growth
• No expansion required on GTN to serve Northern California and Northern Nevada– Currently 329 MDth/d available– GTN motivated to retain and expand customer base
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Sunstone Provides Access To Target Markets
• Sunstone provides
access to the broadest
market – 3.3 Bcfd currently flows into
PNW area from the Rockies and Canada
– Of which, 1.4 Bcfd flows into Northern CA and Northern NV via Malin
• 0.8 Bcfd expected
growth in PNW and CA
for 2008-2018 (Wood
Mackenzie)
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Source: Lippman Consulting, average deliveries, January, 2007 – May, 2008
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Existing & Proposed PNW Gas-Fired Generation
12
• 3.5 Gw of existing facilities served by NW Pipeline
• 2.9 Gw of existing facilities directly connected to GTN
• 3.2 Gw of new gas generation proposed
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Major End-Use Markets Served by Northwest Pipeline & GTN
Northwest Pipeline
• Washington• Puget Sound Energy• Cascade Natural Gas• Avista Corp• PacificCorp (Chehalis
Power)
• Oregon• Northwest Natural• Portland General Electric• Avista Corp• Cascade Natural Gas
• Idaho• Intermountain Gas• Idaho Power
• Nevada• Southwest Gas• Sierra Pacific
GTN
• Washington• Avista Corp• Cascade Natural Gas
• Oregon• Avista Corp• PPM (Klamath Falls)• Cascade Natural Gas• Hermiston Power• Portland General Electric
• Nevada• Sierra Pacific
• California• PG&E• Sacramento Municipal Utility
District• Southern California
Gas/SDG&E• Conoco Phillips
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5. NW Region – Key to a Viable Project
14
Historical Flows - NWP and GTN
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
1/1
/20
05
3/1
/20
05
5/1
/20
05
7/1
/20
05
9/1
/20
05
11
/1/2
00
5
1/1
/20
06
3/1
/20
06
5/1
/20
06
7/1
/20
06
9/1
/20
06
11
/1/2
00
6
1/1
/20
07
3/1
/20
07
5/1
/20
07
7/1
/20
07
9/1
/20
07
11
/1/2
00
7
1/1
/20
08
3/1
/20
08
5/1
/20
08
Sch
ed
ule
d D
eli
ve
rie
s (
MD
th/d
)
Malin NW Region (WA, OR, ID,N.NV)
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6. Project Progress On Track
• Route is essentially fixed, with formal approval process for
small reroutes
• Survey progress:– Wetland surveys complete by year end
– Cultural surveys complete by year end
– Paleontology surveys complete by year end
– Survey permission received from 82% of landowners
• Meetings with regulatory agencies continue to go well– Successful FERC pre-filing meeting on October 7
– Formal request for pre-filing scheduled for October 21
• Seven open houses scheduled for mid-November
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7. Schedule
• Conducted Open Season: March 17 – May 30, 2008
• Perform Biological and Cultural Surveys: Summer/Fall 2008
• NEPA Pre-Filing Request with FERC: October 2008
• Place Pipe and Materials Order: No later than May 2009
• FERC filing: Q2 2009
• FERC Certificate: Q2 2010
• Construction Start: Summer 2010
• In-Service Date: November 1, 2011
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These Economic Times…
• Three financially sound partners able to execute on
construction of a large pipeline project
• The silver lining:– Economic slowdown means pipe and construction costs may
drop before partners need to commit to these costs– For every drop of $100 per ton of steel, project saves $40
million
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Sunstone Mantras
• Existing corridor
• Fewer miles
• Realistic cost
• Market diversity and size
• Lowest cost transportation
18