Gas/Electric Partnership

Transcription

1 INTERSTATE PIPELINES EXPLORATION & PRODUCTION Gas/Electric Partnership Marcellus Shale Gas Impact on Pipelines Anders Johnson Director Gas Control and Facility Planning February 10 th 2011 Tennessee Gas Pipeline Company

2 Cautionary Statement Regarding Forward-looking Statements This presentation includes forward-looking statements and projections, made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of The company has made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this presentation, including, without limitation, the successful implementation of the 2003 operational and financial plan; the successful implementation of the settlement related to the western energy crisis; actions by the credit rating agencies; the successful close of financing transactions; our ability to successfully exit the energy trading business; our ability to divest of certain non-core assets; changes in commodity prices for oil, natural gas, and power; general economic and weather conditions in geographic regions or markets served by El Paso Corporation and its affiliates, or where operations of the company and its affiliates are located; the uncertainties associated with governmental regulation; the uncertainties associated with the outcome of governmental investigations; political and currency risks associated with international operations of the company and its affiliates; inability to realize anticipated synergies and cost savings associated with restructurings and divestitures on a timely basis; difficulty in integration of the operations of previously acquired companies, competition, and other factors described in the company's (and its affiliates') Securities and Exchange Commission filings. While the company makes these statements and projections in good faith, neither the company nor its management can guarantee that anticipated future results will be achieved. Reference must be made to those filings for additional important factors that may affect actual results. The company assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by the company, whether as a result of new information, future events, or otherwise.

3 Agenda Brief Overview of TGP Pipeline Marcellus Shale Gas Impacts Considerations for future Shale Gas Development 3

4 Marcellus Shale Gas and Tennessee Gas Pipeline 200 Line 300 Line 500 Line 100 Line 4

5 Marcellus Shale Gas Abundant Marcellus Supply Alters Operations 100% of TGP s 300 Line forward haul met by Marcellus, up to 720 MMcf/d TGP s 300 Line reverses flow, up to 500 MMcf/d Spurs several new pipeline projects Marcellus gas flows north offsetting Canadian declines Reduced daily storage demand Reduced traditional supply demand Took the market by surprise 5

6 Marcellus Shale Gas 2011 Marcellus 1.2 Bcf/d Not to scale 6

7 Daily Marcellus Production tied to the 300 Line Downstream of Storage Jan

8 Marcellus Shale Gas Abundant Marcellus Supply Alters Operations 100% of TGP s 300 Line forward haul met by Marcellus, up to 720 MMcf/d TGP s 300 Line reverses flow, up to 500 MMcf/d Spurs several new pipeline projects Marcellus gas flows north offsetting Canadian declines Reduced daily storage demand Reduced traditional supply demand Took the market by surprise 8

9 300 Line Project PROJECT SCOPE: CAPACITY: ~350 mmscf/d 127 miles of 30 loops IN SVC DATE: November 1, ,000 Hp addtl, 34,000 Hp replaced 9

10 Marcellus Shale Gas Abundant Marcellus Supply Alters Operations 100% of TGP s 300 Line forward haul met by Marcellus, up to 720 MMcf/d TGP s 300 Line reverses flow, up to 500 MMcf/d Marcellus Gas flows north offsetting Canadian declines Reduced daily storage demand Reduced traditional supply demand 10

11 TGP Total Storage Volume Trend & HDDs 62 2,700 Storage in Bcf ,650 2,600 2,550 2,500 2,450 2,400 2,350 Heating Degree Days ,300 Storage Inventory (Jan 31) Avg Boston/NYC HDD (Nov Jan) inventory includes Northern, Lost Creek, Bear Creek 11

12 Marcellus Shale Gas Abundant Marcellus Supply Alters Operations 100% of TGP s 300 Line forward haul met by Marcellus, up to 720 MMcf/d TGP s 300 Line reverses flow, up to 500 MMcf/d Marcellus Gas flows north offsetting Canadian declines Reduced daily storage demand Reduced traditional supply demand 12

13 TGP South System 100 Line Impact 100 Line Not to scale 13

14 100 Line Monthly Average Throughput 1,400, ,200,000 1,000, ,000 Dth 600, , , Month 14

15 Marcellus Shale Gas 2013 and beyond 15

16 Shale Gas Proliferation New supplies altered flow and storage patterns New pipelines may be needed to deliver shale gas to emerging markets Coordination will lower future costs and improve project economics Call your pipelines! 16

17 Thank you Questions? TGP Gas Control and Facility Planning Anders Johnson TGP Business Development Preston Troutman El Paso Midstream Russell Mahan 17