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Terasen Pipelines

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One emerging business: ... Expressions of Interest: very strong support to continue development ... Between 750 to 948 million will be spent during construction ... – PowerPoint PPT presentation

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Title: Terasen Pipelines


1
Terasen Pipelines Mike Horner Vice President,
Engineering Major Projects
2
Oil Sands Supply Infrastructure
  • BC Oil Gas Opportunities Summit
  • March 1, 2005

3
Terasen- Who We Are
  • A company engaged in the transportation of energy
    and the provision of related utility management
    services
  • Two core businesses
  • Natural Gas Distribution
  • Petroleum Transportation
  • One emerging business
  • Additional growth potential from emerging
    waterworks and utility services businesses

4
Commitment To The West
  • 850,000 natural gas customers
  • Delivers 60 of energy consumed in BC
  • Third largest gas utility in Canada
  • Third largest pipeline company in Canada
  • 5,000 kilometers of pipe
  • 20 of total crude oil refined products ex.
    Alberta
  • Significant provider of waterworks in BC, Alberta
    and Western US
  • 1.9 billion in annual revenues
  • 5 billion in assets

5
Corporate Overview
  • Over 50 years experience
  • 4544 km/928,000 bpd
  • Over 50 years experience
  • 850,000 customers
  • 2150 employees
  • 99 Canadian owned
  • Asset base - 4,915 million
  • Infrastructure products worth 100 million
  • Western Canada
  • Waterworks and specialty utility services

6
Focused
  • Western Canadian base

CANADA
  • Continental opportunities

USA
7
Crude Oil Supply and Markets
  • To understand B.C.s opportunity, must understand
    the whole picture
  • Supply from Alberta will increase
  • New markets are required
  • Traditional markets are full
  • Need to maximize value for production
  • New pipeline capacity is needed
  • Where to? How much? When?

8
Western Canadian Crude Supply
Syn-Bit Heavy Blend
Dil-Bit Heavy Blend
Synthetic
Conventional Heavy
Conventional Light Med.
Source CAPP July 2004
  • Net production increase of 1.1 million bpd over
    next 10 years
  • Primary growth in synthetics and synthetic-heavy
    blends

9
Key Markets Current Future
10
PADD IV
2003
000 bpd
  • Production Declines 4/year
  • Canadian Imports to 360,000 bpd by 2010

11
Lower PADD II
2003
000 bpd
  • Mid-Continent production declining at 3 -
    4/year
  • Canadian must compete against rising GC
    production

12
B.C. Washington State
2003
000 bpd
  • ANS decline 1, increasing to 3
  • Were already pipeline connected!
  • Canadian imports to Washington State could
    double

13
California
2003
000 bpd
  • Domestic declines 3 per year mainly heavy
  • Imports to increase by 460,000 bpd by 2015
  • Canadian must compete with South American and
    other heavies

14
Far East
2003
000 bpd
  • Led by China, fastest growing market in the
    world
  • Chinas crude imports to increase 1.5 mmbpd by
    2015
  • Both China and Japan desire to reduce dependence
    on Middle East supply but at competitive
    pricing
  • Canadian must compete with growing Russian
    supply

15
Key Expansion Initiatives
  • In response to demand, all Pipelines assets are
    undergoing expansion
  • Alberta Corridor
  • US Express/Platte
  • B.C. Trans Mountain

16
Trans Mountain Facts
  • In operation since 1953
  • Over 1,100 kilometers long
  • 24 diameter with 2-30 loops
  • Originally a crude oil line
  • Now transports crude and refined products
  • The pipeline crosses
  • 400 river and stream crossings
  • 60 major highways, 24 railway lines
  • 1 national 4 provincial parks
  • Properties of over 2,500 landowners
  • Important tax contributor to Province
  • 16 million in 2003

17
Trans Mountain Upgrade
  • Strong West Coast demand resulted in capacity
    apportionment for most of 2003/04
  • Now in service

300 200 100 0
27,000 BPD 18 million
Capacity KBPD
2003
2004
18
TMX Expansion
  • Build from existing base
  • Further 550,000 bpd
  • Staged from 2006 to whenever needed
  • TMx1 plus Southern option C2.2 billion
  • TMx1 plus Northern option C2.5 billion
  • Options to match marketing plans and risk profile
  • Potential for 3 lines
  • 2 Lines to Vancouver for PADD V exports (crude
    and refined products)
  • Line to North Coast for Asian exports

19
Choices for Marine Exports
  • Westridge Marine Terminal - Vancouver
  • 50 years of tankers experience
  • Expansion to fully load Aframax tankers
  • Size fits with California ports
  • Northern Option - New Terminal in Kitimat or
    Prince Rupert
  • VLCC tankers provides lower costs to Asia
  • Higher costs to California
  • Staged approach allows time to make this decision

20
Specific Project Challenges
  • Building and operating pipelines through rugged,
    environmentally sensitive terrain
  • Terasen has 50 yrs of experience
  • Stakeholder Relations
  • Established ROW
  • Relationships with landowners and First Nations
  • Need for Shipper commitments
  • Access to low cost financing
  • Lowest possible toll

21
Project Status
  • Expressions of Interest very strong support to
    continue development
  • Commercial discussions proceeding
  • Open season planned for late Q2, 2005
  • New capacity starting by late 2006

22
Getting a Project Done
  • Customers
  • Attractive markets
  • Competitive tolls
  • Risk sharing and mitigation
  • Stakeholders
  • Early and meaningful information and consultation
  • Viable plans for mitigation and offset
  • Economic benefits
  • Construction
  • Need to be On Time and On Budget
  • Predictable costs deal with issues early
  • Availability of manpower

23
Key Contributions to BC
  • Demonstrated operational excellence
  • Communities
  • Environment
  • Clients
  • Important tax contributor to Province
  • 16 million in 2003
  • Committed to expansion in BC
  • Growth from Core Competencies
  • Connecting increasing supply with increasing
    demand
  • Technical innovation in BC
  • Knowledge of dynamics of key markets
  • Financial strength and innovation
  • Proven track record for project completion in BC

24
BC Benefits
  • Between 750 to 948 million will be spent during
    construction
  • additional spending of 80-100 million on
    regulatory/ engineering matters
  • Additional provincial tax revenues 190 to 225
    million
  • Additional property tax revenues 15 to 25
    million
  • Meets needs of key producers active in BC and
    Alberta
  • Expands capacity and opens up new markets for BC
    and Alberta crude to Washington State California
    and Asia
  • Ultimately a dedicated products line to supply
    local markets
  • Meets BCs needs for transport fuels in the future

25

Thank you.
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