Transcript Kinder Morgan / Sempra – Rockies Express Pipeline

Wyoming Pipeline Authority
Jeff Rawls
Vice President, Business Development
West Region Gas Pipelines
August 30, 2005
2
PACIFIC
COCHIN
2
2
KMIGT
PACIFIC
4
2
2
NORTH
3
CALNEV
2
2
2
PACIFIC
NGPL
KMCO2
KMP
PLANTATION
CO2 Pipelines
KM TEJAS
Terminals
Products Pipelines
Products Pipeline Terminals
KMI
NGPL
KMTP
2
Transmix Facilities
Natural Gas Pipelines
NGPL Storage
Natural Gas Storage
Natural Gas Plants
Natural Gas Storage
(2,3,8) Indicates # of Facilities
8
2
2
2
2
CFPL
Natural Gas Pipelines
Gas-Fired Power Plants
Retail Natural Gas Division
Kinder Morgan Headquarters
Houston, Texas
The Obvious - Issues
Production is Growing in Rockies
12,000
10,000
MMcf/Day
8,000
6,000
4,000
2,000
0
2004
2005
2006
2007
2008
WY S
2009
CO W SL
2010
2011
WY E
2012
UT
2013
CO NE
2014
WY N
2015
2016
CO SE
2017
MT
2018
2019
2020
The Obvious - Issues

Production is growing in Rockies
 Recent
Expansion out of Rockies
have moved bottle necks
The Obvious - Issues

Production is growing in Rockies
Recent Expansion out of Rockies have moved bottle necks

LNG “is” happening

LNG Imports (including Mexico and Canada)
20,000
18,000
16,000
14,000
MMcf/Day
12,000
10,000
8,000
6,000
4,000
2,000
0
2004 2005 2006 2007
2008 2009 2010 2011 2012 2013 2014 2015
2016 2017 2018 2019 2020
The Obvious - Issues

Production is growing in Rockies

Recent Expansion out of Rockies have
moved bottle necks

LNG “is” happening
Rate
Stacking & Fuel are
material
The Obvious - Solution
Don’t Fight LNG
Access Demand Directly
Build Big
“A Picture is Worth a 1000 Words”
Limited Take
Away Capacity
From Rockies
2003 – 2005
West to East
Pipeline
Forward Mid-Continent
and SoCal
Basis
TranZn6
$.99
are trending out
~ 3 Bcfd
2007
$1.39
~ 3 Bcfd
2003 – 2005 2007
MidCont ($.43)
LNG
($.57)
2003 – 2005 2007
SoCal ($.36)
($.48)
LNG
LNG
Source: EIA GasTran Gas Transport, 2003
Project Proposal
West to East Pipeline
CIG
SOUTHERN STAR
WIC
BURLINGTON LOST CREEK
ECHO SPRINGS
COLUMBIA GAS
DOMINION
NATIONAL FUEL
NORTH PENN
TETCO
TRANSCO
WIC-MEDICINE BOW
DOMINION
EAST OHIO GAS
TETCO
KMIGT PXP
OPAL
WAMSUTTER
LEIDY
KMIGT-HUNTSMAN STORAGE
TENNESSEE GAS
BIG SPRINGS
KANDA
COL. GAS
ANR
CHEYENNE
MEEKER
KMIGT
TRAILBLAZER
CIG
CHEYENNE PLAINS
PSCO
WIC
ENCANA GATHERING SERVICES
TRANSCOLORADO
TUSCOLA
ANR
NGPL
NNG
MULLET
LEBANON EQUITRANS
NGPL
TGT
MIDWESTERN
PEPL
TRUNKLINE
COLUMBIA GAS
DOMINION
TETCO
TEXAS GAS
BLANCO
PROPOSED PIPELINE-WAMSUTTER/MULLET
PROPOSED PIPELINE-MEEKER/WAMSUTTER
POTENTIAL PIPELINE
PROPOSED INTERCONNECTS
NGPL
TRANSCOLORADO
HUB
KMWE Pipeline Overview

42-inch 1500 mile pipeline from Wamsutter
to Eastern Ohio

2 Bcfd of long-haul capacity

Over 40 interconnects along the way

Optional supply and market extensions
considered separately (Opal / Greasewood /
Leidy, Penn.)
Value Proposition - Producers

Underlying value is key (wellhead pricing
would go up, basis volatility down)

PV-10 Reserve value to producers are
material with just 25 cents basis change

Access to Markets – over 20 Bcfd of LDC
load and 1.5 Tcf of storage

Extrinsic value of 40 Interconnects and
market based storage is real
Kinder Morgan Contacts
Lakewood, CO
Jeff Rawls: 303-914-4903
Mike Smith: 303-763-3484
Lombard, IL
Frank Strong: 630-691-3790