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Natural Gas & Oil Infrastructure in the Rockies An Update

Natural Gas & Oil Infrastructure in the Rockies An Update. JOINT MINERALS, BUSINESS AND ECONOMIC DEVELOPMENT COMMITTEE Casper, Wyoming May 25, 2006. A Lesson From Natural Gas. Garfield County, Colorado. Colorado Oil and Gas Commission. AAPG. Total of 2,127 Mcfd added in the past 5 yrs.

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Natural Gas & Oil Infrastructure in the Rockies An Update

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  1. Natural Gas & Oil Infrastructure in the RockiesAn Update JOINT MINERALS, BUSINESS AND ECONOMIC DEVELOPMENT COMMITTEE Casper, Wyoming May 25, 2006

  2. A Lesson From Natural Gas

  3. Garfield County, Colorado Colorado Oil and Gas Commission

  4. AAPG

  5. Total of 2,127 Mcfd added in the past 5 yrs

  6. THE FUTURE! 1.8 Bcfd 42 –inch diameter 1,323 Miles

  7. Crude Oil In The Rockies

  8. What Has Happened to Rockies Crude Prices?? • Rockies production increasing • Express Pipeline capacity increased in 2005 adding approximately 110,000 of potential additional Canadian crude • Export pipelines approached capacity in late 2005 • Suncor refinery fire eliminates demand for 60,000 Bopd • Refinery turnarounds and low sulfur diesel requirements exacerbate the problem

  9. Regional Crude Production is Growing in Some States 395 MBOPD 424 MBOPD EIA

  10. Current Status of Infrastructure

  11. Production/Refinery Balance Source: EIA

  12. The Law of Supply and Demand Wikipedia

  13. The Crude Market a Few Months Ago WY Sweet $35 KS $55.75 OK Sweet $60.75 WTI $60.75 Prices on 3/23/06

  14. The Market Today Platts – North America Crude Wire

  15. The World Might be Fine but for the Fact that …….

  16. Canadian Association of Petroleum Producers (CAPP)

  17. Canadian Association of Petroleum Producers (CAPP)

  18. Solutions to Crude Oil Bottlenecks in the Rockies

  19. The Future is Rail? Standard tank car is 23,500 gallons or 525-550 Bbls.

  20. Current Proposed Expansions are a Band-Aid to Long Term Development Efforts Enbridge (to Clearbrook, MN) 35,000 Bbl/D $0.15 per Bbl tariff (all shippers) Kinder Morgan Platte Pipeline (added pumping capacity) 15-25,000 Bbl/D $1.50 per Bbl tariff (new shippers only)

  21. Near term (2 yr) Kinder Morgan Pony Express Re-conversion up to 200,000 Bbl/D

  22. The Plan to Convert from Crude to Natural Gas

  23. Cost of a Reconversion • Natural Gas Contracts $124 million • Reconversion Cost $115 million • Cost Allocation to Existing Pipe $100 million? • Total Cost to Convert $339 million

  24. Follow an NGL Line to Cushing? Add in El Paso Medicine Bow to get you north and central.

  25. Longer term (3-5 yr) Grass roots pipeline from Wyoming to Cushing, OK 400,000 Plus Bbl/D – Up to $1.2 billion

  26. Solutions Require Commitments • Long Term Commitments to Capacity • Support of Canadian Imports to Anchor a Solution • Support and Commitment of Refiners to Buy Wyoming Crude • Support of Producing Community to “get behind a common solution – quickly”

  27. Wyoming Pipeline Authority Bryan Hassler Executive Director 303-748-6473 152 North Durbin Street, Suite 230 Casper, Wyoming 82601Office (307) 237-5009Fax (307) 237-5242 www.wyopipeline.com

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