Why Now Canadian Energy Research Institute Peter Howard Canadian Energy Research Institute April 2014 Canadian Energy Research Institute Upcoming Study Releases Natural Gas Liquids NGLs ID: 812058
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Slide1
Exports of LNG and LPG’sWhy Now?
Canadian Energy Research Institute
Peter
Howard
Canadian
Energy Research
Institute
April, 2014
Slide2Canadian Energy Research InstituteUpcoming Study ReleasesNatural Gas Liquids (NGLs) in North America: An UpdatePart I – UpstreamForthcoming April 2014Natural Gas Liquids (NGLs) in North America: An UpdatePart II – Midstream and Downstream InfrastructureForthcoming April 2014
Natural Gas Liquids (NGLs) in North America: An UpdatePart III – Market FundamentalsForthcoming April 2014
Slide3Canadian Energy Research InstituteUpcoming Study ReleasesNatural Gas Liquids (NGLs) in North America: An UpdatePart IV – Global Markets and OpportunitiesForthcoming April 2014Natural Gas Liquids (NGLs) in North America: An UpdatePart V – Future OutlookForthcoming May 2014
An Economic Analysis of TransCanada’s Energy East Pipeline ProjectForthcoming April 2014
Slide4Canadian Energy Research InstituteUpcoming Study ReleasesOil PathwaysForthcoming May 2014Canadian Oil Sands Supply Costs and Development Projects (2013-2047)Forthcoming May 2014
Slide5The Story Starts Here!North American Natural Gas Market (2013-2030)
Slide6North American Natural
Gas Industry “A Tale of Two Countries”
2013 Alberta Gas Well Licenses
1077 Horizontal Wells (76%)
244 Slant/Deviated (17%)
89 Vertical (6%)
Total 1410 Gas Directed Well Licences
2012
Marcellus
2,000 capped gas wells
2,100-2,300 new wells per year
NGLs
30-35 bbls/mmcf
4,5,6 wells per pad
90% horizontal
17 to 22 Bcf/day
Slide7Emerging supply sources: inter-basin gas-on-gas competition
Images from US EIA and Ziff/NEB
Slide8North American Natural Gas Demand PathwaysWCSB Export Volumes: LNG Tsunami (without LNG)
- 4.8 bcf/day
Slide9North American Natural Gas Demand PathwaysWCSB Production Forecast: LNG Tsunami (without LNG)
Slide10North American NGL PathwaysWCSB NGL Recovery Forecast: Ethane
Slide11Global Competition for theAsia-Pacific Market
Slide12NE British Columbia versus NW Alberta
North American Natural Gas Demand PathwaysBC LNG Projects
Slide13ChinaKoreaJapanIndiaAlaska LNG 4.5 bcf/dayKitimat LNGLNG CanadaPacific Northwest LNGWest Coast LNGPrince Rupert LNGWoodfibre LNGUp to 20 bcf/day
Jordon CoveOregon LNG
Sabine Pass
Freeport LNG
Cameron LNG
Dominion Cove LNG
Lake Charles LNG
Corpus Christi LNG
Up to 35
bcf
/day
Australia Operating
Australia Under Construction
Australia Proposed
(2.5
bcf
/day)
Russia
Sakhalin Island LNG
(1.1
bcf
/day)
Pipeline (
2.1
bcf
/day
)
Competition to Supply LNG in the Asia-Pacific Basin
2012 LNG Trade
(average per day)
Qatar
LNG
(8
Operating)
(Total 10.9
bcf
/day)
(8.0
bcf
/day)
Mozambique
Anadarko
Shell
Up to
6.5
bcf
/day
West Africa
Indonesia
Malaysia
(7.4
bcf
/day)
3.2 – 11.3 – 16.0
bcf
/day
Slide14Oregon LNG
Slide15How Competitive is Western Canada?
Slide16Economic Viability of Gas Developments in the WCSBA Supply Cost ComparisonThe Supply Cost value represents the natural gas price that is required to cover all costs (capital, operating, royalties and taxes) and earn a minimum return on investment (10 percent real).The Supply Cost calculation includes the uplift value of producing, capturing and selling natural gas liquids in concert with natural gas production.
Slide17Western Canada What Makes the Gas World WorkBC Montney Supply Cost Example
Average Liquid Content (40
bbls
/
mmcf
)
Slide18Economic Viability of Gas Developments in the WCSBSupply Cost Results
Slide192013 Gas Directed
Licences
1
Montney
(277)
2
Wilrich
(125)
3
Milk River (113)
4
Glauconitic (97)
5
Duvernay
(88)
6
Falher
(86)
7
Bluesky
(56)
8
Notikewan
(50)
Slide20AlbertaEncana 292Peyto 116Shell 84Paramount 67Tourmaline 70Bonavista 61Apache 48Husky 43Seven Generations 44
9 producers 82560% of total licencesTotal Gas Licences (AB) 1410
British Columbia
Shell 219
Progress Energy 180
Encana
94
CNRL 59
ARC Resources 74
5 producers 626
70% of total licences
Total Licences (BC) 901
North American Natural Gas Demand Pathways
New Gas Directed Licences (2013)
Slide21Coastal GasLink1.7 Bcf/day initial3.2 Bcf/day ultimateLNG CanadaKitimat
1.6 Bcf/day initial3.2 Bcf/day ultimate
Prince Rupert Gas
Transmission
2.0
Bcf
/day
Pacific North-West LNG
1.6
Bcf
/day
Prince Rupert
TCPL
Groundbirch
Pipeline
BG-Spectra
4.2
Bcf
/day
Slide22North American Natural Gas Demand PathwaysWest Coast Competition: Canada versus the United States
Slide23Producer Optionality?
Slide24North American NGL PathwaysProducer Options: Alberta Market(Field Separation)
Alberta Market (AECO)
Edmonton Diluent
Edmonton Butane
Edmonton Propane
AB Ethane Market
Gas to Liquids
Methanol
LNG Hot Gas
LNG
LPG (Butane)
LPG (Propane)
Ethane
Methanol
Slide25North American NGL PathwaysProducer Options: Alberta Market(Field Shallow cut plant)
Alberta Market (AECO)
Edmonton Diluent
Edmonton Butane
Edmonton Propane
AB Ethane Market
Gas to Liquids
Methanol
LNG Hot Gas
LNG
LPG (Butane)
LPG (Propane)
Ethane
Methanol
Slide26North American NGL PathwaysProducer Options: Alberta Market(Field Deep Cut plant)
Alberta Market (AECO)
Edmonton Diluent
Edmonton Butane
Edmonton Propane
AB Ethane Market
Gas to Liquids
Methanol
LNG Hot Gas
LNG
LPG (Butane)
LPG (Propane)
Ethane
Methanol
Slide27North American NGL PathwaysProducer Options: LNG Exports, LPG Exports
Alberta Market (AECO)
Edmonton Diluent
Edmonton Butane
Edmonton Propane
AB Ethane Market
Gas to Liquids
Methanol
LNG Hot Gas
LNG
LPG (Butane)
LPG (Propane)
Ethane
Methanol
Slide28North American NGL PathwaysProducer Options: LNG Exports
Alberta Market (AECO)
Edmonton Diluent
Edmonton Butane
Edmonton Propane
AB Ethane Market
Gas to Liquids
Methanol
LNG Hot Gas
LNG
LPG (Butane)
LPG (Propane)
Ethane
Methanol
Slide29North American NGL PathwaysProducer Options: Alberta Market – LPG Exports
Alberta Market (AECO)
Edmonton Diluent
Edmonton Butane
Edmonton Propane
AB Ethane Market
Gas to Liquids
Methanol
LNG Hot Gas
LNG
LPG (Butane)
LPG (Propane)
Ethane
Methanol
Slide30North American NGL PathwaysBC Montney NGL Recovery Forecast: Propane, Butane
Propane to Edmonton ?
Propane to Global Market ?
Slide31Let the Games Begin?
Slide32North American Natural Gas Demand PathwaysReference Case: LNG Export Potential to the Pacific Basin
Slide33North American Natural Gas Demand PathwaysReference Case: LNG Export Potential to the Pacific BasinRussian Gas by Pipeline (6 bcf/day)
Lower 48Sabine Pass (UC)Freeport (AA)Cameron LNG (AA)Oregon LNG (AA)
Up to 4
bcf
/day
UC = Under Construction
AA = Awaiting Final Approvals
Slide34North American Natural Gas Demand PathwaysReference Case: LNG Export Potential to the Pacific BasinBC LNG Projects2 Projects (AFID) Up to 3 bcf/day
BC LNG Projects1 ProjectMaybe!!!!
ADIF= Awaiting Final
Investment Decision
Slide35North American Natural Gas Demand PathwaysReference Case: LNG Export Potential to the Pacific BasinAsia Pacific LNG Pinch Point
“GAS Olympics”
Slide36Competition in the Asia-Pacific BasinChanging Market Prices (decoupling from Oil)Capital Cost Overruns (Greenfield Projects)Upstream Development CostsTransportation Costs (Tanker)Pipeline TollsHighLow
Risks Associated with BC LNG Projects
Slide37Global NGL’s and Naphtha Petrochemical FeedstockIEA Forecast
Slide38Canadian Energy Research Institute
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