Rocky Mountain Crude Oil Market Dynamics Tad True, Belle Fourche & Bridger Pipelines Wyoming Pipeline Authority October 26, 2010
Agenda & Introduction Logistical Constraints for Rockies Production: Inter Region Constraints: Getting Barrels out of the Rockies Intra Region Constraints: Getting Barrels out of the Williston Basin Lease Constraints: Getting Barrels off the Lease Baker 300
Getting Barrels out of the Rockies INTER-REGION CONSTRAINTS
Rocky Mountain Crude Complex Hardisty, AB Regina, SK Great Falls, MT Montana Refining 8,200 Clearbrook, MN Salt Lake City, UT Big West 25,000 ChevronTexaco 45,000 Holly Corp 25,000 Silver Eagle Refining 12,500 Tesoro 60,000 Billings, MT ConocoPhillips 58,000 ExxonMobil 60,000 Cenex 56,000 Reno Jct., WY Casper, WY Sinclair 22,500 Rawlins, WY Sinclair 72,000 Newcastle, WY Wyoming Refining 12,500 Guernsey, WY Cheyenne, WY Frontier 52,000 Denver, CO Suncor 88,000 Mandan, ND Tesoro 58,000 McPherson, KS NCRA 79,000 El Dorado, KS Frontier 110,000 St. Paul, MN Flint Hills Resources 298,000 MarathonAshland 70,000 Chicago, IL ExxonMobil 238,000 BP PLC 399,000 CITGO 159,000 Wood River, IL ConocoPhillips 306,000 Cushing, OK
Rocky Mountain Crude Complex Hardisty, AB 1,300,000 Pipeline Export Capacity Regina, SK 1,100,000 Great Falls, MT Montana Refining 8,200 Clearbrook, MN 900,000 700,000 500,000 Billings, MT ConocoPhillips 58,000 ExxonMobil 60,000 Cenex 56,000 Reno Jct., WY Casper, WY Sinclair 22,500 Rawlins, WY Sinclair 72,000 Newcastle, WY Wyoming Refining 12,500 Guernsey, WY Cheyenne, WY Frontier 52,000 Mandan, ND Tesoro 58,000 St. Paul, MN Flint Hills Resources 298,000 MarathonAshland 70,000 Chicago, IL ExxonMobil 238,000 BP PLC 399,000 CITGO 159,000 300,000 Denver, CO Suncor 88,000 100,000-100,000 Enbridge Platte White Cliffs
Rocky Mountain Crude Complex Hardisty, AB Regina, SK 1,300,000 Pipeline Export Capacity + Refinery Consumption 1,100,000 Great Falls, MT Montana Refining 8,200 Clearbrook, MN 900,000 700,000 500,000 Billings, MT ConocoPhillips 58,000 ExxonMobil 60,000 Cenex 56,000 Reno Jct., WY Casper, WY Sinclair 22,500 Rawlins, WY Sinclair 72,000 Newcastle, WY Wyoming Refining 12,500 Guernsey, WY Cheyenne, WY Frontier 52,000 Mandan, ND Tesoro 58,000 St. Paul, MN Flint Hills Resources 298,000 MarathonAshland 70,000 Chicago, IL ExxonMobil 238,000 BP PLC 399,000 CITGO 159,000 300,000 Denver, CO Suncor 88,000 100,000-100,000 Enbridge Platte White Cliffs Refinery Consumption TRADITIONAL TAKE AWAY CAPACITY
Material Balance with Traditional Takeaway 1,300,000 Options 1,100,000 900,000 700,000 500,000 Imports 300,000 Rocky Mountain Production 100,000 (100,000) Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Rocky Mountain Production Imports TRADITIONAL TAKE AWAY CAPACITY
Non-Traditional Crude Takeaway Options Rail
Material Balance with Non-Traditional Takeaway Options 1,300,000 1,300,000 1,100,000 1,100,000 900,000 900,000 700,000 700,000 1 st ND Rail Facility 500,000 300,000 White Cliffs More Rail Enbridge Phase VI 500,000 300,000 100,000 100,000 (100,000) -100,000 Rocky Mountain Production Imports TRADITIONAL TAKE AWAY CAPACITY NON-TRADITIONAL TAKE AWAY CAPACITY
Material Balance with Non-Traditional Take- Away Options 1,400,000 1,400,000 1,200,000 1,200,000 1,000,000 1,000,000 800,000 800,000 600,000 400,000 200,000 Keystone Effect New Rail Facilities Baker Keystone XL Connection 600,000 400,000 200,000-0 Rocky Mountain Production Imports TRADITIONAL TAKE AWAY CAPACITY NON-TRADITIONAL TAKE AWAY CAPACITY
Inter-Region Constraints After Planned Pipeline Export Options in addition to Non-Traditional Facilities, Rockies has sufficient, but inefficient takeaway capacity. Continuing Concerns Non-Traditional Options are expensive Intra-Regional Transportation Constraints Lease Transportation Constraints
Moving Barrels Out of the Williston Basin INTRA-REGIONAL CONSTRAINTS
Rocky Mountain Crude Complex Intra-Regional Constraints 161,000
Moving Barrels off the lease LEASE CONSTRAINTS
Mountrail McKenzie Dunn PICTURE OF MOUNTRAIL, DUNN AND MCKENZIE
Mountrail, Dunn & McKenzie Counties 250,000 200,000 150,000 100,000 50,000 - MOUNTRAIL McKENZIE DUNN Dec-09 Jul-10 Jan-00 Aug-00 Mar-01 Oct-01 May-02 Dec-02 Jul-03 Feb-04 Sep-04 Apr-05 Nov-05 Jun-06 Jan-07 Aug-07 Mar-08 Oct-08 May-09
Transportation Costs Total Est. Cost To Guernsey: ~$8 TODAY ~$2 ~$6
Transportation Costs Total Est. Cost To Guernsey: ~$4.10 Four Bears ~$1.5 ~$2.60
Solutions BAKER 300
Overview Raymond Stanley 300,000 Montana BPD INTO BAKER Alexander Poplar Fisher Hwy 201 Richey Glendive Fryburg Bridger Parshall Gathering Mandan North Dakota Billings Baker 300,000 BPD OUT Wyoming OF BAKER Reno Jct. Powder River Osage Mush Creek Alzada Newcastle South Dakota Casper Rawlins Ft. Laramie/ Guernsey Nebraska Cheyenne
Project Overview Baker Balance: 2010 Raymond Stanley 130,000 Montana BPD INTO BAKER Alexander Poplar Fisher Hwy 201 Richey Glendive Fryburg Bridger Parshall Gathering Mandan North Dakota Billings Baker 140,000 BPD OUT OF BAKER Wyoming Reno Jct. Powder River Osage Mush Creek Alzada Newcastle South Dakota Casper Rawlins Ft. Laramie/ Guernsey Nebraska Cheyenne
Project Overview Baker Balance: 2011 Raymond Stanley 190,000 Montana BPD INTO BAKER Alexander Poplar Fisher Hwy 201 Richey Glendive Fryburg Bridger Parshall Gathering Mandan North Dakota Billings Baker 170,000 BPD OUT OF BAKER Wyoming Reno Jct. Powder River Osage Mush Creek Alzada Newcastle South Dakota Casper Rawlins Ft. Laramie/ Guernsey Nebraska Cheyenne
Project Overview Baker Balance: 2012 Raymond Stanley 240,000 Montana BPD INTO BAKER Alexander Poplar Fisher Hwy 201 Richey Glendive Fryburg Bridger Parshall Gathering Mandan North Dakota Billings Baker 200,000 BPD OUT OF BAKER Wyoming Reno Jct. Powder River BFPL: 30,000 Osage Mush Creek Alzada Newcastle South Dakota Casper Rawlins Ft. Laramie/ Guernsey Nebraska Cheyenne
Project Overview Baker Balance: 2013 Raymond Stanley 300,000 Montana BPD INTO BAKER Alexander Poplar Fisher Hwy 201 Richey Glendive Fryburg Bridger Parshall Gathering Mandan North Dakota Billings Baker 300,000 BPD OUT OF BAKER Wyoming Reno Jct. Powder River Osage Mush Creek Alzada Newcastle South Dakota Casper Rawlins Ft. Laramie/ Guernsey Nebraska Cheyenne
Baker 300 Summary Inter Regional Constraints: Keystone XL Connection: 100,000 Intra Region Constraints: Butte Expansion: 32,000bpd Belle Fourche Loop: 50,000bpd Lease Constraints: With existing lines and Four Bears, most producing wells in western North Dakota will be no farther than 30 miles from pipeline access.
Rocky Mountain Crude Oil Market Dynamics Tad True, Belle Fourche & Bridger Pipelines Wyoming Pipeline Authority October 26, 2010