canadaʼs oil & natural gas market access the key to … · canadaʼs oil & natural gas...
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Canada’s Oil & Natural Gas
Market Access
The Key to Future Growth
Calgary Real Estate Forum October 29, 2013
Energy Markets
Environment Benefits
Enabling Responsible Development
2
Source: Cenovus
Canadian Oil Sands
Global Crude Oil Reserves by Country
26 25 2130
3748
8092
102
141155
173
265298
0
50
100
150
200
250
300
Ven
ezue
la
Saud
i Ara
bia
Can
ada
Iran
Iraq
Kuw
ait
Abu
Dha
bi
Rus
sia
Liby
a
Nig
eria
Kaz
hakh
stan
Chi
na
Qat
ar
Uni
ted
Stat
es
billi
on b
arre
ls
Source: Oil & Gas Journal Dec. 2012
Restricted (81%)
Open to Private Sector
Oil Sands 56%
Other 44%
World Oil Reserves Open to
Private Sector
4
Canadian Oil Sands (Bitumen and SCO) & Conventional Production
5
Access to Markets – Pipeline Expansions in Development
2012 Canada and U.S. Demand for Crude Oil by Source Thousand Barrels per Day
7
0
2
4
6
8
10
12
14
China India EuropeanUnion
UnitedStates
Japan Korea
mmb/d
Net oil imports in the New Policies Scenario
2005201120202035
Changing Global Oil Import Needs
Source: IEA World Energy Outlook 2012, EIA
8
WCSB Takeaway vs Supply Forecast
9
Crude Oil Rail Exports Western Canada vs. North Dakota
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• Opportunities: • Relatively quick • Flexibility • Less diluent • Use in both
directions
• Challenges: • Recent safety • Higher costs • Limited loading and
tank car availability
Source: Peters & Co. Limited = Sept 2013
Environmental Performance
● Production § COSIA § GHG emissions § Water – oil sands/tight oil § Land/tailings
● Pipelines § Integrity & operations
● Marine § Prevention, response and
recovery – tankers/ports
● Regulation and Monitoring § Enhanced oil sands
monitoring – more sites, more transparency
§ Up to $50M/yr paid by industry
11
0 100 200 300 400 500 600
North Sea -‐ Forties
Brazil -‐ Tupi
Saudi Arabia -‐ Arab Light
US Barrel Refined in the U.S. (2005)
Iraq -‐ Kirkuk Blend
Cdn Oil Sands: Mining Dilbit (PFT)
Mexico -‐ Maya
Venezuela Bachaquero
US -‐ Mars
Cdn Oil Sands: Low SOR SAGD Dilbit
Iraq-‐Basra Light
Canadian Oil Sands: SAGD Dilbit
Nigeria -‐ Bonny Light
Cdn Oil Sands: Mining SCO
US -‐Kern River
Venezuela -‐ Petrozuata
kgCO2e per barrel of refined product
Well-‐to-‐tank
Refined productCombustion
The Oil Sands GHG Emissions Challenge Improving to at least the emissions of Similar Crudes
Source: IHSCERA Oil Sands Dialogue Getting the Numbers Right 2012
+5%
U.S. Barrel Refined in the U.S. (2005)
+2%
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13
Canadian Natural Gas
North American Unconventional Gas Resources
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Current Disposition of W. Canada’s Natural Gas Production (2012)
TransCanada Transmission Mainline
TQ&M
Westcoast
Kern River
Northwest Northern Border
TransCanada Alberta (NGTL)
NGPL
ANR
ANR El Paso
PG&E
SoCal
PGT
Texas Eastern
Panhandle
Algonquin
Transcontinental
ANG/ Foothills
NGPL
Northwest Foothills
El Paso
Transwestern
Trailblazer
M&NE
CNG
Iroquois PNGTS
Alliance
Lakes Great
West 2.5 bcf/d
Mid West 4.8 bcf/d
East 1.1 bcf/d
Domestic 5.3 bcf/d
15
● LNG for export ● Oil Sands growth ● Gas-fired power and cogeneration ● Vehicles – CNG/LNG
Natural Gas – Market Opportunities
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Industrial21.5%
Residential13.3%
Commercial12.1%Electricity
Generation13.4%
Vehicles0.2%
LNG19.2%
Oil Sands20.3%
NATURAL GAS DEMAND BY SECTOR -‐ 2035
Source: The Conference Board of Canada December 2012
0
5
10
15
20
25
30
35
40
45
50
2010 2015 2020 2025 2030 2035 2040
ChinaTaiwanIndiaSouth KoreaJapan
Imports to Asian Economies with Growing Natural Gas Requirements (Bcf/d)
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Source: EIA 2013 International Energy Outlook, Press reports, CAPP
Asian Markets Represent an Attractive Export Option
$/M
Mbt
u
2012 Japanese LNG Price
● Kitimat LNG (Chevron, Apache) § 1.4 Bcf/d § Permits received; awaiting investment decision
● BC LNG Export Co-operative § 0.125 Bcf/d § Permits received
● LNG Canada (Shell, KOGAS, Mitsubishi, PetroChina) § 2.0 – 3.2 Bcf/d § Feasibility stage; applied for some permits
● Pacific Northwest LNG (Progress/Petronas, Japex) § 2.0 Bcf/d (Merger approval granted) § Completed feasibility, progressing to pre-FEED
● Nexen/Inpex § Conducting feasibility
● Prince Rupert LNG (BG Group) § 3.0 Bcf/d § Advancing feasibility, applying for permits
● AltaGas/Idemitsu Kosan § 0.27 Bcf/d § Conducting feasibility
● ExxonMobil/Imperial Oil (WCC LNG Ltd) § 4.0 Bcf/d § Applied for export licence
● Woodfibre LNG § 0.3 Bcfd § Applied for export licence
Canadian LNG export projects in development
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Total potenPal new demand ~ 13.0 Bcf/d Expressions of interest to proceed with a project have also been made by; Woodside Petroleum & South Korea E&S
Canadian Production – Market Constrained Case and New Market Opportunity Case
Eastern Canada CBM Western Canada Unconventional Western Canada Conventional
Market Constrained Case
New Market Opportunity Case
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● Market Access for Oil § Decision or delay on Keystone XL
• Final Environmental Impact Statement – State Dept.
§ Decision on Enbridge Northern Gateway pipeline • NEB/JRP decision by end of 2013
§ Decision on reversal of Enbridge Line 9 to Eastern Canada • Reversal of existing pipeline - currently in hearing
§ Discussions to address BC’s 5 Conditions for oil pipelines § Applications for Trans Mountain and Energy East pipelines § Rail – safety, loading terminals, tank cars
● Market Access for Natural Gas § Announcement of decisions to proceed with LNG projects in BC § US policy decision/approvals for US LNG facilities § US GHG policy for existing coal plants
Key Indicators
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