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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
H
Wyoming Pipeline AuthorityTrue PipelinesOctober 15, 2013
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
• Pipeline Integrity Management
• Summer 2012
• Spring 2013
• Summer 2013
• Belle Fourche/Pony Express
• Fort Laramie Rail
AGENDA
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Integrity Management: What is it?
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Internal & External Corrosion
• Damage caused by:– Water
– 3rd Party Damage (Coating)
• General Rule: Every jurisdictional pipe within HCA needs to be internally inspected every 5 years unless engineering analysis proves otherwise.
• “Smart Pig”: Magnetic Flux Leakage (MFL) Tool
• Anomalies: – Depending upon clustering
and wall loss, PHMSA has a strict set of classification for repairs. E.g., • Immediate Pressure Reduction,
• Immediate Repairs,
• 180 day repairs, etc..
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Pre-1970 ERW Line Pipe
From PHMSA
“Electric resistance welded (ERW) pipe is longitudinally welded pipe. A failure in the weld seam of this type of pipe can propagate for a distance along the pipe and can quickly release large quantities of product to the environment. Low-frequency (LF) ERW pipe installed prior to 1970 in particular can be susceptible to such failures.”
• Long Seam Inspected by Ultrasonic Tool
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Physical Regulations: Results
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Agenda
• Pipeline Integrity Management
• Summer 2012
• Spring 2013
• Summer 2013
• Belle Fourche/Pony Express
• Fort Laramie Rail
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Williston Basin Pipelines
Montana
Wyoming
North Dakota
South Dakota
Minnesota
Enbridge
Bu
tte
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
North Dakota Production
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100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
OTHERS
WILLIAMS
WARD
STARK
SLOPE
RENVILLE
MOUNTRAIL
Mercer
McLEAN
McKENZIE
McHENRY
VALLEY
DUNN
DIVIDE
BURKE
BOWMAN
BOTTINEAU
BILLINGS
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12
Mainline Throughput
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
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500,000
1,000,000
1,500,000
2,000,000
2,500,000
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500,000
1,000,000
1,500,000
2,000,000
2,500,000
Jan
-07
Sep
-07
May
-08
Jan
-09
Sep
-09
May
-10
Jan
-11
Sep
-11
May
-12
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-13
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-13
May
-14
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Sep
-15
May
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Sep
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May
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Jan
-25
Sep
-25
Basin Transload
US Dev. Van Hook
Dakota Transport
Plains - Ross
Musket
BakkenLink
Berthold Rail
Savage Services
Bakken Oil Express
Rangeland COLT
Additional Rail
Hess Rail
EOG Stanley Rail
ONEOK Bakken Crude Express*
Hiland
Keystone XL*
Butte Loop*
High Prairie*
Plains Bakken North
Enbridge Sandpiper*
Enbridge BEP 2
Enbridge BEP 1
Enbridge Mainline
Butte Expansion
Butte
Tesoro
Production
Production Forecast and Export Capacity
1.6Mbpd
2.5Mbpd of Takeaway
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
Jan
-07
Jul-
07
Jan
-08
Jul-
08
Jan
-09
Jul-
09
Jan
-10
Jul-
10
Jan
-11
Jul-
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-12
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Jan
-25
Jul-
25
PIPELINE VERSUS RAIL: PIPE WINS
Pipeline
Rail
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
CushingWTI: $0
Source: Platt’s North American Crude Wire
Market Destinations and Prices for near-Bakken equivalents
Summer 2012 Market Prices
East CoastBrent: +$16.5
Gulf CoastLLS: $16
West CoastANS: +$16
GuernseyLS: -$4
ClearbrookLS: -$4
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
Jan
-07
Jul-
07
Jan
-08
Jul-
08
Jan
-09
Jul-
09
Jan
-10
Jul-
10
Jan
-11
Jul-
11
Jan
-12
Jul-
12
Jan
-13
Jul-
13
Jan
-14
Jul-
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Jan
-15
Jul-
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Jan
-16
Jul-
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Jan
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Jul-
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Jul-
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PIPELINE VERSUS RAIL: RAIL WINS
Pipeline
Rail
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Agenda
• Pipeline Integrity Management
• Summer 2012
• Spring 2013
• Summer 2013
• Belle Fourche/Pony Express
• Fort Laramie Rail
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Spring 2013
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
Jul-
10
Au
g-1
0
Sep
-10
Oct
-10
No
v-1
0
De
c-1
0
Jan
-11
Feb
-11
Mar
-11
Ap
r-1
1
May
-11
Jun
-11
Jul-
11
Au
g-1
1
Sep
-11
Oct
-11
No
v-1
1
De
c-1
1
Jan
-12
Feb
-12
Mar
-12
Ap
r-1
2
May
-12
Jun
-12
Jul-
12
Au
g-1
2
Sep
-12
Oct
-12
No
v-1
2
De
c-1
2
Jan
-13
Feb
-13
OTHERS
WILLIAMS
WARD
STARK
SLOPE
RENVILLE
MOUNTRAIL
Mercer
McLEAN
McKENZIE
McHENRY
VALLEY
DUNN
DIVIDE
BURKE
BOWMAN
BOTTINEAU
BILLINGS
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Butte Southbound Deliveries: Spring 2013
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Systems
Bu
tte
Par
shal
l
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Parshall Gathering System
BN
SF
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Deliveries - BPD by Location
Stanley to Hawthorn Pl Stanley to Enbridge Pl Stanley to Loadout
Deliveries - BPD by Location
Parshall Gathering System
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Four Bears Pipeline
Dunn
McKenzie
Stark
Billings
Fact SheetOrigin: 13 mi W of New TownDest.: 12 mi NNE of Belfield• 77 Miles of 12” Epoxy
Coated Steel PipelineOil Receipt Locations• Keene Truck Terminal• Killdeer Truck Terminal• Gathering SystemsDeliveries• Butte Pipe Line at Baker,
MT• Bakken Oil Express Rail
Terminal at DickinsonCapacity• To Baker: 80,000• To BOE: 55,000
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Deliveries - BPD by LocationDeliveries - BPD by Location
Four Bears
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Deliveries - BPD by Location
Belle Fourche North Dakota
Deliveries - BPD by Location
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Agenda
• Pipeline Integrity Management
• Summer 2012
• Spring 2013
• Summer 2013
• Belle Fourche/Pony Express
• Fort Laramie Rail
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
WTI-LLS vs Mainline Throughputs
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
70,000
80,000
90,000
100,000
110,000
120,000
130,000
140,000
150,000
160,000
170,000
Spring 2013-Economic to Rail-Rail Capacity is Expanding
Summer 2013-Not Economic to Rail
Summer 2012-Economic to Rail-Not Enough Rail Capacity
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Agenda
• Pipeline Integrity Management
• Summer 2012
• Spring 2013
• Summer 2013
• Belle Fourche/Pony Express
• Fort Laramie Rail
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Belle Fourche/ Pony Express Project
• Tallgrass• Convert Pony Express Pipeline form
natural gas service to crude oil service. • Extend the Pony Express line by 260
miles to Cushing, Oklahoma.• Bridger and Belle Fourche
• 155 miles of new pipe from Baker to Donkey Creek (PRB).
• Expand Phase I construction from a 12” mainline to a 16” mainline.
• Expand Belle Fourche Guernsey terminal.
• Summary• Total distance to Cushing: ~1,200 miles• Utilizes 1,800 miles of pipe.• 80% of the pipe is already in the
ground.• This proposal solves both Intra-Regional
Constraints and Inter-Regional Constraints.
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Intra Regional Constraints: Truck Terminal Coverage
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Belle Fourche/ Pony Express Open Season
Intra Regional Constraints• Belle Fourche and Bridger
gathering mainlines are no farther than 30 miles away from 80% of Montana and North Dakota’s production.• Economic & Expedited Lease
Gathering • Minimize Truck Haul Distance
• With the BF Reversal, Four Bears Expansion, Poplar and PAA pipelines, total capacity into Baker exceeds 300,000bpd.
• In Service August 2014
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Agenda
• Pipeline Integrity Management
• Summer 2012
• Spring 2013
• Summer 2013
• Belle Fourche/Pony Express
• Fort Laramie Rail
32
True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Cushing
Tight Oil in the Mid-Continent
East Coast
Gulf Coast
West Coast Guernsey
Clearbrook
Permian+1,000 Light
Eagle Ford
700 Light
Anadarko+275 Light
Bakken+500 Light
Uinta100 Light
Canada800 Heavy100 Light
Niobrara275 Light
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Guernsey/ Fort Laramie: The hub of the Rockies
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Guernsey Terminal
Plains– Big Horn Basin Wyoming Asphalt
True - Belle FourchePowder River Basin
“Niobrara” Sweet & Sour
Kinder Morgan-PlatteCanadian Heavy
& Synthetic
True - Butte Williston BasinBakken & CCA
Plains WamsutterCondensate
Guernsey/Ft. Laramie Inbound Pipes
SinclairColorado Niobrara
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
The Project
Guernsey Terminal Fort Laramie Rail Terminal
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
Design Features• Incoming Pipeline: 3,500bph
(expandable to 5,000bph)• Loading Pumps: 8,000bph• 3 rail loop tracks (expandable
to four)• Two 100,000 bbl tanks (one
for sweet and one for heavy)• Double Sided Loading Rack
(24 Load Arms)• Initial Capacity: 1 Train per
day (80,000bpd of Light)• Expanded Capacity: 2 Trains
per day (160,000 of Light)
The Project
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
To the East Coast
East CoastPhiladelphia, PA
Albany, New YorkDelaware
Displaced CrudesArabian Light
Nigerian Bonny
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
West CoastBakersfield, CALos Angeles, CA
San Francisco, CASeattle, WA
Anacortes, WA
To the West Coast
Displaced CrudesRussian ESPO
Indonesian SenoSaudi Heavy
Ecuadorian Napo
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True Companies • Wyoming Pipeline Authority
October 15, 2013 • Pipelines
CushingWTI
Gulf CoastLLS
East CoastBrent
West CoastANS
GuernseyLS
ClearbrookLS
Where’s the Oil Going to Flow?
Conclusions
Observations• Rail is here to stay.• Pony Express will tie
Wyoming to the most liquid oil market in the world.
• The EEO Rail Terminal will tie Rockies production to world markets.
• Most importantly, these two projects will cause Wyoming to become an import constrained market instead of an export constrained market.