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BC Natural Gas Symposium – Canadian Energy Research Institute

Canadian Energy Research Institute · Jun 2, 2015 · 50 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 1
    Canadian Energy Research Institute (CERI) Alternate Markets and Uses for BCs Abundant Natural Gas BC NATURAL GAS SYMPOSIUM Carlos A. Murillo Economic Researcher Canadian Energy Research Institute cmurilloceri.ca…
  2. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 2
    Questions to be addressed (as per agenda) Assess how recent gas activity has been driven by the anticipation of unprecedented demand Has British Columbia overestimated potential export market uptake How does significant upstream…
  3. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 3
    Presentation Outline About CERI Overview and recent trends: changing natural gas market dynamics in North America resulting in increasing natural gas and NGLs availability The liquefied natural gas (LNG) export opportunity: BC LNG…
  4. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 4
    Canadian Energy Research Institute Overview Founded in 1975, the Canadian Energy Research Institute (CERI) is an independent, non-profit research institute specializing in the analysis of energy economics and related environmental…
  5. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 5
    What are current natural gas market developments and what are the implications for local producers Overview and recent trends: changing natural gas market dynamics in North America resulting in increasing natural gas and NGLs…
  6. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 6
    Natural Gas Resources in Canada and BC (Year-End (YE) 2012) Canadian remaining marketable gas resources, trillions of cubic Remaining marketable gas feet (tcf) resources (RMGR) by type Western Canadian Sedimentary Basin (WCSB) 861…
  7. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 7
    Canadian Natural Gas (NG) Reserves and NG/NGLs Production (2013) Natural Gas Proved Reserves by Country as of Year-End (YE) 2013 Natural Gas Production by Country in 2013 (Top 10 Countries) (Top 20 Countries) (tcf), and Investment Risk…
  8. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 8
    British Columbia NG/NGLs Production in the Canadian Context Marketable Gas Production by Province (2014): Gas Plant NGLs Production by Province (2012): Total = 14.7 bcf/d Total = 614 kb/d 27.2% 8.8% 2.9% 2.2% 1.4% 67.5%…
  9. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 9
    Factors Affecting WCSB Gas Production Physical Changes: Emerging supply sources (shale and tight gas), Economics: Exchange rates and commodity price movements, intra-basin (AB vs. BC), and inter-basin (CAD vs. US) gas on gas…
  10. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 10
    Canadian (CAD) Natural Gas Supply/Demand (S/D) Balance 20.0 18.2 17.7 Supply by component (2013) Marketable Production by Supply: 17.6 17.4 17.5 17.4 17.1 18.0 0.6 0.9 17.0 1.3 16.6 17.0 16.8 16.3 1% Region (2013) - Domestic…
  11. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 11
    Albertas Natural Gas S/D 14.0 12.0 BC Imports 14.0 AB Gas Production 12.0 Balance 10.0 10.0 8.0 8.0 bcf/d 2012 AB Gas Supply: 10.1 bcf/d bcf/d 2012 AB Gas Disposition: 10.1 bcf/d 3% 6.0 12.7 6.0 11.9 11.7 11.8…
  12. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 12
    British Columbias Natural Gas 4.0 3.5 BC Gas Production 4.0 3.5 Imports: AB & NWT -- BC S/D Balance 3.0 2.5 3.0 2.5 bcf/d bcf/d 2012 BC Gas Supply: 3.6 bcf/d 2012 BC Gas Disposition: 3.6 bcf/d 2.0 2.0 3.5 3.4 1.5 2.9…
  13. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 13
    Changing Natural Gas Market Dynamics in North America have resulted in increasing natural gas (NG) and NGLs availability in Canada LNG project opportunities Diversify markets: LNG: Look West Opportunities to (Asia-Pacific) &…
  14. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 14
    Outlook for Natural Gas Production in Canada and BC Gas Pathways Project Outlook for Natural Gas Production in Canada (CAD) and British Columbia Full Speed Power Wave Ahead (BC) by Scenario (bcf/d), 2013 - 2030 North American LNG…
  15. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 15
    What is BCs opportunity in the LNG market The liquefied natural gas (LNG) export opportunity: BC LNG export projects in the context of the global LNG market Image Source: Government of British Columbia Relevant Independent…
  16. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 16
    BC LNG export projects in the context of the global NG and LNG market Some facts about the global natural gas and LNG market: Global Natural Gas Production (2013): 326 bcf/d Global Natural Gas Trade (2013): 100 bcf/d (30% of total)…
  17. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 17
    Global LNG Trade (2013) Global LNG Trade (2013) 35 364 30 312 25 260 20 208 bcm/yr bcf/d 15 156 10 104 5 52 - - LNG Exports LNG Imports Asia Pacific Europe Latin America North America Middle East CIS Africa…
  18. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 18
    Competition to Supply LNG in the Asia-Pacific Basin Qatar LNG Russia Alaska LNG (8 Operating) Sakhalin Island LNG Up to 2.6 bcf/day (Total 9.5 bcf/day) (currently 1.1 bcf/day) (currently 7.5 BC LNG bcf/day) Pipeline: 3.2 6.4 bcf/day…
  19. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 19
    BC LNG Export Projects Development Pipeline: Large potentialbut no FID yet MMtpa Watson Island 300 WCC Steelhead 250 Grassy Point Discovery 200 Aurora LNG Canada Kitimat 150 Cedar Prince Triton Rupert 100 Orca New…
  20. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 20
    Largest competitors for Canada in the Asia-Pacific LNG market AUSTRALIAN LNG EXPORT PROJECTS DEVELOPMENT PIPELINE US LNG EXPORT PROJECTS DEVELOPMENT PIPELINE 300 MMtpa Planned greenfield projects Planned brownfield projects Nikiski…
  21. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 21
    Another front in the competition: Russian supplies (Pipelines + LNG) Baltic LNG Yamal Peninsula Chukotka LNG Kamchatka LNG Sakhalin LNG Vladivostok LNG Altai Pipeline Power of Siberia Pipeline (to China): 3.7 bcf/d…
  22. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 22
    Competition for market share in the Asia-Pacific region and Canadas LNG opportunity ASSUMPTIONS: Demand: 50 Too many projects, not Regional LNG demand estimated to reach 45 enough demand = bcf/d by 2030 (compared to 23 bcf/d in…
  23. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 23
    BC LNG Economics and Competitiveness (1) Capital cost is the single largest component of the total Upstream Field Development (NEBC) NG Transmission Pipeline Liquefaction Facility Shipping Asia-Pacific LNG Market liquefaction…
  24. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 24
    Prices: The Bridge Between Supply and Demand Oil-Indexed Pricing 20 18 Pn = Po*(W1*(F1/F1o) + W2*F2/F2o) 16 Landed LNG Price /GJ 14 Pn = Determined price of LNG Po = Original negotiated price (at time 0) 12 X 10 W = weighting…
  25. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 25
    What can be done domestically (in CAD & BC) with BCs gas Domestic uses for BCs natural gas: increased power generation and industrial demand, fuel conversion, GTL, and petrochemicals Images from ENMAX, Cenovus Energy, and Nova…
  26. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 26
    Natural Gas Use in Canada (2003 2013) Total domestic demand in Canada increased by 22% (or +1.6 bcf/d) 10.0 8.9 between 2003 and 2013, at a compound annual growth rate (CAGR) of 2% 9.0 8.4 8.5 7.6 7.6 7.4 7.7 8.0 7.3 7.2 7.2 7.1…
  27. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 27
    The Future of Natural Gas Demand in Canada Incremental Gas Demand in Canada by Incremental Industrial Gas Demand in Canada by Province Sector (2013 - 2035): Total 4.9 bcf/d (2013 - 2035) Industrial Canada 2.3 2.3 Alberta 1.7…
  28. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 28
    Fuel conversion: Natural Gas Vehicles (NGVs) 1 2 (1) Current capacity of small-scale LNG facilities for transportation in Canada is estimated to be between 0.1 bcf/d to 0.2 bcf/d (NEB) (2) In the NEBs Reference Case, natural gas…
  29. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 29
    Gas to Liquids (GTL): Process and Project Economics 12 11 10 LOW CAPEX 9 BASE CAPEX HENRY HUB PRICE ( 2012/ MMBTU) HIGH CAPEX 8 7 6 5 4 PRICE COMBINATIONS TO 3 THE RIGHT OF A CURVE YIELD A POSITIVE NPV AT 2 THE…
  30. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 30
    Natural gas as a Petrochemical Feedstock Natural gas can be used produce various types of chemicals such as methanol and ammonia, as well as fuels such as di-methyl ether (DME) and other RPPs (via GTL) A 600 kt/yr urea plant requires…
  31. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 31
    What can be done with the by-products from gas production (NGLs) Natural gas liquids (NGLs) in Canada and BC: overview and potential marketing options (focus on ethane and propane) Images from ATCO Energy Solutions (Empress…
  32. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 32
    Raw Gas, Dry/sales gas, NGLs, LPGs, and other non-HC gases Raw natural gas (C5 - C6) or Pentanes Plus (C5+) Extracted at gas plants: Also produced at refineries (together from raw natural gas with other RPPs): from crude…
  33. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 33
    NGLs in Canada: Sources and End-Uses (2012) Domestic Natural Gas, Crude Oil, and Crude Bitumen Production Other Supply Total UPSTREAM Total Domestic US Imports Canadian Upgrader/Off-gas plants 218 kb/d (91% C5+) Gas Plant…
  34. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 34
    NGLs: from Reservoirs to Markets UPSTREAM (SOURCES) MIDSTREAM (PROCESSING & TRANSPORTATION) DOWNSTREAM (END-USE MARKETS) Transporation Refineries & Crude Oil Infrastructure Upgraders Refined Petroleum Products to Markets Crude Oil…
  35. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 35
    Canadian Midstream Infrastructure: From natural gas to NGLs to end-use markets Robust and extensive midstream and marketing infrastructure in NGLs/Products NATURAL GAS Canada targeting local and US markets Large natural gas storage…
  36. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 36
    NGLs Infrastructure and Ongoing Investments in Canada Pipeline Est. Capacity (kb/d) Product Raw Mix Pipelines to Ft. Saskatchewan (1) Increasing utilization of midstream assets resulting in large Peace HVP System (NGLs) 128 C2+/ C3+…
  37. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 37
    Canadian Petrochemical Industry Overview Capacity by region and type (kt/yr) and olefins/aromatics split (% of capacity) 9,000 92%/8% 60%/40% 0%/100% 75%/25% 8,000 6,958 7,000 6,000 1,722 5,000 4,467 kt/yr 370 4,000…
  38. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 38
    Midstream Infrastructure Outlook 800 (1) NGLs gathering pipeline capacity to 754 754 754 Alberta Liquids Pipeline System (ALPS)* Peace LVP System Expansion (Phase III) 1 700 Peace LVP System Expansion (Phase II) 644 Fort…
  39. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 39
    Liquefied Natural Gas (LNG) Export Projects Potential: Significant Infrastructure Requirements Proposed Gas Pipelines to Support BC LNG Export Projects 20 proposed LNG export projects in BC and 6 in Eastern Canada (Nova Scotia,…
  40. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 40
    LNG Potential: large-scale increases in NGLs extraction One large-scale LNG-oriented scheme (1.5 - 2 bcf/d) could extract over 150 kb/d of NGLs (75% C2/C3) from the raw gas stream (Montney gas) - However, there are various options as…
  41. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 41
    Emerging Ethane Supply Sources in Canada Incremental ethane extraction program (IEEP) projects, import pipelines, off-gases, and LNG C2 Volumes Royalty Credits Expected Onstream Commissioned Applicant Project Description (kb/d) (MM)…
  42. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 42
    Increasing Demand for Propane in North America Feedstock Competition 1 Propane Dehydrogenation (PDH) Projects in North America (1) Various PDH projects have been proposed in North America to take Company Location Start-up Year Output…
  43. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 43
    World/Asia-Pacific LPG Market 3.5 Refinery Production Asia-Pacific LPG Supply/Demand 3.1 3.1 2.9 Gas Plant Production 3.0 2.8 2.8 2.7 2.7 Imports 2.6 2.5 Statistical Adjsutment 2.5 2.3 2.3 Res./Comm./Agr., For., & Fish. 2.0…
  44. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 44
    Canadian Ethane Outlook (LNG Tsunami Scenario) 450 1 Potential BC LNG Ethane (LNG Canada) Vantage: Bakken Imports (1) Western Canada S/D 400 341 350 359 369 Off-gas Plants Supply: 325 320 316 320 322 326 350 289 292 299 285…
  45. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 45
    Additional ethane could be extracted in Western Canada 1,200 60% Ethane in Williston Basin's (ND Bakken) Gas Ethane in SK Raw Gas 1,000 935 956 50% 894 915 850 867 825 826 829 841 Ethane in BC Raw Gas 767 800 40% 685 684…
  46. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 46
    Canadian Propane Outlook (LNG Tsunami Scenario) (1) Canadian Propane S/D 400 Statistical Adjustment 344 Stock Changes Supply: 350 322 328 336 305 311 US Imports 296 297 297 302 - Gas plant production fluctuates with overall…
  47. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 47
    Evolving Propane dynamics in Canada What is required for West Coast LPG exports Western Canada Eastern Canada 120 300 Est. Transfers to Eastern Canada 140 Western Canada Propane Supply/Demand 100 Eastern Canada Propane…
  48. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 48
    North America and Canadian Petrochemical feedstock price advantage 1,400 AECO-C NG (/t) (1) Regional disparities in commodity prices (crude oil/NGLs/NG) has HH NG (/t) 1,200 AB ETHANE (/t) resulted in North America having some of the…
  49. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 49
    Back to our initial questions What are current natural gas market developments and what are the implication for producers in British Columbia Canada and BC have extensive natural gas resources but limited market options The shale gas…
  50. BC Natural Gas Symposium – Canadian Energy Research Institute – slide 50
    Thank you Questions and/or Comments Please visit us at: www.ceri.ca Relevant Independent Objective 50 www.ceri.ca

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