BAKKEN UPDATE: GAS GATHERING SHORT TERM Viewpoint January 30, 2014 Bill Koch, Director - Business Development, Summit Midstream Partners LP
Gas Gathering Short Term Update Today s Gas Gathering Solutions To Reduce Flaring Ø What are your takeaway options, where are they, can you get to them, and is the cost of doing so justified Ø Identify gas plants that are planned to be built Ø Examine Gas Gathering And Takeaway Projects To Determine The Progress Being Made Towards Eliminating Flaring Bill Koch, Director - Business Development, Summit Midstream Partners LP
MAJOR CURRENT ASSESTS IN THE BAKKEN 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Oneok 76.5 113.5 113.5 113.5 113.5 213.5 313.5 413.5 513.5 813.5 Hess 110 110 110 110 110 110 110 110 250 250 Aux Sable 0 0 110 110 110 110 110 110 110 110 Hiland 4 40 65 115 155 155 155 155 155 155 Whiting 0 40 45 90 90 100 120 125 145 145 Targa 0 0 0 0 45 45 45 45 45 45 XTO 0 10 10 10 10 10 10 10 10 10 PetroHunt 32 32 32 32 32 32 32 32 32 32 222.5 345.5 485.5 580.5 665.5 775.5 895.5 1000.5 1260.5 1560.5 Taken from the NDIC Web Site at h5p://ndpipelines.files.wordpress.com/2012/06/ gas- plant- table- jan- 2014.jpg Bill Koch, Director - Business Development, Summit Midstream Partners LP 3
Oneok Ø Oneok is the largest gas gatherer and processor in the Williston Basin and for the Bakken Ø Six New Plants plus lots of added gathering and compression ü Garden Creek 100 Mmcf/d Dec. 2011 ü Stateline 1 100 Mmcf/d September 2012 ü Stateline 2 100 Mmcf/d - April 2013 ü Divide CO Gathering 2013 to 2014 in service ü Garden Creek 2 100 Mmcf/d 3 rd qt 2014 ü Garden Creek 3 100 Mmcf/d 1 st Quarter 2015 ü Lonesome Creek 200 Mmcf/d - EOY 2015 Ø POP with Fee based components Ø 3.1 Million acres dedicated in a 5 million acre footprint Ø Includes wellhead to integrated value chain within the NGL segment ONEOK Partners, L.P. at UBS MLP One- on- One Conference Tuesday, January 14, 2014 4
Oneok Ø Natural Gas Liquids Ø $100 MM to expand Bakken NGL to 135,000 bpd by 3 rd quarter 2014 Ø Additional $100 MM to go to 160,000 by 2016 Ø Overland Pass and Bushton are also expanded Ø Primarily Fee based contracts Ø $2.3 to $2.5 billion investment in Midstream ONEOK Partners, L.P. at UBS MLP One- on- One Conference Tuesday, January 14, 2014 5
Hess Tioga Ø In 1951 Hess Petroleum Corporation discovered Oil 8 miles south of Tioga. The oil field which grew up around this original site is a small part of the oil bearing region called the Williston Basin. Ø The existing plant is maxed out at about 110 million cubic feet per day Ø Hess will add significantly to its midstream operations and expand the capacity of its Tioga gas plant from 100 MMcf/d to 250 MMcf/d Ø Plans include expanding Tioga rail capacity to 120,000 bpd from 54,000 bpd. Ø Also significant gas, oil and water gathering lines being put in service. Ø The expansion gives Hess capacity to process its current and future needs, as well as meet needs for other companies. Ø Hess began designing the expansion to its plant in 2009 and has had up to 1,200 workers per day working on construction. Hess informauon from http://www.fool.com/investing/general/2014/01/16/can-hess-have-its-cake-and-eat-it-too.aspx and http://oilpatchdispatch.areavoices.com/2013/11/22/hess-ready-to-use-expanded-tioga-gas-plant/ 6
Hess Tioga Hess informauon from http://www.fool.com/investing/general/2014/01/16/can-hess-have-its-cake-and-eat-it-too.aspx and http://oilpatchdispatch.areavoices.com/2013/11/22/hess-ready-to-use-expanded-tioga-gas-plant/ 7
Tioga and Ethane Takeaway out of the Basin On July 16, 2013 Presidential permit approved was received for Vantage Pipeline which will connect a natural gas processing plant in Tioga, N.D., to pipelines in Canada.
Ethane Takeaway out of the Basin and Hess Tioga Ø The 430- mile pipeline will transport ethane from Hess Corp. s processing plant to a pipeline network near Empress, Alberta, with a flow rate of 40,000 to 60,000 barrels per day. Ø The North Dakota poruon of the pipeline is about 80 miles. Ø The Vantage project is esumated to require 400,000 man hours to construct and cost $300 million. Ø The Vantage Pipeline was approved in three years, while the Keystone XL has been delayed for six.
Hess Tioga and Gas Takeaway Ø Alliance has put in service n 80 mile lateral pipeline12-inch pipeline began in October of 2012 and was completed in early September at a cost of approximately $170 million in place to take residue gas from the new Tioga Plant. Ø The pipeline runs from the Hess Corp. gas processing plant near Tioga and connects to the Alliance mainline at a location near Sherwood. Ø The Alliance mainline is more than 2,300 miles and runs from the western British Columbia to a market hub in Chicago. Ø Hess has an contract with Alliance Pipeline for use of half the line s capacity. Ø The line has a capacity for moving 126 MMcf/d. Hess informauon from http://www.fool.com/investing/general/2014/01/16/can-hess-have-its-cake-and-eat-it-too.aspx and http://oilpatchdispatch.areavoices.com/2013/11/22/hess-ready-to-use-expanded-tioga-gas-plant/ 10
Gathering Systems behind Aux Sable Ø Aux Sable Midstream owns the Palermo Conditioning Plant and Prairie Rose Pipeline. Ø Aux Sable was the 1 st Ethane outlet for Bakken Gas. Ø Three separate Gas Gathering Systems connect to and deliver Gas to the Palermo Plant 1. The Summit Midstream operated Bison System. 2. The Hess Operated Ross System. 3. The EOG operated Pecan System. From the Aux Sable web site at http://www.auxsable.com/story.html
Hiland Partners Midstream affiliate of Continental Resources Ø Continental Resources owns 1.2 million net acres in the Bakken 98% is HBP. 300 net wells with 3 new density pilots (18 new wells) and 26 exploratory 3 forks wells. Ø Hiland efforts will be focused on taking production from the muti and mega pads from Continetal in 2014 for large production impacts in 2015. Ø Hiland connects the wells of natural gas and crude oil producers in our operating areas to our natural gas gathering systems, treat natural gas to remove impurities, process natural gas for the removal of NGLs, fractionate NGLs into NGL products and provide an aggregate supply of natural gas and NGL products to a variety of natural gas transmission pipelines and natural gas markets. Ø Shown next are the Hiland Plants in the Bakken area From the Hiland Web site at http://www.hilandpartners.com/index.cfm?id=15
Hiland Partners Midstream affiliate of Continental Resources Watford City Natural Gas Gathering System Location: Williams, McKenzie, Dunn, Billings Counties, North Dakota; Roosevelt County, Montana Miles of Pipe: 487 miles of natural gas gathering pipelines Gathering Capacity: 100,000 Mcf/d Processing Capacity: 100,000 Mcf/d Fractionation Capacity: 10,700 Bbls/d Basin/Formation(s): Williston; Bakken Shale and Three Forks/Sanish Treating Capacity: 40,000 Mcf/d Fractionation Capacity: 4,000 Bbls/d of NGLs Basin/Formation(s): Williston; Red River Norse Natural Gas Gathering System Location: Williams, Divide and Burke Counties, North Dakota Miles of Pipe: 74 miles of natural gas gathering pipelines Gathering Capacity: 25,000 Mcf/d Processing Capacity: 25,000 Mcf/d Basin/Formation(s): Williston; Bakken Shale and Three Forks/Sanish From the Hiland Web site at http://www.hilandpartners.com/index.cfm? id=15
Hiland Partners Bakken Gathering System Location: Richland County, Montana Miles of Pipe: 375 miles of natural gas gathering pipelines Gathering Capacity: 25,000 Mcf/d Processing Capacity: 25,000 Mcf/d Fractionation Capacity: 6,500 Bbls/d Basin/Formation(s): Williston; Bakken From the Hiland Web site at http://www.hilandpartners.com/index.cfm? id=15
Whiting Petroleum Ø Whiting Petroleum is a major independent in the Bakken and has an affiliate that performs a lot of their oil and gas gathering. Ø They do connect others in their area of influence. Whiting Petroleum Corporation Barclay s CEO Energy Conference - September 11, 2013
Whiting and Midstream Whiting Petroleum Corporation Barclay s CEO Energy Conference - September 11, 2013 16
Whiting and Midstream Whiting Petroleum Corporation Barclay s CEO Energy Conference - September 11, 2013 17
Others Ø Targa Badlands Gas Gathering & Processing Ø McKenzie, Dunn and Mountrail counties of North Dakota. Ø 95 miles of natural gas gathering pipelines. Ø 20 MMcf/d plant recently expanded to 40 MMcf/d. Ø Over 100,000 acres dedicated for natural gas gathering. http://www.targaresources.com/operations/gathering-processing/field-gathering-processing http://files.shareholder.com/downloads/ngls/2910756186x0x615536/12921213-0532-4d21- a342-65d69670e9ad/investor_presentation_bakken_shale_acquisition.pdf
Others Ø Petro-Hunt is an owner and the operator of the Little Knife Gas Processing Plant Ø Started in the 1970 s by Gulf Oil Company and acquired by Petro-Hunt in 1992 Ø The plant can process up to 32 million cubic feet of both sweet and sour gas per day. Ø The plant creates end products for sale such as butane, ethane, propane, natural gasoline, Y-grade, elemental sulfur and sweet methane gas. Ø XTO s gas gathering Ø Nesson Gathering System and Plant in Mountrail County ND. From the Petro-Hunt web site; http://www.petro-hunt.com/index.php?option=com_content&view=article&id=58&itemid=65
Most recent map from the NDIC
North of the River
South of the River
Far South of the River
Extreme south of the Basin
Summary Ø Northern Border continues to be a large capacity pipeline that takes away a lot of the Bakken gas. To date Northern Border has been willing and able to blend the rich Bakken gas with lean Canadian gas to meet delivery requirements of downstream pipelines. Ø In May of last year WBI Energy Inc. proposed a natural gas pipeline from far western North Dakota to western Minnesota where it would connect with Viking Gas Transmission Co. s pipeline system. The 400-MMcfd pipeline would increase pipeline takeaway capacity out of the Bakken shale and could be expanded to more than 500 MMcfd. The company expects the pipeline to cost $600-700 million. Ø The Alliance Pipeline Tioga Lateral Pipeline and facilities were commissioned and made available for commercial in-service September 1, 2013. An 80-mile length of 12-inch diameter pipeline from Tioga, North Dakota and ties to the Alliance mainline near Sherwood, North Dakota. The pipeline will provide rich gas transportation infrastructure to move 126.4 million cubic feet (mmcf) of gas per day. Ø In order to lower the btu content of the Bakken gas it is necessary to make use of cryogenic processing plants. All of the new the Aux Sable Plant, the new Oneok Plants, and the new Tioga plant are capable of recovering ethane and the remaining propane in the gas.