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North American Oil and Gas Pipelines: Redrawing the Map Stephen J.J. Letwin Executive Vice President Stephen J.J. Letwin Executive Vice President 27 th.

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Presentation on theme: "North American Oil and Gas Pipelines: Redrawing the Map Stephen J.J. Letwin Executive Vice President Stephen J.J. Letwin Executive Vice President 27 th."— Presentation transcript:

1 North American Oil and Gas Pipelines: Redrawing the Map Stephen J.J. Letwin Executive Vice President Stephen J.J. Letwin Executive Vice President 27 th USAEE/IAEE North American Conference September 16 – 19, th USAEE/IAEE North American Conference September 16 – 19, 2007

2 2 Agenda Enbridge Overview Crude Oil Pipeline Story Natural Gas Pipeline Story New Pipeline Construction Risks

3 3 Wood River Spain Energy Delivery Liquids and Natural Gas Ottawa Saint John Kansas City Superior Clearbrook Zama Fort McMurray Montreal Toronto Buffalo Regina Hardisty Patoka Casper Salt Lake City Houston Toledo Edmonton Norman Wells Fort St. John Cushing Inuvik El Dorado Sarnia Chicago Gas Distribution Liquids Pipelines Gas Pipelines Seattle Portland OCENSA Bogotá Covenas Liquids pipelines Gas Pipelines Gas Distribution Gathering & Processing Wind Power International

4 4 Crude Oil Pipline Story

5 5 North American Crude Oil Pipelines

6 6 Historical Flow Pattern

7 7 Western Canadian Oil Production Market Unconstrained Case Conventional Light Synthetic Light Raw Bitumen Conventional Heavy Pentanes Plus Synthetic Heavy Forecast Historical 2007 Potential 2007 CAPP Pipeline Planning Case

8 8 Future Flow Pattern

9 9 Liquids Strategy Broadening Market Access Cushing Montreal Toronto Hardisty Wood River Catlettsburg Casper Mandan Salt Lake City Sinclair Cheyenne Denver McPherson Ponca City Tulsa El Dorado Coffeyville Ardmore Memphis Billings Great Falls Toledo Detroit Chicago Robinson Corpus Christi Houston Port Arthur New Orleans Lake Charles Texas City Freeport Puget Sound San Francisco Bakersfield Los Angeles Borger/Sunray Artesia El Paso Big Spring St. Paul Lima Buffalo Canadian Supplied No/Limited Cdn Supply Enbridge/Lakehead System Other Pipelines Refineries: Tanker Port Zama Norman Wells Fort McMurray Edmonton Canton Superior Clearbrook Patoka

10 10 Montreal Toronto Gretna Regina Hardisty Kerrobert Cromer Superior Toledo Sarnia Buffalo Edmonton Lockport Cushing Houston Exxon Mobil Capline Lima Canton Catlettsburg Beaumont Corsicana Mid Valley Detroit Patoka Chicago Casper SPEARHEAD Liquids Strategy Major Projects Proceeding Clearbrook Major Projects ProceedingCostIn-Service Contract Terminaling Hardisty (Upstream)$ 0.4B2008 Stonefell (Upstream)$ 0.1B2008 Cushing (Downstream)$ 0.1B2007 Other$ 0.2B Regional Infrastructure Athabasca$ 0.2B2007 Waupisoo$ 0.5B2008 Southern Access Expansion$ 2.2B Extension$ 0.4B2009 Spearhead Expansion$ 0.1B2009 Alberta Clipper$ 2.9B2010 Southern Lights$ 1.4B2010 Line 4$ 0.3B2008 Total Capital$ 8.8B Regional Infrastructure SOUTHERN LIGHTS REVERSED LINE 13 SOUTHERN LIGHTS LIGHT SOUR CRUDE (new construction) SOUTHERN LIGHTS (new construction) Flanagan Wood River Enbridge Liquids System Alberta Clipper Southern Access Extension Southern Access Spearhead Expansion Contract Terminaling Fort McMurray Contract Terminaling

11 11 Natural Gas Pipeline Story

12 12 North American Gas Pipelines

13 13 LNG Natural Gas Supply Changes LNG WCSB Rockies Midcon/ Permian Appalachia GOM Alaska Mackenzie Increased Flow Decreased Flow Supply Increase Supply Decrease Increased LNG

14 14 Gas Pipelines Proposed/Under Construction Rocky Mountain Express Midcontinent Express Ozark Express Gulf Grossing Clarity Others

15 15 Enbridge Inc. Pipelines Gas Distribution Enbridge Energy Partners Enbridge Income Fund Potential Projects Sarnia Edmonton Fort St. John Chicago Houston Toronto Quebec City Gas Strategy Asset Positioning Inuvik Alliance Pipeline Mackenzie Delta Alaska Pipeline Vector Pipeline New Orleans Rabaska Kansas City East Texas Expansion Neptune Shenzi Gas Storage LNG

16 16 Pipeline Project Risk

17 17 North American Pipeline Construction Potential Pipeline Requirements* * Estimate as of Jan 07

18 18 New Pipeline Project Risks Supply/Demand Construction costs Environment Competition Regulatory Operating

19 19 Supply: Drilling Linked to Pricing

20 20 Future supply linked to continued drilling

21 21 Construction Pressures Steel –High Chinese Demand Pipe Mill Space –3,200 miles/year capacity for 24+ Lay Costs –Only 25 Spreads available Right of Way –Higher congestion, more vocal opposition Workforce –Retiring skilled labor not being replaced

22 22 Risk Strategies Strong project management Joint Ventures Long term agreements Take or Pay Contracts Legislative stability

23 North American Oil and Gas Pipelines: Redrawing the Map Stephen J.J. Letwin Executive Vice President Gas Transportation & international Stephen J.J. Letwin Executive Vice President Gas Transportation & international


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