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© 2006 Pacific Connector Gas Pipeline LP and Jordan Cove Energy Project, L.P. All rights reserved.
Jordan Cove Energy TerminalandPacific Connector Gas Pipeline
LNG Gateway to Western North America
June 4, 2009
NWGA & NWIGU
© 2006 Pacific Connector Gas Pipeline LP and Jordan Cove Energy Project, L.P. All rights reserved.
Why LNG – Reason #1
The demand for natural gas is greater than what our nation presently produces. 15% of our nation’s natural gas is imported (primarily from Canada), and imports are expected to grow even as we see a short term jump in domestic production.
Canadian production accounts for about 80% of the natural gas used in the Pacific Northwest. Canadian exports to the U.S. could decline 50% by 2015 as their domestic demand increases and domestic production continues to decline(1)
(1) U.S. EIA Canada Outlook May 20082
© 2006 Pacific Connector Gas Pipeline LP and Jordan Cove Energy Project, L.P. All rights reserved.
Why LNG – Reason #2
N.A. Gas drilling rig count has plummeted (1)
May 29, 2009 Recent Peak
U.S Total 703 1606 (Sept. 2008)Canada 39 290 (Jan. 2009)Colorado 45 125 (April 2008)Wyoming 32 83 (Sept. 2008)Utah 13 50 (Aug. 2008)
U.S. levels have not been this low since November 2002 and Canadian activity not since before Jan 1998.
(1) Baker Hughes Weekly Rig Count May 29, 2009
3
© 2006 Pacific Connector Gas Pipeline LP and Jordan Cove Energy Project, L.P. All rights reserved.
Why LNG – Reason #3
LNG offers an alternative natural gas supply at competitive prices and will complement domestic natural gas production.
“ Importing LNG to the U.S. would be economical at an average price as low as $3.50/MMBtu whereas shale gas (the new source of gas responsible for recent domestic production gains) requires an average gas price of at least $6.50/MMBtu to be economical” (1).
(1) Source: Scott Thetford, VP of Pace Global Energy Services
© 2006 Pacific Connector Gas Pipeline LP and Jordan Cove Energy Project, L.P. All rights reserved.
Why LNG – Reason #4
LNG imports are expected to increase substantially, in spite of recent soft demand due to a weak economy.
Demand for natural gas to fuel peak electric generation (summertime) has grown 227% since 1997. (1)
As plans for new coal fired power plants are cancelled (87 in 2007 alone) more natural gas fueled facilities will be built.
Because wind resources have been shown to be available for only 12.5% of the peak demand periods, natural gas will be needed to fill in the remaining 87.5%(2)
(1) EIA, Existing Net Summer Capacity(2) Source: Colorado PUC –Public Service Company of Colorado 2007 Colorado
Resource Plan,
5
© 2006 Pacific Connector Gas Pipeline LP and Jordan Cove Energy Project, L.P. All rights reserved.
LNG Portal to Western North America
6
© 2006 Pacific Connector Gas Pipeline LP and Jordan Cove Energy Project, L.P. All rights reserved.
Jordan Cove LNG Terminal Specifications
7
Jordan Cove LNG Terminal with Roseburg Forest Products facility
on Coos Bay North Spit
Single LNG Marine BerthSeven miles from Coos Bay entranceEstimated 80 LNG carrier calls per year
Send out capacityRegasification of 1 billion cubic feet/day of natural gas
Pipeline interconnectsPacific Connector Gas Pipeline (direct)NW Natural(Coos County indirect)
Electric co-generationIntegrated plant (32 MW) for reliability
© 2006 Pacific Connector Gas Pipeline LP and Jordan Cove Energy Project, L.P. All rights reserved.8
Pacific Connector Pipeline Route & Specifications
234-miles of pipelinePipe is 36-inch in diameterMAOP 1440 psigCompressor Station at Butte Falls in Jackson CountyInterconnects with:
NWP - Grants Pass LateralAvista Distribution System –Shady CoveGTNTuscaroraPG&E Lines 400/401Ruby (if constructed)
s Natural Gas Storage
WASHINGTON
IDAHO
BRITISH COLUMBIA
OREGON
CALIFORNIA
ss
ss
s
PG&E
Tuscarora Gas Transmission
GTN
Northwest Pipeline
Mist
Jackson Prairie
Jordan Cove Energy Project
Malin
Sumas
NEVADAPacific Connector Gas Pipeline
Seattle
Portland
San Francisco
s
s
© 2006 Pacific Connector Gas Pipeline LP and Jordan Cove Energy Project, L.P. All rights reserved.9
Jordan Cove Market Access via Pacific Connector
Access to 68% of west coast market2.2+ Bcf/day of takeaway capacity at Malin Access to 200 Bcf of underground storage
PG&E (CA): 42 Bcf*Wild Goose (CA): 24 Bcf *Lodi (CA): 22 Bcf +12 Bcf *Gill Ranch (CA): 15 BCF *Jackson Prairie (WA): 22 Bcf *MIST (OR): 12 BcfClay Basin (UT): 52 Bcf
s Natural Gas Storage
WASHINGTON
IDAHO
BRITISH COLUMBIA
OREGON
CALIFORNIA
ssss
s
s
s
s
ss
Wild Goose
Los MedanosLodiPleasant Creek
McDonald Island
Line 401Line 400
Line 2Line 401Line 300
PG&E
PG&E
Tuscarora Gas Transmission
GTN
Northwest Pipeline
Mist
Jackson Prairie
Jordan Cove Energy Project
Malin
KingsgateSumas
NEVADA
Pacific Connector
Seattle
Portland
San Francisco
s
s
* In the process of being expanded or proposed
© 2006 Pacific Connector Gas Pipeline LP and Jordan Cove Energy Project, L.P. All rights reserved.
Dynamic Pricing Analysis Underlying Facts
The Jordan Cove LNG and Pacific Connector Gas Pipeline provide 1 BCFD of additional natural gas supply and create the cross-Cascades delivery that is necessary to access a large and liquid market, a “must have” if the Pacific Northwest is to attract long-term LNG supplies.
If the Ruby pipeline is built it could bring an additional 1 BCFD of new gas supplies to the region’s natural gas consumers from the Rockies.
.
© 2006 Pacific Connector Gas Pipeline LP and Jordan Cove Energy Project, L.P. All rights reserved.
Dynamic Pricing Analysis Conclusions
The access of up to 2 BCFD of additional natural gas to the region’s supply base:
Pushes the basis differential between Sumas and Henry Hub downward
Also pushes Henry Hub prices downward as new supply points create greater gas-on-gas competition both regionally and nationwide.
What does this mean to regional natural gas users?.
© 2006 Pacific Connector Gas Pipeline LP and Jordan Cove Energy Project, L.P. All rights reserved.
Dynamic Pricing Analysis Conclusions (1)
© 2006 Pacific Connector Gas Pipeline LP and Jordan Cove Energy Project, L.P. All rights reserved.
Remaining Permitting & Construction Schedule
Application Filed with FERC September 2007 DEIS Issued by FERC August 2008LOR issued by U.S.C.G. April 24, 2009FEIS issued May 1, 2009FERC Certificate decision Summer 2009All local, state & federal permits 2nd quarter 2010
LNG Terminal Construction Start Fall 2010Pipeline Construction Start Spring 2012Commercial Operation Early 2014
© 2006 Pacific Connector Gas Pipeline LP and Jordan Cove Energy Project, L.P. All rights reserved. 14
Strong Partners with Proven Experience
Principal Project Partners
Terminal Contracting Team
© 2006 Pacific Connector Gas Pipeline LP and Jordan Cove Energy Project, L.P. All rights reserved. 15
For more information:
Jordan Cove Energy Project
Bob Braddock (541) [email protected]
Pacific Connector Gas Pipeline
Dan Lattin (801) [email protected]
www.pacificconnectorgp.com
Thank You!