Kinder Morgan Cochin - Platts · Kinder Morgan Cochin Summary of Proposed ... Florida 7 3 2 2 4 3 2...

September 24, 2010 1Platt's 5th Annual Pipeline Development & Expansion

Presentation by: Karen S. Kabin

Kinder Morgan Cochin

Summary of Proposed

Marcellus Lateral Project

Karen S. Kabin

713-369-9268 Office

713-806-5634 Cell

[email protected]

Platt's 5th Annual Pipeline Development & Expansion

Presentation by: Karen S. Kabin2September 24, 2010

Forward Looking StatementsThis presentation contains forward looking statements. These forward-looking statements are

identified as any statement that does not relate strictly to historical or current facts. In particular,

statements, express or implied, concerning future actions, conditions or events, future operating

results or the ability to generate revenues, income or cash flow or to make distributions are

forward-looking statements. Forward looking statements are not guarantees of performance.

They involve risks, uncertainties and assumptions. Future actions, conditions or events and

future results of operations of Kinder Morgan Energy Partners, L.P. and Kinder Morgan

Management, LLC may differ materially from those expressed in these forward-looking

statements. Many of the factors that will determine these results are beyond Kinder Morgan's

ability to control or predict. These statements are necessarily based upon various assumptions

involving judgments with respect to the future, including, among others, the ability to achieve

synergies and revenue growth; national, international, regional and local economic, competitive

and regulatory conditions and developments; technological developments; capital and credit

markets conditions; inflation rates; interest rates; the political and economic stability of oil

producing nations; energy markets; weather conditions; environmental conditions; business and

regulatory or legal decisions; the pace of deregulation of retail natural gas and electricity and

certain agricultural products; the timing and success of business development efforts; terrorism;

and other uncertainties. There is no assurance that any of the actions, events or results of the

forward-looking statements will occur, or if any of them do, what impact they will have on our

results of operations or financial condition. Because of these uncertainties, you are cautioned

not to put undue reliance on any forward-looking statement.



KMI / KMP:Unmatched

Footprint

__________________________

(a) Includes NGPL

(b) Excludes ~32 transload facilities

(c) Includes leased capacity

Largest independent transporter of petroleum products in the U.S.

Transport ~1.9 million barrels per day (Bbl/d)

2nd largest transporter of natural gas in U.S. (a)

Own an interest in or operate over 24,000 miles of interstate / intrastate pipeline

Largest provider of contracted natural gas treating services in U.S.

Largest transporter of CO2 in U.S.

Transport ~1.3 Bcf/d of CO2

2nd largest oil producer in Texas

Produce ~56 MBbl/d of crude

Largest independent terminal operator in U.S.

Own an interest in or operate ~180 liquids / dry bulk terminals (b)

~107 million barrels of domestic liquids capacity (c)

Handled ~78 million tons of dry bulk products in 2009

Largest handler ofpetcoke in U.S.

Only Oilsands pipeline serving Vancouver B.C. / Washington state

TMPL transports ~300 MBbl/d to Vancouver / Washington state

PRODUCTS PIPELINESFAYETTEVILLE EXPRESS

PIPELINECO2 PIPELINES PETROLEUM PIPELINES

PRODUCTS PIPELINES

TERMINALSNATURAL GAS STORAGE CO2 OIL FIELDS

PETROLEUM PIPELINES

TERMINALS

TRANSMIX FACILITIES NATURAL GAS PROCESSING CRUDE OIL PIPELINES (2,3,8)INDICATES NUMBER OF

FACILITIES IN AREA

NATURAL GAS PIPELINES GAS TREATERS TERMINALS KM HEADQUARTERS

Pacific

Northern

TransColorado

2Pacific

CALNEV

KMCO2

2

KMTP

KMTejasWink

SACROC

Yates

95 2

32

Plantation

Cypress

4

CentralFlorida

7

3

2

24

3

2

24

3

KMIGT

Trailblazer

2

Cochin

Express

Platte

TransMountain

Claytonville

2

4

KMLP

REX

REX

MEP

2

FEP

JetFuel

Pipeline

2

2

23

22

KinderHawk

2

2

3

Katz

Eagle Ford

ESPL

2



Cochin Pipeline Description 1900-mile common carrier pipeline

Transports propane from Fort Saskatchewan, Alberta to Windsor, Ontario

Sarnia

Whiting/Griffith

Edmonton

Calgary

File: i\mktdata\dean\maps.pre

Mapco West

Benson

Mankato

Regina

Cochin East

Windsor

MilfordNew Hampton

Cochin Pipe Line System

Iowa City

- MAPCO

Carrington

Hobbs

Mount Belvieu

Richardson

Fort Saskatchewan

Clinton

Conway

Kinder Morgan Cochin Pipeline

Existing connections to MAPCO/Enterprise and ONEOK

Potential connections to LyondellBasell crackers, Aux Sable fractionation facility, and Southern Lights origin




Marcellus Lateral Project Objective:Use existing infrastructure to provide cost-

effective NGL transportation solution from

Marcellus to the Sarnia, Ontario market

Sarnia Market:BP fractionator - 120 MBPD C3+ mix

Imperial cracker - 12 MBPD E/P

Nova cracker – 20+ MBPD E/P/B



Benefits of Marcellus Lateral

Lower capital cost lower tariff rate

Faster in-service date

Minimal shipper commitments required

Product flexibility

Access to multiple markets

Expandability



Marcellus Lateral Project Description 248-mile, 12”-16” pipeline lateral connecting to existing Cochin Pipeline

Target in-service date July 2012

25 MBPD, 10 year commitment required for KM to move forward

NGL and/or Ethane service from Marcellus to Windsor

KM / Dome to facilitate the reconnection of the Windsor-Sarnia Pipeline for direct delivery of product to Provident’s Sarnia, Ontario facilities

Tariff rate to Windsor dependent upon firm capacity commitments

9 – 17 cpg proposed in non-binding open season

Total Firm Commitments Initial Rate

25,000 – 29,999 bpd 17 cpg

30,000 – 34,999 bpd 16 cpg

35,000 – 39,999 bpd 15 cpg

40,000 – 49,999 bpd 14 cpg

50,000 – 64,999 bpd 13 cpg

65,000 – 94,999 bpd 12 cpg

95,000 – 124,999 bpd 11 cpg

125,000 – 149,999 bpd 10 cpg

≥150,000 bpd 9 cpg



Houston, PA

(MarkWest)

Mariner - Ethane (50)

El Paso

Ethane (60)

Buckeye

NGL (90-170)

Natrium, WV

(Dominion)

New Martinsville, WV

(Caiman)

REX

Cochin

TEPPCO

Ethane

(75-125)

WSPKM Lateral

NGL (25-150+)

13 day

Barge RT

Baton Rouge, LA

Mt. Belvieu, TX

Map of Proposed Marcellus Projects

Enbridge

NGL (100)



Comparison of Announced ProposalsMixed NGL (Y-Grade)

Buckeye

Union Pipeline

Enbridge

(NGL to Chicago)

Kinder Morgan Cochin


Project

Description

~400 mile new 14-16”

Y-Grade line to Sarnia

~450 miles new pipe;

Y-Grade line to Chicago

250 miles new 12” - 16”;

150 miles existing 12”

Start-up Q4 2012 - Q1 2013 Not Disclosed July 2012

Capacity 90 – 170 MBPD 100 MBPD 25 – 150+ MBPD

Min Commit Not Disclosed Not Disclosed 25 MBPD @ 17 cpg

50 MBPD @ 13 cpg

Products Y-Grade Y-Grade Y-Grade; Ethane

Destinations Sarnia Chicago Windsor / Sarnia

Chicago

Rate 14 – 17 cpg Not Disclosed 9 – 17 cpg to Windsor

Term 15 years Not Disclosed 10 or 15 years

The alternative to the proposed NGL pipeline projects is local fractionation, with purity product sales directly into the local market.



NGL Markets

North East (i.e. Marcellus area) Premium propane market, but with seasonal demand

Limited local ethane, normal butane, & C5+ demand

Sarnia, Ontario Premium NGL market compared to Conway

Existing (currently underutilized) fractionation capacity

Nova & Imperial crackers can ratably consume NGLs year round (32+ MBPD)

Storage available in Windsor, Sarnia, and Marysville

Chicago, Illinois (Mid-Continent) Existing (currently underutilized) fractionation capacity

LyondellBasell crackers can ratably consume ethane year round (60-70 MBPD)

Southern Lights origin point for diluent (C5+) shipments to Western Canada

Storage available in Conway / Bushton

US Gulf Coast No demand for incremental mixed NGL barrels due to limited fractionation capacity

Large ethane demand, but very price sensitive



Houston, PA

(MarkWest)

Mariner - Ethane (50)

El Paso

Ethane (60)

Buckeye

NGL (90-170)

Natrium, WV

(Dominion)

New Martinsville, WV

(Caiman)

REX

Cochin

TEPPCO

Ethane

(75-125)

WSPKM Lateral

NGL (25-150+)

13 day

Marine RT

Baton Rouge, LA

Mt. Belvieu, TX

Map of Proposed Marcellus Projects

Enbridge

NGL (100)



Comparison of Announced ProposalsEthane

MarkWest / Sunoco

Mariner Project

El Paso

TN Gas Reversal

Enterprise*

TEPPCO Reversal

Kinder Morgan

Marcellus Lateral

Project

Description

45 mile new (MW) +

250 mile 8” SXL pipe

+ storage + marine

830 mile reversal +

200 miles new @

Origin / Destination

~600 mile reversal +

744 miles new 10”-12”

@ Origin / Destination

250 miles new 12”-16”;

150 miles existing 12”

Start-up Mid-2012 / Q2 2012 April 1, 2013 Q4 2012 July 2012

Capacity 50 MBPD 60 MBPD 75 – 125 MBPD 25 – 150+ MBPD

Min Commit Not Disclosed 50 MBPD Not Disclosed 25 MBPD @ 17 cpg

50 MBPD @ 13 cpg

Products Ethane Ethane Ethane Y-Grade; Ethane

Destinations Louisiana markets Baton Rouge, LA Mt. Belvieu, TX Sarnia / Chicago

Rate Not Disclosed 18+ cpg 15.5 - 16 cpg 9 – 17 cpg to Windsor

Term Not Disclosed 10 years Not Disclosed 10 or 15 years

Ethane Markets

US Gulf Coast (Mt. Belvieu, TX & Louisiana) Large ethane demand, but sensitive to price (60-120 MBPD LA; 800+ MBPD USGC)

Sarnia, Ontario Closest ethane market to Marcellus production, but limited demand (32+ MBPD)

Chicago Secondary ethane market (60-70 MBPD); accessible by Cochin from Marcellus; lower price basis

*Source: BENTEK Energy, LLC



Summary Kinder Morgan believes its proposed Cochin Marcellus Lateral is the

most economical solution for Marcellus NGL transportation to nearby markets

Lower capital cost lower tariff rate250 miles new / 150 miles existing; Proposed rate of 9 – 17 cpg

Faster in-service dateJuly 2012 start-up

Minimal shipper commitments required25 MBPD, 10 year term

Product flexibilityMixed NGLs (“Y-Grade”) and/or purity products, such as ethane

Access to multiple marketsWindsor/Sarnia and Chicago

ExpandabilityCapacity can be cost-effectively scaled to over 150 MBPD

Karen S. Kabin

Sr. Account Manager – Business Development

Cochin Pipeline / Marcellus Lateral

713-369-9268 Office

713-806-5634 Cell

[email protected]

Website: www.kindermorgan.com/business/products_pipelines/cochin.cfm

Kinder Morgan Cochin - Platts · Kinder Morgan Cochin Summary of Proposed ... Florida 7 3 2 2 4 3 2...

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