MIDSTREAM METHODS: TRANSPORTATION & INFRASTRUCTURE SCOTT HALLAM, MANAGER DEVELOPMENT AND OPERATIONS
TOPICS About Access & the Midstream Industry Utica Shale Bridging the Gap Through Partnerships Financial Impacts Supply Chain and Service Providers
ABOUT ACCESS
ABOUT THE MIDSTREAM INDUSTRY A midstream business gathers, processes and transports natural gas and natural gas liquids (NGLs) from the wellhead to the companies that market the gas and NGLs to the public.
This process includes: • • • •
Gathering Compression Dehydration Conditioning
Gas treating (CO2/H2S removal) Gas processing (NGL separation) •
Fractionation
WHY THE UTICA SHALE?
Image courtesy of the USGS
PRODUCERS TAKE NOTICE
CHALLENGES
Lack of infrastructure • Processing plants • Pipeline • Compression facilities
Rich gas Securing pipeline rightof-way
“You can bring [gas and oil] out of the ground, but it doesn’t do you any good until you can move it and get it processed and get it where it’s needed … Midstream is the key.” Terry Fleming, executive director, Ohio Petroleum Council (Akron Beacon Journal, 12/8/12)
BRIDGING THE GAP THROUGH PARTNERSHIPS
• • •
CARDINAL GAS SERVICES (CGS) UTICA EAST OHIO (UEO) UTICA GAS SERVICES (UGS)
ACCESS IN THE UTICA – GATHERING Mission •
Services
Gas Gathering Systems
Gathering, Compression, Dehydration 5
Miles of Pipeline
71 (114 miles under construction)
Gas Gathered
92 million cubic feet per day (MMcf/d)
Ownership
Access: 66%, Operator TOTAL: 25% EnerVest: 9%
Develop the gathering assets necessary to transport and condition gas for downstream processing markets
Market • • • • •
DTI Hastings Processing Plant DTI Natrium Processing Plant Williams Ft. Beeler Processing Plant Mark West Harrison Processing Plant UEO Cryogenic and Fractionation Plants
Plan • • • •
625 miles of gathering pipeline infrastructure Eight (8) compressor stations Liquid handling facility (large-scale stabilization facility) Design throughput: 1.3 billion cubic feet (Bcf) of natural gas
ACCESS IN THE UTICA – COMPRESSION A compressor is a mechanical
device used to increase the pressure of the gas. Access is currently constructing four Compression Facilities in Ohio: • Augusta CF • Archer CF • Kilgore CF • Scio CF
ACCESS IN THE UTICA – PROCESSING
Current Status Processing Plants
Under Construction 800 MMcf/d
Fractionation
135,000 Bbl/d (C2+)
NGL Storage
870,000 Bbls
Delivery Points
Ownership
Propane: 450,000 Bbls Butane: 300,000 Bbls Natural Gasoline: 120,000 Bbls
2 Residue Gas delivery points 2 NGL delivery points Access: 49% Momentum: 30% EnerVest: 21%
ACCESS IN THE UTICA – GATHERING Mission •
Services
Gathering, Compression, Dehydration
Gas Gathering Systems
3
Miles of Pipeline
8
Gas Gathered
10 MMcf/d
Ownership
100% Access owned and operated
Provide gathering services for the dry gas and oil window outside of the Cardinal Gas Services dedication area. Also, operator of Cardinal Gas Services’ assets and the UEO 24” spine.
Market • • •
DTI TL-400 DEO TPL 5 DEO dry gas gathering systems
Plan • • •
368 miles of gathering pipeline infrastructure Six (6) compressor stations Design throughput: 1.1 Bcf/d natural gas
ENTITY INTERACTION Cardinal Gas Service
Utica East Ohio > Interstate Pipeline > Burner Tip
Processing Well
Comp
Well Well
Well Well
Comp
Fractionation
> Interstate Pipeline > Burner Tip
Well > Pure Product
PARTNERSHIPS IN ACTION
PARTNERSHIPS IN ACTION
PARTNERSHIP BENEFITS Magnitude of acreage position requires focused midstream effort • •
Large-scale design and long-term view Capture economies of scale
Producer partner and midstream partner work together to reduce the development “lag” • Build assets for “just-in-time” service
Project gains first mover advantage Volume aggregation drives development of downstream infrastructure • •
Residue/NGL takeaway Marketing leverage
Future customers benefit • •
Timeline Infrastructure scale and capabilities
PARTNERSHIP CHALLENGES Midstream companies and producers
must have alignment Producer wears two hats Confidentiality Producers are actively acquiring acreage Producers are utilizing proprietary completion techniques
FINANCIAL IMPACTS
THE UTICA’S FINANCIAL IMPACT Capital: •
Access’ planned investment, through its partnerships, is more than $1.8 billion over the next five years
Jobs: • • • •
Currently, the estimated number of local jobs created for Ohioans in the Utica is 636 Today, more than half of the Access Midstream employees in the Utica are Ohio residents Of the 128 employees in our Canton office, 74 are on the Ohio tax rolls Of the 636 contractors working on our projects, half are union and half are open shops
PUTTING THE PIECES TOGETHER SUPPLY CHAIN & SERVICE PROVIDERS
WHAT IS SUPPLY CHAIN MANAGEMENT
SUPPLY CHAIN What we look at for materials and service providers: • •
Materials: specifications, lead time Services: qualifications, environment health & safety (EHS) performance, capacity, past performance, pricing
Competitive bidding process: • • •
Firm, fixed price Unit-based price Bidders’ qualifications, EHS performance/record, capacity and past performance are also evaluated
Vendors can be: • • •
Local Regional National
ACMP VENDOR CONTACT LINE: 877-413-1023, OR VENDOR@ACCESSMIDSTREAM.COM
TYPES OF SERVICE PROVIDERS Inspectors Biologists Right-of-Way (ROW) brokers Operators Laborers Engineers Arborists Mechanics Surveyors Chemists Construction specialists
ACMP VENDOR CONTACT LINE: 877-413-1023, OR VENDOR@ACCESSMIDSTREAM.COM
WHO ACCESS IS WORKING WITH Today, Access is working with the following local service providers: • • • • • • • • • • •
Hilscher Clark Bill Hawk Welded Construction Acuren Inspection Mid-Ohio Pipeline Integrity Kokosing Beaver Construction Hodge Construction Grae-Con HPE Fabrication Canton Erectors
ACMP VENDOR CONTACT LINE: 877-413-1023, OR VENDOR@ACCESSMIDSTREAM.COM
QUESTIONS? SCOTT HALLAM, MANAGER, DEVELOPMENT AND OPERATIONS– UTICA ACCESS MIDSTREAM