Utica and Marcellus Production and Takeaway Capacity

Utica and Marcellus
Production and
Takeaway Capacity
Paul Weissgarber
Senior Vice President, Ohio River Valley
Platts Pipeline and Development Conference
September 17, 2013
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Forward-Looking Statements
This presentation contains forward looking statements within the meaning of the federal securities
laws. Forward looking statements are not guarantees of performance. They involve risks, uncertainties
and assumptions. The future results of Crosstex Energy, L.P. and its affiliates (collectively known as
“Crosstex”) may differ materially from those expressed in the forward-looking statements contained
throughout this presentation and in documents filed with the SEC. Many of the factors that will
determine these results are beyond Crosstex’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 markets conditions; inflation rates; interest rates; the political and economic
stability of oil producing nations; energy markets; weather conditions; business and regulatory or legal
decisions; the pace of deregulation of retail natural gas and electricity; the timing and success of
business development efforts; and other uncertainties. You are cautioned not to put undue reliance on
any forward looking statement. Crosstex has no obligation to publicly update or revise any forward
looking statement, whether as a result of new information, future events or otherwise.
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Crosstex Midstream Services Today
The Midstream Value Chain
A critical part of energy infrastructure
responsible for moving product from wellhead to consumption
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3
The Right Platform:
Diverse Base of Assets
OHIO RIVER VALLEY
Oklahoma
Arkansas
Pennsylvania
Ohio
X
PERMIAN
BASIN
X
West
Virginia
UTICA
Louisiana
HAYNESVILLE &
COTTON
BARNETT
VALLEY
SHALE
AUSTIN CHALK
Texas
MARCELLUS
TUSCALOOSA
MARINE SHALE
X
Processing Plants
MIOCENE/WILCOX
Fractionators
EAGLE
FORD
Pipelines
Crude/Brine Truck Stations
Brine Disposal Wells
Well Positioned in 6 of the Top
Shale / Resource Plays in the U.S.
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X
Rail Terminal
Barge Terminal
Condensate Stabilization
Stations
4
Ohio River Valley Assets:
A Great Platform for Growth
Ohio River Valley Crude Pipeline
Ohio
Pennsylvania
Crude & Brine Truck Stations
Brine Disposal Wells
X
Black Run Rail Terminal
Bells Run Barge Terminal
E2 Condensate Stabilization Stations
Killbuck
Black Run
Sego
Lowell
Bells Run & Eureka
Nutter
Brooksville
West
Virginia
Stockley
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Ohio River Valley Assets:
A Great Platform for Growth
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1
2
Hess/CNX’s Athens A 1H-24
well (Harrison County): Tested
at a peak rate of 1,056 Bbl/d of
condensate, 1,803 Bbl/d of NGL and
10.2 MMcf/d of natural gas
Rex Energy’s Guernsey 2H
3
2 well (Guernsey County): Tested
at a peak rate of 560 Bbl/d of
condensate, 1,213 Bbl/d of NGL and
8.0 MMcf/d of natural gas
3 Antero’s Yontz 1H well
(Monroe County): Tested at a
peak rate of 52 Bbl/d of condensate,
3,177 Bbl/d of NGL and 38.9 MMcf/d
of natural gas
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Antero Utica Well Initial Production Data
Source: Antero Resources
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Condensate Differs Greatly from Crude
Condensate Facts
• Higher gravity oil (>45-50°
API) considered
condensate
• Condensate often has
methane, ethane and
propane components
(NGL’s)
• The natural gasoline
(C5/C6 stream) produced
from natural gas liquids
fractionation plants is
sometimes referred to as
plant condensate
Distillation Comparison
(Percent of Volume)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Condensate
Resid
Louisiana Light
Sweet
Vac Gas Oil
Distillate
West TX
Intermediate
Naphtha
Note for chart: missing fraction is light ends
Source for chart: IHS Purvin & Gertz
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Condensate Differs Throughout the Region
86
78
70
API
Gravity
62
54
46
38
30
0
5
10
Reid Vapor Pressure (RVP)
Source: Crosstex analysis of Ohio River Valley condensate
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15
20
Condensate Volumes Will Exceed Local Demand
Utica Condensate Market
• Local refineries currently have
capacity to serve ~190 wells
(38,000 boepd) condensate
supply; expanding to be able to
serve ~265 wells (53,000
boepd)
• As volumes ramp up in near
term, any additional volumes
over this amount will have to
leave the region
** Source: Crosstex research
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Opportunities & Solutions in the Utica
Opportunities
•
•
•
•
•
•
Utica condensate production forecasts are
bullish, local market will absorb initially
Natural gasoline and condensate will
compete, spillover will leave Ohio
Trucking, rail, and condensate logistics to
start, pipeline to follow when volumes
support
Long term market for purity NGL’s is NOT
the Appalachian market
NGL export solutions will be required
The US Gulf Coast is a logical target market
Solutions
•
•
•
•
•
Leverage existing rail, storage, trucking and
barge assets to clear the liquids market
Provide condensate stabilization services
Become a receiver of Utica NGL export
volumes by rail in south Louisiana
Develop liquids gathering and processing
solutions leveraging position in Ohio
Upgrade pricing by installing and operating
condensate splitter
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Delivering a Full Range of Solutions
Field
Gathering
Stabilizing
Condensate
Solutions
•
•
•
110+ truck fleet
10 pipeline injection stations with storage
Experienced drivers trained in handling condensate
•
Proven, engineered solution for Marcellus/Utica
condensate
16K+ BPD stabilization
Additional 7K BPD stabilization with leading producer
Further plans underway
•
•
•
•
•
•
Engineering work underway for facilities tuned
to Marcellus/Utica condensate
Exploring JV opportunities
Developing markets for splitter products
Transporting
•
•
•
Existing 200+ mile pipeline
20-spot, 24K BPD rail loading facility
Ohio River barge terminal with storage
Marketing
•
•
•
•
Expanded rail market outlet at Black Run terminal
Expanded storage capacity to support market outlets
Optimized barge facility
Developing rail market outlet at Eureka facility
Splitting
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Questions/Inquiries:
[email protected]
214-721-9613
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