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Bill Waldheim Business Unit President November 3, 2011

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PFAA – 18 th Annual Conference NGL Infrastructure Back to the Future. Bill Waldheim Business Unit President November 3, 2011. NGL Infrastructure. 1985. 1955. NGL Infrastructure. Doc Brown. Einstein. Flux Capacitor. NGL Infrastructure. DeLorean. 1981. NGL Infrastructure.

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PFAA – 18th Annual Conference

NGL Infrastructure

Back to the Future

Bill WaldheimBusiness Unit President

November 3, 2011

ngl infrastructure3
NGL Infrastructure

Doc Brown


Flux Capacitor

ngl infrastructure4
NGL Infrastructure



ngl infrastructure5
NGL Infrastructure

What musician or band wrote the soundtrack for the original movie?

Huey Lewis and the News!

back in time 1990 s 2000 s
Back in Time – 1990’s-2000’s




Gulf Coast




  • A period of declining domestic crude oil production and uncertain gas production
gas evolution timeline
Gas Evolution Timeline

Infrastructure Build



Supply Build

Demand Build


  • More capacity than needed
  • Repurpose lines
  • Marcellus displacement
  • REX - Rockies & MidCont to East Coast
  • Gulf Stream - Gulf Coast to Florida
  • Expanding of Transwestern, El Paso & Questar
  • Maritimes
  • Portland Natural Gas Pipeline
  • Expansion of Texas Intrastate Pipeline infrastructure
  • Shift in power generation & industrial loads to gas
  • PetChem industry relied on heavier (Naptha) feeds
  • Rising demand for plastic & packaging materials
  • Viewed as environmentally friendly energy source
  • Deregulate natural gas industry
  • Conventional / Tight Sands Drilling
  • Rising natural gas prices
  • NGPA pricing incentives
  • More than 20,000 miles of natural gas transmission pipelines were placed in service in the US over the past 10 years
historical gas infrastructure constraints
Historical Gas Infrastructure Constraints

West to East Flows



Production Growth Areas

Move East

Capacity Constraints

  • High gas production with capacity bottlenecks to move gas to market
gas infrastructure
Gas Infrastructure

West to East Bottleneck

  • Gas Infrastructure proposals to alleviate capacity constraints
gas basis spreads
Gas Basis Spreads
  • Natural Gas basis spreads narrowed with Gas infrastructure build out
2000 s forward
2000’s forward
  • Drilling shifts to liquids rich areas, driving growth in NGL supply
increased ngl supply
Increased NGL Supply


  • New rich shale gas driving the need for additional NGL Infrastructure
ngl infrastructure constraints
NGL Infrastructure Constraints


Wet Gas Fairway

Capacity Constraints


  • NGL evolution is beginning similar to Gas. High NGL production with capacity constraints to move to market
proposed ngl infrastructure
Proposed NGL Infrastructure
  • Additional access to Mt. Belvieu expected to drive a tightening in Conway/Belvieu basis spreads
dcp midstream s ngl projects
DCP Midstream’s NGL Projects
  • Providing customers with NGL transportation services
basis spreads
Basis Spreads


  • Expect basis spreads to narrow with additional pipeline infrastructure build
ngl evolution timeline
NGL Evolution Timeline



Infrastructure Build

Supply Build

Demand Build


  • What’s next?
  • Narrow basis spreads
  • Operational improvements
  • Extra capacity to handle outages and turnarounds
  • Reverse flow on NGL Lines
  • Repurposing
  • Mapco
  • Seminole
  • Chevron
  • Oneok - OPPL
  • Southern Hills
  • Oneok - Sterling
  • Sand Hills
  • MEPS
  • Vantage Pipeline
  • Lone Star West Texas Pipeline
  • Texas Express Pipeline
  • Shift from to gas fired power generation
  • Petrochemical companies incentives to convert to lighter feed stocks
  • Increased consumer demand for plastics and packaging materials
  • Emerging Shale pays
  • New horizontal drilling technology
  • Gas to crude ratios
  • Infrastructure needed to meet production and demand growth
evolution timeline
Evolution Timeline
  • The NGL market development cycle is evolving similar to gas, just later in time.