Transcript Slide 1
Permian Basin Overview July 25, 2006 Permian Basin CO2 Pipeline Map Doe Canyon Doe Canyon Unit Cr eek McElmo Dome Unit Guyman Sheep Moutain PL Bravo Dome Tra e nsp PL tco Rose bud PL W Bravo Dome Bravo Dome Unit Bravo PL y Ox av oP PL e in el ip Br P Sheep Mountai n z te or C L Denver City L hP Iris eral Sla ug hte r PL t on An Trinit y Llano Lat ir Ad a PL rs rie ar PL Basin P ee L es tT ex as Centerline PL PL Means Central Lat El Mar PL R an yo n C Pe cos P L kP ree eC ch an m Co Petro 0 12.5 25 50 75 PL fC Central Basin PL Este Wellman PL W Cortez PL Tr in it y mo McEl Sheep Mountain Unit Sheep Mountain McElmo Dome CRC PL L Sou rce PL Val Verde Plants 100 Miles KINDER MORGAN Contact 1-800-247-4122 www.kindermorgan.com How did it Happen? Salt Creek Slaughter Cogdell Wasson Welch Adair New Mexico North Hobbs Seminole Means Unit Texas Mabee Geraldine Ford Permian Basin Circa 1970 Elmar N. Dollarhide S. Cowdan Puckett Plant Mitchell Plant S Cross Yates Grey Ranch Plant Terrell Plant SACROC Salt Creek Slaughter Cogdell Wasson Welch Adair New Mexico North Hobbs Seminole Texas Means Unit Mabee Geraldine Ford Elmar N. Dollarhide S. Cowdan McCamey Permian Basin 1972 Puckett Plant S Cross Mitchell Plant Yates Grey Ranch Plant Southern CRC Terrell Plant SACROC Windfall Profits Tax adopted in 1980 Waterfloods unitized in the 60’s and 70’s had started to decline Owners of Potential EOR Projects aligned with CO2 Source Fields Major Oil Companies operating in Permian Shell, Mobil, ARCO, Exxon, Amoco Shell, Mobil, et al – McElmo Dome ARCO/Exxon – Sheep Mountain Unit Amoco, Hess, et al - Bravo Dome Unit Source Field Unitizations Majors commenced planning and development for their EOR projects Sheep Mountain McElmo Dome Bravo Dome Salt Creek Slaughter Denver Unit Wasson Cogdell Welch Denver City Seminole New Mexico Texas Means Unit Mabee Geraldine Ford Elmar N. Dollarhide S. Cowdan Cordona Lake Permian Basin 1982 - 1989 Puckett Plant McCamey S Cross Mitchell Plant Yates Grey Ranch Plant Southern CRC Terrell Plant SACROC Sheep Mountain Bravo Dome Salt Creek Slaughter Este Cogdell Denver City Welch Sharon Ridge Adair New Mexico Seminole N. Dollarhide Means Unit Reinecke Mabee Geraldine Ford Elmar S. Cowdan Cordona Lake Permian Basin 1990 - 1999 Puckett Plant McCamey S Cross Yates Mitchell Plant Grey Ranch Plant Val Verde Terrell Plant SACROC Sheep Mountain Bravo Dome Este Slaughter Salt Creek Este Cogdell Denver City Welch Sharon Ridge Adair New Mexico North Hobbs Seminole N. Dollarhide Means Unit Reinecke Mabee Geraldine Ford Permian Basin 2000 - 2006 Elmar S. Cowdan Cordona Lake Puckett Plant McCamey S Cross Yates Mitchell Plant Grey Ranch Plant Val Verde Terrell Plant SACROC EOR Projects started in 1983 are still purchasing CO2. Original projections indicated these projects would be on total recycle but HCPV Slugs have steadily increased. Projects such as Denver Unit and Seminole San Andres Unit have been expanded into the Transition Zone and Residual Oil Zone respectively Higher oil prices have justified startup of smaller and/or previously marginal projects Current Denver City CO2 supply from all sources 1,420 MMCFD With oil price increasing, project expansions as well as new projects are justifying expansion of CO2 source fields Kinder Morgan and partners are expanding McElmo Dome Unit by 200 MMCFD and initiating development of Doe Canyon Unit to 100 MMCFD. Kinder Morgan and co-owners are planning expansion of Cortez Pipeline to accommodate SW Colorado source field expansions Expansion and development opportunities also exist in NE New Mexico at Bravo Dome Unit operated by Oxy and West Bravo Dome Unit operated by Hess 1500 1000 500 0 1985 1990 1995 2000 2005 was record year, supplies pro-rated on occasion 2005 How does the Permian Basin success story translate to Wyoming? Supply, Transportation and Demand have to be aligned. The 80’s had the Supply and Demand fields mostly owned by the same companies. It is different today. Must be a win-win proposition for all What is the catalyst for EOR expansion in Wyoming - oil price, emissions regulation, other? CO2-A (emissions) is more expensive to capture and compress than CO2-N is to develop and produce CO2-A is likely to cost $2.00 $2.50/MCF Delivered 6-10 MCF/BBL has been a “rule of thumb” utilization rate for new projects in the Permian Basin End