Northeast Gas Association
Pre-Winter Briefing 2012 / 2013
Tennessee Gas Pipeline Co. L.L.C.
Dodson Skipworth
Account Director, Northeast
December 3, 2012
1
Tennessee Gas Pipeline
Tennessee Gas Pipeline
Forward-Looking Statements / Non-GAAP Financial
Measures
•
This 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 or pay dividends 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., Kinder
Morgan Management, LLC, El Paso Pipeline Partners, L.P., and Kinder Morgan, Inc. 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.
•
We use non-generally accepted accounting principles (“non-GAAP”) financial measures in this presentation, and
our reconciliations of non-GAAP financial measures to our GAAP financial statements are on our website, at
www.kindermorgan.com. These non-GAAP measures should not be considered an alternative to GAAP financial
measures.
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Tennessee Gas Pipeline
Tennessee Gas Pipeline
Agenda
• TGP Dynamics, Recent Trends
• Key points Winter 2012/2013
• Power Generation Market Awareness
• TGP Market Development Activities
3
Tennessee Gas Pipeline
Tennessee Gas Pipeline
Tennessee Gas Pipeline (TGP)
•
•
•
•
•
13,800 Miles of Pipeline
~1,400,000 HP Compression
90 Bcf Storage capacity
12 Bcf Linepack capacity
Connected to all major shale sources
o Northeast: Marcellus, Utica
o All major Eastern markets
Canada
New
England
Utica Shale Gas
Production
Marcellus Shale Gas
Production
Southeast
Haynesville Shale Gas
Production
EagleFord Shale Gas
Production
4
Mexico
LNG
Export
Tennessee Gas Pipeline
Tennessee Gas Pipeline
Northeast Market Area: Source/Flow
Eastern
Canada
LNG
Marcellus
Supply
REX, GoM,
TX , Utica
Not to scale
• Marcellus production dominates
• Ontario exports
• LNG imports declining
Tennessee Gas Pipeline
Tennessee Gas Pipeline
Demand Growth:
Increased Throughput on TGP
TGP Throughput
 2012 thru August ~7.23 Bcf/d
 Delivered 99.2% of all firm in-path gas daily
 18% over 2011
 Power generation drives load growth
6
Market Area Supply Analysis
Winter Period (November – March)
Average Dth/d
2,800,000
2,600,000
2,400,000
2,200,000
2,000,000
1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
Station 219
2007-2008
Niagara (TGP)
Shelton
2008-2009
Wright
2009-2010
Dracut
Distrigas
2010-2011
Stagecoach
2011-2012
Marcellus
REX
2,500,000
Jan-09
Feb-09
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
Apr-10
May-10
Jun-10
Jul-10
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Tennessee Gas Pipeline
Tennessee Gas Pipeline
Tennessee Gas Pipeline – Marcellus Receipts
Marcellus Avg Day Flows (Dth)
Thru November 2012
2,000,000
1,500,000
1,000,000
500,000
0
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Tennessee Gas Pipeline
Tennessee Gas Pipeline
Winter 2012 / 2013
• TGP sees very high loads throughout winter season in Northeast markets
•Recent expansions in service, flowing
•Gas price advantages
•Limited economic recovery
•Compression horsepower utilization high
• Interruptible services of various types and levels are, and will be, interrupted
•Primary Firm in-path reliability not to be jeopardized
• TGP will closely monitor imbalances continuously
•Aggressive linepack management employed
• Shippers’ gas in storage in good shape
• Planned operational maintenance schedules managed, complete
•Compression horsepower utilization high
•Significant scheduled maintenance over Summer, Fall periods
•Hurricanes Isaac & Sandy damage minor. Industry communication / coordination excellent
• TGP posts all necessary information daily: communication critical
Tennessee Gas Pipeline
Tennessee Gas Pipeline
Restrictions of Various interruptible Services: Summer Period Northeast
April – October: % Days
Locations
Description
2010
2011
2012
Comp. Station #245
W. Winfield NY flowing
all points east
22%
79%
94%
Comp. Station #315
Wellsboro, PA flowing
west, south
0%
99%
100%
Comp. Station 321/
325
Eastern PA/NJ headed
east to NJ,NYC
12%
73%
0%
Valve Location 355
Suffield, CT to NE
markets
6%
81%
74%
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Tennessee Gas Pipeline
Tennessee Gas Pipeline
Restrictions of Various interruptible Services: Winter Period
Northeast
Percent Days Restricted (Nov – Mar)
Locations
Description
2009/2010
2010/2011
2011/2012
Comp. Station #224
Clymer, NY flowing
north NY upstate, NE
0%
28%
30%
Comp. Station #245
W. Winfield NY
flowing all points east
42%
96%
99%
Comp. Station #315
Wellsboro, PA flowing
west, south
0%
25%
91%
Comp. Station #321
Eastern PA flowing
east
38%
48%
9%
Comp. Station #325
NW NJ east to
NJ,NYC, SW CT
0%
87%
7%
Valve Location 355
Suffield, CT to NE
markets
0%
28%
30%
* Dramatic reduction in restrictions post 300 Line Expansion placed in service Nov, 2011
Tennessee Gas Pipeline
Tennessee Gas Pipeline
Northeast Generation Direct Tennessee
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Tennessee Gas Pipeline
Tennessee Gas Pipeline
TGP Power Generation Volumes Northeast
Winter
500,000
Summer
600,000
450,000
500,000
400,000
350,000
400,000
300,000
300,000
250,000
200,000
200,000
150,000
100,000
100,000
50,000
0
0
09/10
10/11
09
11/12
10
11
ISONE Market Plants
NYISO Market Plants
800,000
140,000
700,000
120,000
600,000
100,000
80,000
Burn
60,000
Plant MDQ
40,000
500,000
Burn
400,000
Plant MDQ
300,000
200,000
20,000
100,000
-
Total Potential Burn:
Total Plant Firm:
385,000 Dth/d
85,000 Dth/d
Total Potential Burn:
Total Plant Firm:
707,000 Dth/d
175,000 Dth/d
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Tennessee Gas Pipeline
Tennessee Gas Pipeline
TGP Advantage:
Unmatched Access to Marcellus
Marcellus Receipts by Pipeline
TGP Marcellus Access
UTICA
MARCELLUS
Marcellus Shale




8.9 Bcf/d – Receipt access
38 Producer Interconnections
2.3 Bcf/d – Avg. Daily Receipts (Aug)
~1.0 Bcf/d receipt access added in 2012

Indicative of continued growth
Pipeline
% of
Total
YTD 2012
(MDth/d)
TGP
43%
2,360
Transco
18%
982
Stagecoach
8%
413
TETCO
7%
401
Dominion
6%
352
Columbia Gas
6%
333
Equitrans
4%
224
National Fuel
3%
168
Millennium
2%
129
National Fuel Prod
2%
109
TOTAL
100%
5,470
Source: Bentek
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Tennessee Gas Pipeline
Tennessee Gas Pipeline
TGP – Recent Northeast Development
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•
•
•
~ $1.3Billion Capital
Fully Subscribed
In Service, On Time
Development Continues
Capacity
(MDth/d)
Shippers
In-Service
Status
300L Project
350,000
EQT Energy
Nov 1, 2011
In Service
NSD
250,000
Cabot, Seneca, Anadarko,
Mitsui
Nov 1, 2012
In Service
Northampton
10,400
Berkshire, Bay State
Nov 1, 2012
In Service
MPP Project
240,000
Chesapeake, Southwestern
Nov 1, 2013
FERC Order received , On Schedule
NE Upgrade
636,000
Chesapeake, Statoil
Nov 1, 2013
FERC Order received , On Schedule
Rose Lake
230,000
South Jersey Res., Statoil
Nov. 1. 2014
FERC Filing pending, On Schedule
Northeast
Expansion
Up to 1.2 Bcf
In Active Development
TBD 2016 - 2018
In Active Development
Project
Tennessee Gas Pipeline
Tennessee Gas Pipeline
TGP Northeast Expansion – Bullet Line
Wright
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Project Scope
 1.2 Bcf/d pipeline
 Wright or upstream to:
 Dracut MA and;
 Backhaul existing markets
 3rd pipeline into region
• Benefits all existing markets
• Enhances existing system
• Development of new markets
 High pressure line
 Expandable
 In service 2017-2018
Tennessee Gas Pipeline
Tennessee Gas Pipeline
TGP Northeast Expansion – 200 Line Looping
Project Scope



Wright
Dracut


17
Lower volume scale
• 0.5 to 1.0 Bcf/d
Current gas infrastructure
located in TGP corridor
Increases deliverability
Flexibility in design
In service 2016-2018
Tennessee Gas Pipeline
Tennessee Gas Pipeline
TGP Northeast Expansion
Key Commercial Terms
Receipt Point
Wright NY, upstream
Delivery Points
(1) Power Plants and LDCs on TGP’s 200 line,
(2) Existing pipeline interconnects
Supply Access
TGP, Constitution, IGT
Volume
500 – 1,200 MDth/day
Term
15 - 20 years
Rate Structure
Negotiated, Fixed Rate
Indicative Rate
Discussions underway
In-Service Date
November 2016 - 2018
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Tennessee Gas Pipeline
Tennessee Gas Pipeline
Tennessee In The Heart of Utica Shale
TGP Utica development
ongoing: ~ 2.5 Bcf/d
supply liquidity
Multiple lines thru supplyrich area
UTICA
Direct access to liquid
pooling points
Access to growing
markets
Rich gas solutions
underway
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Northeast Gas Association
Pre-Winter Briefing 2012 / 2013
Tennessee Gas Pipeline Co. L.L.C.
Dodson Skipworth
Account Director, Northeast
December 3, 2012
20