The Market Outlook for Natural Gas: The Wyoming
Natural Gas Pipeline Authority’s Perspective
Wyoming Geological Association Conference
Prepared: July 26, 2004
Presented: September 1, 2004
Nymex vs Wyoming Prices - 2002
Nymex vs W yoming Prices
2002
10.00
9.00
Price ($/MMBtu)
8.00
7.00
6.00
5.00
4.00
3.00
2.00
CIG 2002
1.00
Nymex 2002
0.00
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Nymex vs Wyoming Prices - 2003
Nymex vs Wyoming Prices
2003
10.00
9.00
8.00
Kern River Online
Price ($/MMBtu)
7.00
6.00
5.00
4.00
3.00
2.00
CIG 2003
Nymex 2003
1.00
0.00
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Gas Facts and Observations
 Wyoming and the Central Rockies have about a ten-year supply of
natural gas for the U.S. (more than 250 Tcf).
 Because of pipeline constraints, it would take about 150 years to
bring this gas supply to market.
 Wyoming and the Central Rockies have more than 20% of the
remaining North American supply, but less than 7% of the U.S.
market.
 Based on the foregoing, Wyoming should export 12 Bcf/d, rather
than the current rate of 4 Bcf/d.
 Other gas supply provinces in North America are mature and are
declining (Canada, Mid-Continent, Texas, & Louisiana).
 Wyoming has the opportunity to gain market, ahead of the
expansion of LNG terminals or development of Alaska pipelines.
Gas Facts and Observations (Continued)
 There are many alliances and benefits to developing this gas
resource:
•
Pipelines will increase their business with new facilities.
•
Producers can market the resources profitably.
•
Consumers will be assured a secure and competitive supply.
•
Wyoming has revenue to run the state.
•
The U.S. benefits from a currently underutilized energy supply.
 The single-most important objective for Wyoming and the country’s
foreseeable energy needs is to build more natural gas pipelines
into Wyoming and the Central Rockies.
 Wyoming legislation provides the tools to plan, finance, build, and
operate natural gas pipelines.
Wyoming Pipeline Authority Resolution
May 2004
Resolution No. 1
By statue, (37-5-103 (a)(iv)), the Wyoming Natural Gas Pipeline Authority
is authorized to “plan, finance, construct, develop, acquire, maintain and operate
within or without the state of Wyoming, pipelines, pumps, storage, and other
attendant facilities and equipment necessary therefore and all other property,
structures, equipment, facilities and works of public improvement necessary or
useful for the accomplishment of the purposes for which the Authority was
created.”
And
By statue, (37-5-103 (a)(xiii)), the Wyoming Natural Gas Pipeline Authority
is authorized to “Do any and all things necessary or proper for the development,
regulation and accomplishment of the purpose of the authority within the
limitations of authority granted by this act.”
Hereby be it resolved that the Wyoming Natural Gas Pipeline
Authority, shall involve itself or intervene as necessary in any and all
matters it deems necessary related to the timely and reasonable
development of natural gas in the state of Wyoming in order that the
Authority accomplishes its goals and statutory responsibilities.
Where is Production
Growing ………………..
……………The Rockies!!!!!
150,000
0.9 bcfd loss
100,000
Production Mcf/mo
Wyoming vs Kansas
250,000
200,000
50,000
0
Jan-04
Jan-03
Jan-02
Jan-01
Jan-00
Jan-99
Jan-98
Jan-97
Jan-96
Jan-95
Jan-94
Jan-93
Jan-92
Jan-91
EIA data
Wyoming vs Oklahoma
250,000
1.9 bcfd loss
Production Mcf/mo
200,000
2.3 bcfd gain
150,000
Oklahoma
100,000
50,000
Wyoming
0
Jan-04
Jan-03
Jan-02
Jan-01
Jan-00
Jan-99
Jan-98
Jan-97
Jan-96
Jan-95
Jan-94
Jan-93
Jan-92
Jan-91
EIA Data
Critical Success Factors For
Resource Development
 Access to Lands in a Timely Manner
 Price
 Timing of Regulatory Approvals
 Gathering System Capacities and Pressures
 Transportation Export Capacity
 Capital Efficiency
 Public Acceptance
Wyoming Natural Gas Pipeline Authority
Proposed Pipeline Projects
 El Paso - Cheyenne Plains Project
 Kinder Morgan - Advantage Pipeline Project
 Kinder Morgan-TransColorado Gas Transmission






Company Expansion
Northern Border Partners, L.P.-Bison Pipeline Project
Williston Basin Interstate Pipeline-Grasslands
Pipeline Expansion
Kern River Gas Transmission Company - Kern River
Pipeline Expansion
Entrega Gas Pipeline, Inc.- Meeker Hub to Cheyenne
Hub
Questar Pipeline – Greasewood Hub to Kanda Hub
Kinder Morgan – Greasewood Hub to Cheyenne Hub
NWP
175,000 MMBtu/day
Kern River/Questar
906,000 MMBtu/day
WBI
80,000 MMBtu/day
Trailblazer/Kinder
Morgan
Wyoming
NWP/TransColorado
125,000 MMBtu/day
CIG/Cheyenne
Plains/Xce
560,0000
MMBtu/dayl
Cost of Limited Infrastructure to
Wyoming
 $130 + million in Federal/State royalties
and severance taxes – 2002.
 $1 million per day in March 2003.
 Stalled investment in development of
mineral resources.
 Limited ability to predict revenues with
certainty.
The Wyoming Pipeline Authority Will
 Promote all industry sponsored and supported




projects.
Proactively promote infrastructure development
within the state and the Rocky Mountain Region.
Promote efficient utilization of existing infrastructure
in a cost effective manner.
Promote development of Wyoming’s mineral
resource base in a systematic, streamlined and
environmentally responsible manner.
Utilize its bonding authority to build or cause to be
built infrastructure projects that will enhance state
netbacks and promote development of a resource
base that is in the nation’s best interests.
Wyoming Natural Gas Pipeline Authority
Work Plan
Goals:
 Reduce price differential for all Wyomingproduced gas to historic levels of $0.50 or
less.
 Increase markets for Wyoming-produced gas
and increase exports from 4 to 6 Bcf/d within
5 years.
Wyoming Legislation
Effective March 6, 2003
 Increase the bonding authority from $250 million to $1 billion




and deletes the 50% cost of the project restriction. The
bonds authorized are revenue bonds and thus no obligation
of the state.
Expands the permissible projects (from natural gas) to
include associated natural resources (carbon dioxide, etc.).
Expands the powers of the WPA to allow it to purchase and
sell capacity in pipelines.
Expands the powers of the WPA to allow it to conduct
hearings to obtain data, identify markets for Wyoming natural
gas, and be an advocate before FERC for new pipeline
capacity.
Specifies that the purpose of the WPA extends to all
Wyoming production, including both the State and Federal
mineral royalties.
Wyoming Legislation
Effective March 6, 2003
(Continued)
 Removes the restriction that bond proceeds not be
expended until construction of a financed pipeline is
completed.
 Increases the bond maturity to maximum of 50 years.
 Makes numerous other amendments suggested by bond
firms to allow greater flexibility to the WPA.
 Provides for permanent staffing of the WPA.
Contact Information
Mark J. Doelger – Chairman
Wyoming Natural Gas Pipeline Authority
225 S. David Street
Casper, WY 82601
Phone: (307) 234-1574
Email: mjdoelgerbh@bresnan.net