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Taking Advantage of Value Added Upgrading Opportunities in Alberta: What’s in Store for Midstreamers?
Midstream 2007Telus Convention Center CalgaryApril 16, 2007
Tim StauftExecutive Vice President,Aux Sable Canada
Slide 2
Outline
1. Introduction – Who is Aux Sable
2. Industry Environment
3. Midstream Opportunities
4. ASC Projects
5. Risks/Challenges
6. Conclusions
Slide 3
Who Is Aux Sable?
� Aux Sable U.S. owns and operates a 2.1 bcf/d world scale extraction/frac plant at terminus of Alliance Pipeline (Channahon, IL)
� Aux Sable Canada performs supply function for Aux Sable U.S. (Channahon) plant and is developing a fee-based energy processing infrastructure business primarily in Alberta
� First Canadian offgas project for BA Heartland Upgrader is under construction
� Evaluating/developing other Fort Saskatchewan projects� Offgas processing/fractionation facilities
� Fort Saskatchewan ethane extraction plant
� Aux Sable companies are both private companies and are owned by Enbridge, Fort Chicago, and Williams
Slide 4
Aux Sable U.S. Channahon Plant
Slide 5
0
2
4
6
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Tcf
Residential demand Commercial demand Other Alberta demand Alberta gas removals
actual forecast
Total Alberta marketable gas production and demand
24% 25% 27% 35% 42%
Industry Environment
Source: EUB applications and public data
Slide 6
Industry Environment
Source: CAPP
Canadian natural gas production forecast
Slide 7
0.00
0.25
0.50
0.75
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Tcf
Alberta Coalbed methane production forecast
Industry Environment
Source: EUB applications and public data
Slide 8
Midstream Opportunities
Source: CAPP
Canadian Oil Production
Slide 9
Midstream Opportunities
Source: CAPP
Oil Sands Projects
Slide 10
Liquids Potential from Central Upgraders
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
2008 2009 2010 2011 2012 2013 2014 2015
Liqu
ids
(bbl
/d)
-
100
200
300
400
500
600
Off
gas
(m
mcf
/d)
Entrained Liquids (bbl/d) Off-Gas Volumes (mmcf/d)
Source: EUB applications and public data
Slide 11
SHELL
SHELL?
TOTAL S.A.
TOTAL S.A.
DOW
BP
KEYERA
PRIVATE
PRIVATE
ENBRIDGE
OXY VINYL
ATCO
PRIVATE
PROVIDENT/ WILLIAMS
Alliance Pipeline
Heartland Pipelines
PETRO-CANADA
AUX SABLE
NORTHWEST UPGRADING & SYNENCO (< 2 km)
ENBRIDGE
ASC Projects
Slide 12
� Heartland upgrader offgas 15 mmcf/d� 2200 bbl/d of C2 (40% ethylene)� 2000 bbl/d of C3+
� Startup in Q3/Q4 2008
� C2/C2= to local ethane buyer
� C3+ to export markets
� Residue gas returned to BA
� All regulatory approvals received
� Equipment ordered, construction in spring/summer 2007
Heartland Offgas Project
Slide 13
Proposed Fort Saskatchewan Extraction Plant
� Process Alliance Pipeline gas at Fort Saskatchewan
� Capacity 1.2 bcf/d
� Ethane recovery
� ~85% ethane extraction
� ~35 mb/d of purity ethane
� Reinject C3+ for recovery at Channahon plant
� Land on Alliance right of way purchased
� Located adjacent to Dow and Shell
Slide 14
Risks/Challenges
� IEEP Implementation?
� CBM Impacts/WCSB Decline
� Cost Environment
� Timing on Oil Sands Development
� Income Trust Taxation Changes?
� Development of open access Alberta Hub
Slide 15
� Many Opportunities, however, may be challenging to implement
� Existing conventional gas infrastructure modifications likely involve volume risk mitigation
� May see rationalization of some existing plants
� IEEP Program will assist in investment decisions
Conclusions
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