Energy and commodity price benchmarking and market insights

Transcription

1 Energy and cmmdity price benchmarking and market insights Lndn, Hustn, Washingtn, New Yrk, Prtland, Calgary, Santiag, Bgta, Ri de Janeir, Singapre, Beijing, Tky, Sydney, Dubai, Mscw, Astana, Kiev, Prt and Jhannesburg

2 Nrth American Crude Transprtatin San Antni, TX Mark Babineck 7 March 2013

3 Agenda Argus backgrund. Tanker cars. Intermdal cst analysis. Case Study: Grays Harbr, Washingtn. Argus Petrleum Transprtatin. Questins.

4 Wh is Argus? Reprt prices in all wrld markets fr: Crude. Refined prducts. NGL & LPG. Cal and cke. Gas & Pwer. Petrchemicals. Fertilizers. Emissins. Mre than 500 staff glbally with numerus ffices Rapid grwth in spt and term cntract indexatin, swaps market indexatin.

5 Why Argus? Argus is nw a standard benchmark fr: US dmestic and imprt crude. US gasline, diesel, and jet fuel. Argus reprts markets the way they trade, thrughut the entire trading day. Argus Sur Crude Index (ASCI). Used t price lng-haul and shrt-haul freign crudes. Argus LLS. Used t price Bakken and Eagle Frd.

6 Tanker cars

7 Nrth American tank car backlg Industry estimates tank car backlg is mre than 48,000. Petrleum is the driver: American Railcar Industries estimates 87pc f ttal industry backlg cmes frm petrleum tank cars and hpper cars that can carry fracturing sand t hrizntal drilling sites. Railcar makers ramping up t meet demand. Rates have mre than dubled cmpared with Ethanl cars cntinue switching t crude service; unclear when/if they will return.

8 Railcar manufacturer trends Argus assesses shrt-term leases n nn-pressurized, full-serve cars at $3,250/mnth as f March. illuminating the markets

9 General-service tank cars can be pressurized r nnpressurized, and can be leased n a full-serve r railcar-nly basis. Argus assesses all types by cntract term.

10 Tank car types Pressurized tank cars. Carry LPG. Can cst less because demand is lwer. Nn-pressurized tank cars. Carry crude il, ethanl. Can mve frm ne service t the ther after cleaning. Are in high demand. Full-serve includes maintenance, repair csts. Railcar-nly leases leave shippers liable fr maintenance and repairs. Argus assesses rail rates n a mnth-ahead basis.

11 The next big thing? Ciled, heated cars carry heavy crude. Grwing demand as pipeline prjects linger in regulatin. Argus assesses vlumes at 540 bl/car fr heavy crude, cmpared with 660 bl/car fr light. Surce: US Patent and Trademark Office

12 Rail access issues New crridrs call fr new investments BNSF says much f its $4.1bn in capital investments this year will g tward lines that carry crude by rail. Unin Pacific spending $3.6bn, targeting suthern US. Canadian Pacific spending $1.1bn, largely n crude-by-rail. Canadian Natinal spending $1.9bn t address bttlenecks. Key pinch pints Chicag: Inter-train transfers can add a day t travel time. Nrth Dakta: Traffic grwing in all directins. Alberta: Opprtunities emerging t the suthwest. East cast: Histrically cngested, little rm t grw.

13 Intermdal cst analysis

14 February mdality cmparisn Cst by mile varies widely, even in the same mde. Overseas freighters cheapest every time. Seaway enjying a premium because it ges t the US Gulf cast. illuminating the markets Cpyright 2013 Argus Media Ltd.

15 Intermdal examples Eagle Frd/Gardendale, TX t St James, LA (Feb.) Rail, manifest rate: $6.59/bl. Uncmmitted pipeline/barge: $3.99/bl. - Plains All American Eagle Frd pipeline t Crpus Christi barge terminal: $1.25/bl. - Barge t St James: $2.74/bl. Bakken/Mint, ND t Hustn, TX (Feb.) Rail, manifest rate: $9.70/bl; unit train rate: $8.26/bl. Uncmmitted ttal pipeline tariff: $8.58/bl. - Enbridge Mint t Clearbrk: $1.23/bl. - Enbridge Clearbrk t Flanagan: $1.38/bl. - Enbridge Spearhead Flanagan t Cushing: $2.15/bl. - Seaway t Hustn: $3.82/bl.

16 Valer s utlk Recently gave mnth marginal light crude il cst utlk Rail t Califrnia gets $2-$3/bl discunt t Brent Rail t east cast break-even Rail/pipeline t Hustn $3-$6/bl discunt Rail t St James $2-$5/bl discunt Expect Gulf cast will have cst advantage versus east cast, west cast and freign markets.

17 Case study: Grays Harbr, Washingtn

18 Flcking t western Washingtn illuminating the markets Cpyright 2013 Argus Media Ltd.

19 Why the sudden rush t western Washingtn? Access t pen water. Prspects fr lcal supprt high unemplyment, prt already in place. Rail access via BNSF and Unin Pacific Vicinity t Bakken (ne-third the distance t east cast). Can handle barges fr Califrnia-bund Bakken r tankers carrying Canadian crude verseas. Attractive cmpared with the uncertainty ver Canadian pipeline prjects.

20 Three crude-by-rail unlading terminals prpsed Page 3 1 Feb map Pg 5 table

21 Argus Petrleum Transprtatin

22 Argus Petrleum Transprtatin Nrth America Insight int changing transprtatin issues. Railing, barging, pipeline and waterbrne. Rute rates fr crude/ngl/refined prducts/bifuels. Infrastructure news Maps/Analysis. Arbitrages.

23 Analysis f grwing nshre rail market Nrth Dakta riginatin Denver Tulsa Chicag Bakersfield, CA Seattle Hustn St James, LA Prt Arthur New Yrk $/bl per 100 miles

24 Argus assessing Jnes Act dirty tanker market East cast refiners appear serius abut branching int Eagle Frd crude. Jnes Act tankers mst affrdable, direct way t get it there frm Texas. Prducers beginning t discuss exprts as utput grws and ptential destinatins shrink.

25 Basic methdlgies Publish prices that reflect prevailing levels fr transprtatin f petrleum cmmdities in specified rail lanes. Assess rates separately fr manifest and unit trains. Include diesel surcharges levied n shippers by railrads - based n a mnthly average f EIA n-highway diesel prices D nt include switching and terminal fees. Assess barge rates n US inland waterways thrugh a survey f peratrs, shippers and ther participants. Assess waterbrne freight n prevailing $/t rate fr generic clean and dirty tanker rutes.

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27 Any questins?

28 Mark Babineck Editr, Argus Petrleum Transprtatin Nrth America Phne: IM: argus_markbabineck