El Paso Corporation Mark Westhoff Director, Facility and Capacity Planning El Paso Western Pipelines Capacity Reservation Factors October 22, 2008
Defining Our Purpose El Paso Corporation provides natural gas and related energy products in a safe, dependable, and efficient manner 2
Capacity Reservation Factors: Presentation Overview Introduction Description of Analysis Results Q&A 3
Introduction 4
Scheduling at Constant Rates Rate of Flow Time Flow constant Receipt equals delivery Capacity utilization = transport quantity 5
Managing Flow Variations 2.00 1.80 Ratio of Instantaneous to Average Flow 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 Drafting Packing Receipt Delivery "Withdrawal from pipe storage" "Injection to pipe storage" Out of pipe storage Receipt Quantity = Flowing Transport Daily Volume Withdrawal Injection Into pipe storage 0.00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hours 6
Total Pipeline Capacity Total Pipeline Capacity = Transport + Pipe Storage Transport capacity in the traditional sense Pipe Storage capacity to manage differences between receipt and delivery quantities Operations at full transport capacity No room for pipe storage Must have constant rates of flow 7
Scheduling Pipe Storage Space: HEEN Hourly Entitlement Enhancement Nomination Available for FT, FTH, NNTD and NNTH services Nominated by shipper HEEN allows shippers to manage their capacity Alternative: reserve hourly requirement 24/7 For FT-1 transactions Scheduled quantity = Flowing quantity (transport) + HEEN (pipe storage) 8
Scheduling Pipe Storage Space: CRN Capacity Reservation Nomination Component of FTH, NNTH services Automatically calculated Based on flowing nomination and service CRN = Capacity Reservation Factor multiplied by Transport Nomination Scheduled quantity = Flowing quantity (transport) + CRN (pipe storage) Duration at peak specified as part of service 9
Description of Analysis 10
Computer Models Advantica/Stoner transient simulations Facility configurations Mainlines and laterals With and without compression Lateral 10-inch single un-powered pipeline Mainline 30-inch pipeline single and looped Mainline compression on 50 mile spacing 11
Baseline Simple pipeline Constant rates of flow Receipts at one end; deliveries at other end Quantify full capacity 12
Study Assumptions Volume Rate (MMcf/d) 1000 900 800 700 600 500 400 300 Simulations: Example Volume Sets Delivery Quantity Receipt Quantity 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hours 850 Simulation Assumptions Receipts constant volume rate constant pressure Delivery (load) duration curves Varied hourly over day Balanced with receipts daily Simulations: Example Pressures Reduced capacity until Receipt/delivery balanced Calculated Pressures Below MAOP Above delivery pressure Pressure (psig) 800 750 700 650 600 MAOP Minimum Delivery Pressure 550 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hours 13
Sensitivities Peak Hour and Duration Facilities Single line Looped lines Lateral line Mainline and lateral Service mix: Non-uniform rates vs. uniform rates Pressure ranges 14
Presentation of Results Capacity Reservation Nomination (CRN) equals Capacity Reservation Factor (CRF) multiplied by Transport Nomination Total nominated quantity equals (1+ CRF) * Transport Nomination 15
Making sense of all the data Capacity Reservation Factor vs Mileage (All Data Points) 4.00 3.50 3.00 Capacity Reservation Factor 2.50 2.00 1.50 1.00 0.50 0.00 0 50 100 150 200 250 300 350 400 450 500 550 600 Mileage 1.5P-4H-100V 1.5P-4H-150V 1.5P-4H-200V 1.5P-4H-300V 1.5P-5H-100V 1.5P-5H-150V 1.5P-5H-200V 1.5P-5H-300V 1.5P-12H-100V 1.5P-12H-150V 1.5P-12H-200V 1.5P-12H-300V 1.5P-16H-100V 1.5P-16H-150V 1.5P-16H-200V 1.5P-16H-300V 1.7P-4H-100V 1.7P-4H-150V 1.7P-4H-200V 1.7P-8H-100V 1.7P-8H-150V 1.7P-8H-200V 1.7P-12H-100V 1.7P-12H-150V 1.7P-12H-200V 1.7P-14H-100V 1.7P-14H-150V 1.7P-14H-200V 2P-4H-100V 2P-4H-150V 2P-4H-200V 2P-8H-100V 2P-8H-150V 2P-8H-200V 2P-12H-100V 2P-12H-150V 2P-12H-200V 3P-4H-100V 3P-4H-150V 3P-4H-175V 3P-8H-100V 3P-8H-150V 16
Presentation Format Example 3.00 2.75 2.50 Capacity Reservation Factor 2.25 2.00 1.75 1.50 1.25 1.00 0.75 0.50 0.25 0.00 CRF = 0.75 0 50 100 150 200 250 300 350 400 450 500 550 600 Delivery Location 150% Peak hour 12-Hour Duration 250 Mi Miles from Delivery Location 17
Large percentage of small asset Example Storage Space 3.00 2.75 2.50 Capacity Reservation Factor 2.25 2.00 1.75 1.50 1.25 1.00 0.75 150% Peak hour 12-Hour Duration Small percentage of large asset 0.50 0.25 0.00 0 50 100 150 200 250 300 350 400 450 500 550 600 Miles from Delivery Location 18
Sensitivity: Duration of Peak Flow 4.00 Impact of Duration Peak Hour/Daily Average = 1.5 3.50 Capacity Reservation Factor 3.00 2.50 2.00 1.50 1.00 0.50 0.00 0 50 100 150 200 250 300 350 400 450 500 550 600 Mileage 4-Hour Duration 12-Hour Duration 16-Hour Duration 19
Sensitivity: Peak Hour 4.00 Impact of Peak Hour (Peak Hour/Daily Average = 1.5, 1.7, 2.0, 3.0) 4-hour Duration 3.50 Capacity Reservation Factor 3.00 2.50 2.00 1.50 1.00 0.50 0.00 0 50 100 150 200 250 300 350 400 450 500 550 600 Mileage 1.5 Peak Hour 1.7 Peak Hour 2.0 Peak Hour 3.0 Peak Hour 20
Sensitivity: Service Proportions, Looped Lines 4.00 3.50 3.00 Capacity Reservation Factor 2.50 2.00 1.50 1.00 150% Peak with 12 hour duration Nominal capacity: 558 MMcf/d Hourly service proportion: 100, 150, 200, 300 MMcf/d 0.50 0.00 0 50 100 150 200 250 300 350 400 450 500 550 600 Mileage 100 150 200 300 21
A Different Presentation Format Example Example Case Length = 200 miles Duration at peak = 8 hours 4.00 3.50 Capacity Reservation Factor 3.00 2.50 2.00 1.50 1.00 0.50 CRF = 2.26 Peak Hour to Avg equals 2.5 0.00 1.0 1.5 2.0 2.5 3.0 3.5 Ratio of Peak Hour to Daily Average 22
Sensitivity: Convergence Criteria Impact of Convergence Criteria (Hourly Volume 100 at 200 miles; 8-hr duration) 4.00 3.50 Capacity Reser vation Factor 3.00 2.50 2.00 1.50 1.00 0.50 0.00 1.0 1.5 2.0 2.5 3.0 3.5 Ratio of Peak Hour to Daily Average Original Pd Plus 10 Ps minus 10 Ps and Pd delta 10 23
Capacity Reservation Factors: 8-in Lateral Lateral Analysis 2.50 Capacity Reservation Factor 2.00 1.50 1.00 Lateral Summary Length = 50 miles Diameter = 8 inch Capacity = 17.15 MMcf/d 0.50 0.00 1 1.5 2 2.5 3 3.5 Note: Similar results for 8 and 10-inch lines, no compression, 50 miles in length Ratio of Peak Hour to Daily Average Steady-State CRF Transient CRF 24
Capacity Reservation Factors: 10-in Lateral Lateral Analysis 2.50 Capacity Reservation Factor 2.00 1.50 1.00 Lateral Summary Length = 50 miles Diameter = 10 inch Capacity = 32.8 MMcf/d 0.50 0.00 1 1.5 2 2.5 3 3.5 Note: Similar results for 8 and 10-inch lines, no compression, 50 miles in length Ratio of Peak Hour to Daily Average Steady-State CRF Transient CRF 25
Impact of Duration at 100 Miles 4.00 3.50 3.00 Capacity Reservation Factor 2.50 2.00 1.50 1.00 0.50 0.00 1 1.5 2 2.5 3 3.5 Ratio of Peak Hour to Daily Average 4 hr duration 8 hr duration 12 hr duration 16 hr duration 100 miles 26
Impact of Duration at 200 Miles 4.00 3.50 3.00 Capacity Reservation Factor 2.50 2.00 1.50 1.00 0.50 0.00 1 1.5 2 2.5 3 3.5 Ratio of Peak Hour to Daily Average 4 hr duration 8 hr duration 12 hr duration 16 hr duration 200 miles 27
Impact of Duration at 300 Miles 4.00 3.50 3.00 Capacity Reservation Factor 2.50 2.00 1.50 1.00 0.50 0.00 1 1.5 2 2.5 3 3.5 Ratio of Peak Hour to Daily Average 4 hr duration 8 hr duration 12 hr duration 16 hr duration 300 miles 28
Impact of Duration at 400 Miles 4.00 3.50 3.00 Capacity Reservation Factor 2.50 2.00 1.50 1.00 0.50 0.00 1 1.5 2 2.5 3 3.5 Ratio of Peak Hour to Daily Average 4 hr duration 8 hr duration 12 hr duration 16 hr duration 400 miles 29
Moderating Capacity Reservation Factors Aggregate profile of similarly situated deliveries Smoothing effect Offsetting peaks Distribution of deliveries especially on east end No refill potential Space remains for packing and drafting Rigorous modeling assumptions Full load condition Receipts at one end of pipe, deliveries at other end 30
Example Modeled Profiles Modeled Profiles 3.5 3 Ratio of Peak Rate to Daily Average 2.5 2 1.5 1 0.5 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hours FTH-12 FTH-16 FTH-8 170% Case 31
Observed Profiles Observed Electric Generation and LDC Group Profiles Ratio of Hourly to Daily Average 2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 09 AM 10 AM 11 AM 12 PM 01 PM 02 PM 03 PM 04 PM 05 PM 06 PM 07 PM 08 PM 09 PM Hour of Day Elec Gen Summer 10 PM 11 PM 12 AM LDC Winter 01 AM 02 AM 03 AM 04 AM 05 AM 06 AM 07 AM 08 AM 32
Results with Observed Profiles Impact of Convergence Criteria (Hourly Volume 100 at 200 miles; 8-hr duration) 4.00 3.50 Capacity Reser vation Factor 3.00 2.50 2.00 1.50 1.00 0.50 LDC EG 0.00 1.0 1.5 2.0 2.5 3.0 3.5 Ratio of Peak Hour to Daily Average Note: 8-hr Duration Set Original Pd Plus 10 Ps minus 10 Ps and Pd delta 10 33
Modeled Deliveries Delivery Modeled Supply 250 200 150 100 50 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 34
Aggregated Impact 700 600 500 400 300 600 500 200 Actual Impact 400 100 300 200 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 600 500 100 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 400 300 Delivery 200 100 600 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 500 Delivery Delivery Delivery 600 500 Supply 400 400 300 300 200 200 100 100 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 35
Distributed Deliveries Delivery Modeled: Full Load Full Length Supply Delivery Delivery Delivery Delivery Delivery Supply Actual: Progressive Unloading 36
Priorities 1 - Reliability of firm service 2 - Maximizing available capacity 37
Results 38
Presentation of Results Total nominated quantity equals Transport component plus pipe storage component Transport component is daily or flowing quantity Pipe Storage component is capacity reservation nomination (CRN) Capacity Reservation Nomination (CRN) = Capacity Reservation Factor (CRF) * Transport Nomination Total nominated quantity = (1+ CRF) * Transport Nomination Total Factor = 1+ CRF 39
Results Facilities required: Approximately 300 miles Capacity required Service New CRF New Total Old CRF Old Total FTH-3, NNTH-3 0.2 1.2 0.1 1.1 FTH-12, NNTH-12 0.3 1.3 0.25 1.25 FTH-16, NNTH-16 0.4 1.4 0.375 1.375 FTH-8 1.7 2.7 1.0 2.0 40
Conclusions Capacity Reservation Factors Will be increased effective Dec. 1, 2008 Evident in capacity postings such as Operationally Available Capacity Possible future adjustments Service reliability Maximize available capacity 41
Questions?