Presentation by CNX Gas Company LLC - Spectra Energy · Presentation by CNX Gas Company LLC FERC Technical Conference December 8, 2009 TETLP Docket No. RP10-30-000 Presented by: Roland

Presentation by

CNX Gas Company LLC

FERC Technical Conference

December 8, 2009

TETLP Docket No. RP10-30-000

Presented by: Roland J. Campanelli/William M. Hauck – CNX Gas

Bruce Craig, PhD - MetCorr

12/8/2009 FERC Docket No. RP10-30-000 2

Who Is CNX Gas Company?

• 2nd largest Appalachian producer – 4.1 MM Net Acres, Net Production Sales 92 Bcf/2009

• Safety driven - No lost-time accidents since 1994– Drilled and operate >2,600 wells with over 1,000 miles of pipeline

• Largest producer of CBM/CMM in Appalachia– ~250,000 net Mcf/day

• Growing Marcellus shale producer – ~15,000 net Mcf/day

– 230,000 net acres

• Long term sales commitments up to 125,000 Mcf/day on TETLP

CNX is a leading Appalachian producer with large capital investments

and future growth plans in the Appalachian basin.

12/8/2009 FERC Docket No. RP10-30-000 3

CNX Location on TETLP System

Source: TETLP Presentation to CNX on TEAM Project

CNX’s production is ~250 miles from the NE market area and

downstream of Gulf and Rockies commingling supplies.

12/8/2009 FERC Docket No. RP10-30-000 4

CNX’s Position on TETLP’s Proposed

Tariff

• There is no need to:

– Lower the existing CO2 or O2 specs, or

– Establish a minimum Wobbe spec

• The proposed tariff will limit existing and future supply

• The existing H2O spec adequately addresses transmission line

corrosion concerns

• Our concerns on ethane, nitrogen and sulphur will be addressed in

our forthcoming comment filing

TETLP’s existing quality specs protect the pipeline

while maximizing gas supply for energy independence.

12/8/2009 FERC Docket No. RP10-30-000 5

Carbon Dioxide

TETLP proposes to lower CO2 spec

from 3% to 2%

12/8/2009 FERC Docket No. RP10-30-000 6

• Some supply at Blessing TX would be excluded

• Yet with commingling, no other point even approaches 2% CO2

• NE Markets average about 1% CO2

Source: RP10-30-000 TETLP Filing Appendix A Presentations

No historical CO2 issues and the proposed 2% CO2 spec will

exclude supplies.

12/8/2009 FERC Docket No. RP10-30-000 7

TETLP’s Blending Studies (1)

TETPL’s blending studies show NE Market area CO2

levels projected to decline versus base cases

Supply Source CO2

LNG 0.003%

Marcellus 0.08%

REX 1.3%(2)

(1) Source: RP10-30-000 TETLP Filing Blending Studies, Appendix A Presentations

(2) The Rockies Express Tariff limits CO2 to 2%. 10/10/09 through 11/10/09 EBB data from REX shows CO2

averaged 0.9%

TETLP’s blending studies confirm no future CO2 issues.

12/8/2009 FERC Docket No. RP10-30-000 8

Presented by:

Bruce Craig, PhD - MetCorr

On behalf of CNX Gas

Internal Pipeline

Corrosion

12/8/2009 FERC Docket No. RP10-30-000 9

Internal Pipeline Corrosion

• No liquid water phase = no corrosion (true for both CO2 and O2)

• Example:

– A steel pipe filled with methane and anywhere from 0% to 100% of

either CO2 or O2 will not corrode regardless of the duration of the

exposure as long as the moisture in the gas stays in the vapor phase

Water in the liquid phase is the culprit, not CO2 or O2.

12/8/2009 FERC Docket No. RP10-30-000 10

Internal Pipeline Corrosion

At existing 7lb H2O/MMscf spec there is no

corrosion problem, regardless of CO2 or O2

content.

• At 7lbs of H2O/MMscf (TETLP

spec) water in vapor phase will

not condense into liquid phase

even at extreme winter pipeline

conditions (1500 psig & 48 oF)(1)

(1) RP10-30-000 TETLP Filing Affidavit of John R. Hand, pg. 6, #18

(2) Source of Chart: McKetta-Wehe Chart for Estimating the Water

Content of Sweet Natural Gas - GPSA Engineering Data Book, 11th

ed., 1998

48 oF

9 lb H2O

12/8/2009 FERC Docket No. RP10-30-000 11

Minimum Wobbe Spec

TETLP proposes to create a

minimum Wobbe spec of 1314

12/8/2009 FERC Docket No. RP10-30-000 12

•System average is currently 1346

•Deliveries to the NE Market rarely approach

1330 Wobbe

Source: RP10-30-000 TETLP Filing Appendix A Presentations

Historically there has not been a minimum

Wobbe interchangeability issue.

12/8/2009 FERC Docket No. RP10-30-000 13

TETLP’s Blending Studies (1)

TETPL’s Blending Studies show NE Market area Wobbe

levels projected to increase versus base cases

Supply Source Wobbe

LNG 1371

Marcellus 1436

REX 1343

(1) Source: RP10-30-000 TETLP Filing Blending Studies, Appendix A Presentations

TETLP’s blending studies confirm no future Wobbe

interchangeability issues.

12/8/2009 FERC Docket No. RP10-30-000 14

CNX’s CBM Analysis

Gas Analysis Sample –

processed to 3% CO2

Mole %

Methane: CH4 96.23

Ethane: C2 0.10

Propane: C3 0.07

Butane+: C4+ 0.00

Nitrogen: N2 0.53

CO2 3.00

Oxygen: O2 0.07

Btu/scf 976

WOBBE 1274

TETLP’s skewed +4% (1400) to -2.4% (1314) proposed Wobbe range excludes

certain supplies in favor of high Btu gases such as LNG.

12/8/2009 FERC Docket No. RP10-30-000 15

Impact on Lean Gas Supplies

TETLP proposes to lower CO2 spec to 2% and

create a minimum Wobbe spec of 1314

12/8/2009 FERC Docket No. RP10-30-000 16

NGC+: Minimum Wobbe(1)

• NGC+ Interim Guidelines are for delivery points

• NGC+ Work Group focused on maximum Wobbe

• NGC+ Work Group did not develop interchangeability calculations

for minimum Wobbe; -4% guideline chosen for symmetry reasons

• NGC+ Work Group states that minimum Wobbe of -4% is

conservative, not a prediction of flame instability

(1) Source: NGC+ Interchangeability Work Group, White Paper on Natural Gas Interchangeability and Non Combustion

End Use, February 2005, Appendix G at pages 6-7.

The science to support the minimum Wobbe still needs to be

performed. Gas below -4% is interchangeable.

12/8/2009 FERC Docket No. RP10-30-000 17

1200

1220

1240

1260

1280

1300

1320

1340

1360

1380

1200

1220

1240

1260

1280

1300

1320

1340

1360

1380

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0%

Wo

bb

eW

ob

be

Vol% CO2

GA

S E

XCLU

DED

BY

4%

TO

TAL

INER

TS

(970 Btu)

(970 Btu)

Total Inerts = 4%CH4 = 96%CO2 = 0%N2 = 4%

Btu = 970Wobbe = 1284

CH4 = 96%CO2 = 3%

N2 = 1%

Btu = 970Wobbe = 1265

Relationship Between Wobbe, Total Inerts,

And Btu/Scf In Lean Gases

TETLP’s 4% total inert spec establishes minimum Wobbe at ~1265.

• 4% total inert & 967 lower Btu specs:

- are consistent with one another, and

- equate to a minimum Wobbe of ~1265

• NGC+ specified 4% total inerts

12/8/2009 FERC Docket No. RP10-30-000 18

1200

1220

1240

1260

1280

1300

1320

1340

1360

1380

1200

1220

1240

1260

1280

1300

1320

1340

1360

1380

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0%

Wo

bb

eW

ob

be

Vol% CO2

GA

S E

XC

LUD

ED B

Y

4%

TO

TAL

INER

TS

(970 Btu)

(970 Btu)

Total Inerts = 4%CH4 = 96%CO2 = 0%

N2 = 4%

Btu = 970Wobbe = 1284

CH4 = 96%CO2 = 3%

N2 = 1%

Btu = 970Wobbe = 1265

CH4 = 100%CO2 = 0%N2 = 0%

Btu = 1010

Wobbe = 1357

CH4 = 97%CO2 = 3%N2 = 0%

Btu = 980

Wobbe = 1283

Acceptable Lean Gas -- Current Tariff

Current tariff allows for a broad range of lean gases such as CBM.

12/8/2009 FERC Docket No. RP10-30-000 19

1200

1220

1240

1260

1280

1300

1320

1340

1360

1380

1200

1220

1240

1260

1280

1300

1320

1340

1360

1380

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0%

Wo

bb

e

Wo

bb

e

Vol% CO2

0% N2

1% N2

2% N2

(1010 Btu)

(1000 Btu)

(990 Btu)

(1000 Btu)

(990 Btu)

(970 Btu)

(980 Btu)

(990 Btu)

(980 Btu)

(970 Btu)

(980 Btu)

(970 Btu)

Wobbe = 1314

GA

S E

XC

LUD

ED B

Y

4%

TO

TAL

INER

TS

(980 Btu)

GAS EXCLUDED BY 2% CO2

Limit

GA

S E

XC

LUD

ED B

Y 1

29

2 W

OB

BE

Wobbe = 1292

GA

S E

XC

LUD

ED B

Y 1

31

4 W

OB

BE

3% N2

Acceptable Lean Gas -- Proposed Tariff

TETLP’s proposed 1314 minimum Wobbe spec would exclude

historically acceptable lean gases from the system.

• Proposed Wobbe & CO2 specs:

- Voids the current 967 Btu & total inert spec

- Excludes historically usable gas

• Even a -4% lower limit (1292) excludes

usable gas

12/8/2009 FERC Docket No. RP10-30-000 20

CNX’s Historical Production into

TETLP Meter (73512)

900

1000

1100

1200

1300

1400

1.0

2.0

3.0

4.0

5.0

6.0

1/20/09 2/20/09 3/20/09 4/20/09 5/20/09 6/20/09 7/20/09 8/20/09 9/20/09 10/20/09 11/20/09

Gre

en

hill (7

35

12

) Wo

bb

e an

d B

tu/scf

Gre

en

hill

(7

35

12

) V

ol%

C

O2

WOBBE EXCLUDED GAS QUALITY

CO2 EXCLUDED GAS QUALITY

WOBBE PROPOSED GAS QUALITY

CO2 PROPOSED GAS QUALITY

CO2

Btu/scf

WOBBE

Existing specs already strike the right balance between

maximizing supply and end-use interchangeability.

12/8/2009 FERC Docket No. RP10-30-000 21

Oxygen

TETLP proposes to lower O2 spec from

0.2% (2000 ppm) to 0.1% (1000 ppm)

12/8/2009 FERC Docket No. RP10-30-000 22

• Historical averages are well below both current and proposed specs

• No new supplies reported to be high in O2

• CNX already addressed corrosion issue

O2 is not a problem today, nor is there evidence it will be a

future problem.

Source: RP10-30-000 TETLP Filing Appendix A Presentations

12/8/2009 FERC Docket No. RP10-30-000 23

CNX’S Overall Conclusion

• TETLP has not demonstrated that CO2, minimum Wobbe, and O2 are problems today, nor that they will become problems in the future

• TETLP’s proposed specs will definitely exclude existing and future supplies, particularly lower Btu (lean) unconventional supply such as CBM

– Lean gas is part of the solution

• Current total inerts, lower Btu and H2O tariff specs adequately protect the system

TETLP’s EXISTING SPECS strike the right balance between system

integrity and safety, end-use interchangeability and maximizing supply.

12/8/2009 FERC Docket No. RP10-30-000 24

CNX’S Recommendation

• Maintain current quality specs for CO2 and O2 and do not

set any minimum Wobbe spec

• TETLP should perform quality studies over the next 3-5

years to see the effects of the change in supply mix,

before proposing any new specs

TETLP’s Proposed Specs Are Unnecessary!