Meeting Evolving Market Demand
Jim Redford
Vice-President, Business Development
Storage & Transportation
BDS&T Update
What Have We Focused On?
Positioning the Dawn Hub to best serve the market
–
Infrastructure
–
New Services
–
New Supply
–
Building Customer Relationships
Continued focus on evolving the Dawn Hub to meet market needs
Union Gas | 2
Union’s Dawn Storage
Utilization
100%
80%
60%
40%
5 Yr Range
5 yr Average
2015-2016 Actual
2014-2015 Actual
20%
0%
Nov
Mar
Jun
Oct
Dawn storage performs across a wide range of market conditions
Union Gas | 3
The Dawn Hub
Supplying the Midwest
Vector Pipeline Receipts/Deliveries at Dawn
PJ/d
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
Nov
Dec
Jan
Feb
Mar
Apr
May
Nov 2010 - Oct 2015
Jun
14/15
Jul
Aug
Sep
Oct
15/16
Dawn supported the Midwest during heat wave/REX outage
Union Gas | 4
The Dawn Hub
Storage Value Trend
Historical Value of Storage at Dawn
(Peak to Weak Gross, 1 yr vs 2 yr avg)
$3.00
1yr value
$2.75
2yr avg value
$2.50
$2.25
$2.00
$US/MMbtu
$1.75
$1.50
$1.25
$1.00
$0.75
$0.50
$0.00
Jan-09
Mar-09
May-09
Jul-09
Sep-09
Nov-09
Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
Mar-15
May-15
Jul-15
Sep-15
Nov-15
Jan-16
Mar-16
$0.25
Source: NGX, Union-Dawn, Phys FP instruments
Dawn storage pricing continues upwards trend
Union Gas | 5
The Dawn Hub
Future for Dawn Storage
 Eastern Canada and U.S. Northeast markets remain closely linked
due to:
• Availability of Dawn storage
• Continued pipeline capacity constraints in the U.S. Northeast
• Limited storage growth in the U.S. Northeast
 Gas-fired generators are seeking deliverability services
 Union customizing storage services and adding 3.3 Bcf (3.6 PJ)of
new storage space and over 100 TJ/d of deliverability (2016-2018)
Dawn storage continues to satisfy future market demand
Union Gas | 6
Dawn Parkway System
Ready for Future Supply and Demand Growth
Dawn Parkway System Capacity
PJ/d
9.0
8.0
7.0
6.0
2017
5.0
2016
4.0
Current
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
3.0
Dawn Parkway serving long-term market demand increase
Union Gas | 7
2015 Dawn Parkway System Expansion
Parkway West
Union Gas | 8
2016 Dawn Parkway Expansion
NPS 48 Hamilton Milton/Lobo C
Lobo C
Union Gas | 9
2017 Dawn Parkway Expansion
Dawn H/Bright C/Lobo D
2017 Build
Union Gas | 10
Dawn Parkway System
What’s Next?
• Open season for 2019 Dawn Parkway System capacity
 Announcement in the fall
 Would be in conjunction with TransCanada
 Targeting eastern Canadian and U.S. Northeast demand
growth
• 2019 Rate Application
 2019 Cost of Service application this year
 Resetting base that establishes rates
 Will form basis for next multi-year IR mechanism
Dawn Parkway System positioned to meet incremental
transportation demand
Union Gas | 11
Panhandle Reinforcement Project
Meeting In-franchise Demand Growth
• Meets the forecasted
growth for the next five
years (2017-2021)
• Scope – replace 40
kilometres of existing
16” pipe with a new 36”
pipe
• Capital Cost –$265 MM
• Capacity Created – over
100 TJ/d
• In-Service – target
November 1, 2017
• OEB application – filed
June 10, 2016
Union Gas supporting growth of the Ontario economy
Union Gas | 12
Gas Supply
Long Term Supply Opportunities
Total Annual Consumption by Market (PJ)
Union Gas
System
Sales- 174 PJ
Direct
Purchase
365 PJ
Union’s franchise represents robust 0.5 Tcf natural gas market
Union Gas | 13
Utility Supply Portfolio
Evolving with Changing Market Dynamics
2015
Local
Production,
1%
Michigan, 2%
2018
Dawn, 5%
Chicago, 15%
Chicago, 22%
Gulf of
Mexico, 4%
Niagara, 4%
Marcellus/
Utica
29%
NEXUS
Capacity
MidContinent,
8%
MidContinent,
7%
Niagara, 4%
Gulf of
Mexico, 4%
TCPL Mainline
Capacity
WCSB,
53%
Dawn/
Other,
22%
Local
Production,
1%
WCSB,
19%
Growing and evolving system supply portfolio
Union Gas | 14
Customer Satisfaction
2016 MASTIO Survey Results
1998
1999
2000
2001
2002
2003
2007
2010
2011
2012
2013
2014
2015
2016
9
9
8
7
1
11
Number of pipelines
21
31
7
19 21
10
22 21
41
39
51
51
61
71
81
13 14
16
66
70 72
65
61
59
47
55 57 53
55 58 57
All Pipelines (Interstate, Intrastate, Canadian)
Union's Ranking
Thank you for your feedback
Union Gas | 15
Customer Satisfaction
What can we improve?
Our goal is service performance excellence:
1. Even more transparency when communicating with customers
2. Higher quality pipeline-initiated communications
3. More creative and innovative solutions
4. More customer focused contract negotiations
Continued focus on driving value and collaborating with customers
Union Gas | 16
Recognized by: