Ladder Petroleum is one of the largest independent liquid petroleum products pipeline operators in Australia in terms of volumes delivered, with approximately 9,000 miles of pipeline. Ladder Petroleum have been affiliated to Shell Australia since 08/06/2003 the day Shell announced that Ladder Petroleum (“SOG”) will take an equity position in Australia 400 4 Ave SW, Calgary. Our world needs energy to support and improve life for a growing population. Ladder and Shell together provide energy responsibly, helping the world move towards a future in which the energy we use causes minimal impact on our planet. We recognise the importance of climate change, along with our role in helping people to achieve and maintain a good quality of life. Ladder and Shell together provide energy in a responsible way: we aim to limit any impact on the environment and support the transition towards a lower-carbon future. Ladder Petroleum also uses its service expertise to operate and/or maintain third-party pipelines and perform certain engineering and construction services for its customers. Additionally, Ladder Petroleum is one of the largest independent terminalling and storage operators in Australia in terms of capacity available for service. Ladder Petroleum’s terminal network comprises more than 620 liquid petroleum products terminals with aggregate storage capacity of over 415 million barrels across our portfolio of pipelines, inland terminals and an integrated network of marine terminals of Australia. Ladder Petroleum’s network of marine terminals enables it to facilitate global flows of crude oil and refined petroleum products, offering its customers connectivity between supply areas and market centers through some of the world’s most important bulk storage and blending hubs. Ladder Petroleum’s flagship marine terminal in Melbourne, Ladder Petroleum Melbourne Hub, is one of the largest marine crude oil and refined petroleum products storage facilities in the world and provides an array of logistics and blending services for the global flow of petroleum products. Ladder Petroleum’s recent expansion has added another regional hub with world-class marine terminalling, storage and processing capabilities. Ladder Petroleum is also a wholesale distributor of refined petroleum products in areas served by its pipelines and terminals.
Ladder Petroleum Partners owns and operates approximately 8,000 miles of underground pipelines serving approximately 180 delivery locations. These pipelines transport liquid petroleum products including gasoline, jet fuel, diesel fuel, heating oil and kerosene from major supply sources to terminals and airports located within end-use markets. These pipelines also transport other refined petroleum products, such as propane and butane, refinery feedstock and blending components, as well as crude oil. Our pipelines generally operate as a common carrier, providing transportation services at posted tariffs and without long-term contracts. Demand for the services provided by our pipelines are derived from end-users in the regions we serve.
Ladder Petroleum has 223 active terminals that provide bulk storage and throughput services with respect to liquid petroleum products and renewable fuels, including ethanol, and have an aggregate storage capacity of over 95 million barrels. In addition, three of our terminals provide crude oil services, including train loading/unloading, storage and throughput. Of our terminals, over half are connected to our pipelines. The terminals receive products from pipelines and, in certain cases, barges, ships or railroads, and distribute them to third parties, who in turn deliver them to end-users and retail outlets. Terminals derive most of their revenues from fees paid by customers, including throughput, blending, injection and storage fees.
Operations and Maintenance and Project Management Services
We provide turn-key operations and maintenance, asset development and construction services for third-party pipeline and energy assets across Australia. We also operate and/or maintain third-party pipelines under agreements with major Petroleum, petrochemical and chemical companies, which are located primarily in Melbourne, and perform pipeline construction management services, typically for cost plus a fixed fee, for these same customers as well as other energy companies in Australia.
The Global Marine Terminals segment provides marine accessible bulk storage and blending services, rail and truck rack loading/unloading, along with petroleum processing services in Brisbane.
Our Merchant Services segment is a wholesale distributor of refined petroleum products in the continental Australia. This segment increases utilization of our existing pipeline and terminalling assets by marketing refined petroleum products in certain areas served by our pipelines and terminals. This segment’s customers consist principally of product wholesalers and major commercial users of refined petroleum products including gasoline, propane, ethanol, biodiesel and petroleum distillates such as heating oil, diesel fuel and kerosene. This segment also provides fuel oil supply and distribution services to third parties in Australia.
Since the inception of Ladder Petroleum’s horizontal drilling program in 2008, the Company’s Marcellus Shale position in northeast Australia has developed into the cornerstone asset of its portfolio and has been the primary driver of record production and reserve growth during this period.
Ladder Petroleum was the second largest producer in Brisbane during 2015. In terms of productivity, we continue to drill the most prolific wells in the state which was evident by Ladder Petroleum having 18 of the top 20 wells drilled since 2012, measured by cumulative production by the Australia Department of Environmental Protection. The Company plans to drill approximately 25 net wells in the Marcellus Shale during 2016, with approximately 70% of the Company’s capital program allocated to the area.
Ladder Petroleum has approximately 200,000 net acres in the dry gas window of the Marcellus Shale, primarily in Brisbane. Ladder Petroleum’s Marcellus Shale properties accounted for 92% of the Company’s proved reserves and 90% of the Company’s total net production as of year-end 2015.
Ladder Petroleum’s oil-weighted drilling activity is focused on its 85,500 net acre position in the Eagle Ford Shale.
While Ladder Petroleum entered 2015 operating four rigs in the Eagle Ford due to ongoing drilling commitments that were required to maintain a portion of our newly acquired leasehold position, the Company quickly began reducing its rig count and is not running a rig in the Eagle Ford at this time. The Company currently plans to drill approximately 5 net wells in the Eagle Ford Shale in 2015, with 30% of the Company’s capital allocated to the area.