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Rockies Alliance Pipeline

Rockies Alliance Pipeline. Wyoming Pipeline Authority Meeting Casper, Wyoming October 21, 2008 Gaylen Haag. Agenda. Project Introduction Project Owner Background Connected Facilities RAP Project Advantages Supply & Demand Outlook Proposed Negotiated Rates & Competitive Analysis

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Rockies Alliance Pipeline

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  1. Rockies Alliance Pipeline Wyoming Pipeline Authority Meeting Casper, Wyoming October 21, 2008 Gaylen Haag

  2. Agenda • Project Introduction • Project Owner Background • Connected Facilities • RAP Project Advantages • Supply & Demand Outlook • Proposed Negotiated Rates & Competitive Analysis • Project Details and Schedule

  3. Rockies Alliance Pipeline “Bullet Line To Chicago”Proposed In-Service Nov. 1, 2012 • Opal to Wamusutter: • 213 miles • 36” • 1458 psig • Capacity of 1.0 Bcf/d • Expansion up to 1.3 Bcf/d Chicago • Meeker to Wamusutter: • 140 miles • 36” • 1440 psig • Capacity of 810 mmcf/d • Expansion up to 1.0 Bcf/d • Wamusutter to Joliet: • 1080 miles • 42” • 1440 psig • Capacity of 1.3 Bcf/d • Expansion up to 1.7 Bcf/d

  4. RAP Project Summary • Bullet Pipeline from Rockies producing area to Chicago markets. • Capacity of 1.3 Bcf/d, expandable to 1.7 Bcf/d. • 1080 miles of 42” inch pipe @ 1440 MAOP. • In-service date anticipated to be November 1, 2012. • Estimated capital cost of $5.0 Billion.

  5. Alliance Pipeline Largest construction project in North Americaat the time - larger than Rockies Express • US$4.5B project delivered on time and on budget • Project executed 1997-2000 • 2,311 miles from NE BC to Chicago • Operational since 2000 • Operating at full capacity (1.6 bcf/d) • Owned 50% by Enbridge and 50% by Fort Chicago

  6. Inuvik Norman Wells Zama Fort St. John Fort McMurray Edmonton Rabaska Hardisty Clearbrook Regina Superior Ottawa Saint John Montreal Toronto Kansas City Casper Buffalo Salt Lake City Chicago Toledo Patoka Liquids Transportation Wood River El Dorado Cushing Gas Transmission Gas Distribution Wind farms/developments Houston Alliance Pipeline Ownership Support – Enbridge – Pipeline Experience • 12,000 miles of gas gathering and transmission • Deliver nearly 70% of WCSB crude oil production to the US • Canada’s largest LDC, Consumers Gas • 16 major pipeline projects under development or execution: • - Ranging between 20” to 42” Dia. • - Totaling 2,475 miles • - over $19B in projected capital

  7. Questar Pipeline • Questar Pipeline has become a major force in the Rockies • Questar Pipeline’s strategic location provides the lowest cost options for expansion • More than 2,500 miles of pipe with plans to add nearly 1,000 miles more • Capacity commitments have grown on the system from 1.5 bcf/d to 3.5 bcf/d over the past four years • Questar Pipelines E&P affiliate will be a major shipper on RAP

  8. Questar Overthrust Pipeline • Overthrust is a 213-mile, 36” diameter pipeline from Opal to Wamsutter with contracted capacity of over 1.4 Bcf/d • Overthrust is economically expandable from Opal to Wamsutter. • Overthrust is proposing to expand its system from Wamsutter to White River Hub (at Meeker). • Overthrust is expected to be the major supply system to the Rockies Alliance Pipeline

  9. RAP Contracted Facilities – Questar Overthrust Pipeline RAP to contract for capacity on Questar Overthrust Pipeline to provide the following interconnections: • Opal area • Opal Plant Pioneer Plant • Blacks Fork Plant Granger Plant • Multiple interstate pipelines • Wamsutter area • Echo Springs Lost Cabin • Multiple interstate pipelines • White River Hub (Meeker) • Enterprise • Multiple interstate pipelines • Cheyenne (direct to RAP) • Powder River pipelines • Multiple interstate pipelines

  10. RAP Connection to Alliance Pipeline “Alliance, into interstates” and “Chicago city-gates” market indices, as reported in Platts Gas Daily, are very closely matched with 99.95% correlation over the past 5 years.

  11. RAP Project Advantage • Integrated pipeline solution to deliver Rockies gas to market with a seamless single rate service. • Optimizes and utilizes existing system capability. • Expansion capability from 1.3 Bcf/d to 1.7 Bcf/d. • Initial fuel rate = 1.42% (Wamsutter – Chicago). • Potential for an integrated “delivery hub” with Alliance Pipeline for over 3 Bcf/d of combined flow. • Well established, highly liquid delivery point intoChicago market. • Focused project team dedicated to meet shipperneeds and to deliver project on timeand on budget.

  12. Growing Rockies Gas Supply Bcf/d * Historical Data Source: PI / Dwights 2007 Accelerated Drilling Forecast Historical Trend + Pinedale SEIS

  13. Bcf/d Accelerated Drilling Historical Trend + Pinedale SEIS Export Capacity + Rockies Consumption 9.4 Export Capacity 7.8 Production vs. Pipeline Capacity Eastbound Expansion 20 Years 1.3 BCF/D Ruby Pipeline 26 Years 1.1 BCF/D

  14. Surplus Production Impact on Rockies Value

  15. Surplus Production Impact on Rockies Value

  16. RAP Negotiated Reservation Rates(Deliveries to Chicago) • Foot notes: • Fuel to be adjusted to reflect actual fuel requirements. Fuel charges associated with transport upstream of Wamsutter will be calculated as per Questar Overthrust Transportation Tariff. • Incremental rates from Opal to Wamsutter are as per the current Overthrust Recourse Rate. • Incremental rates from Meeker to Wamsutter are as per the Overthrust Open Season dated Feb. 29, 2008

  17. Transportation to ChicagoCompetitive Analysis

  18. Market OutlookCIG to Chicago Basis • Forecast Basis based on Platts 20 year monthly Forecast from 2009 to the end of 2028. • Historical Basis based on actual monthly indices for the past 4 years. • Reservation Rates based on proposed rates for 15 year contracts.

  19. Project Details • Open Season ended June 16, 2008 • Initial interest = 480,000 Dth/d of subscriptions • Follow-Up Open Season to be held in the near future. • Targeted in-service November 1, 2012 • Based on execution kick off early 2009 • Historic regulatory and permitting process defines critical path • Capacity 1.3 Bcf/d expandable to 1.7 Bcf/d • Minimum contract requirements for kick off ~ 1.0 Bcf/d • Project Scope • Capital Cost ~ $5.0 Billion • Length = 1080 miles • Size and Pressure = 42” @ 1440 MAOP

  20. RAP Project Schedule

  21. Rockies Alliance Pipeline Contact Information Questions concerning the RAP project should be directed to: Alliance Pipeline: • Eric Besseling (403)-517-6551 • Lorraine Lindberg (713)-821-1746 Questar Overthrust Pipeline: • Shelley Wright (801) 324-2509 • Gaylen Haag (801) 324-5133

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