Justin J. Kringstad North Dakota Pipeline Authority

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1 Justin J. Kringstad North Dakota Pipeline Authority

2

3 November 2008

4 May 2009

5 250,000 North Dakota Oil Production 200,000 Barrels of Oil Per Day 150, ,000 50,

6 US Williston Basin s Major Oil Pipelines 110,000 BOPD 58,000 BOPD Previously 92,000 BOPD Now 115,000 BOPD

7 Crude Oil Expansions At Least 55,000 BOPD of Capacity from Rail Facilities in 2009 Additional 51,600 BOPD Early 2010 Additional 23,000 BOPD Completed

8 500, , ,000 US Williston Basin Production* & Export Capacity Future Basin Production The Big Question BOPD 350, , , , , ,000 50,000 0 Dependent on: Crude Oil Price Technology Rig Availability Regulatory Policy *Production forecast is for visual demonstration purposes only and should not be consider accurate for any near or long term planning.

9 500,000 US Williston Basin Production* & Export Capacity 450, , , ,000 BOPD 250, , , ,000 50, Tesoro Refinery *Production forecast is for visual demonstration purposes only and should not be consider accurate for any near or long term planning.

10 500,000 US Williston Basin Production* & Export Capacity 450, , , ,000 BOPD 250, , , ,000 50,000 0 Butte Pipeline Tesoro Refinery *Production forecast is for visual demonstration purposes only and should not be consider accurate for any near or long term planning.

11 500,000 US Williston Basin Production* & Export Capacity BOPD 450, , , , , , , ,000 50,000 0 Enbridge Pipeline Butte Pipeline Tesoro Refinery *Production forecast is for visual demonstration purposes only and should not be consider accurate for any near or long term planning.

12 A Closer Look *Production forecast is for visual demonstration purposes only and should not be consider accurate for any near or long term planning.

13 Options For Post Reversal of the Enbridge Portal Pipeline

14 Enbridge s Potential Portal Reversal Expansion Cromer Enbridge Pipelines Westspur EPWI System Steelman Alida Enbridge Pipelines Inc EPI Mainline Canada United States Lignite Re-activate Portal Link 12 Portal Reversal Sherwood Beaver Lodge Stanley Berthhold Minot Enbridge Pipelines North Dakota EPND System Clearbrook 14

15 Options For Post Reversal of the Enbridge Portal Pipeline 2. Potentially Accessing the Keystone Pipelines Modified From:

16 North Dakota Industrial Commission Crude Oil Pipeline Feasibility Study Bakken to Keystone Pipeline System

17 Route Selection Study Objectives North, East, and Southwest route options Pros & cons of each route Economics Capital costs Operating costs Address quality concerns Determine project timeline(s) Propose a shipping rate for the new pipeline

18 Three Route Options Overview of the Three Routes Assessed

19 Route Hydraulics Max Q at 20 F 10" Line 12" Line 12" Line 4 Pumps 2 Pumps 4 Pumps North 63 MBPD 71 MBPD 98 MBPD West 62 MBPD 68 MBPD 95 MBPD East 56 MBPD 61 MBPD 86 MBPD

20 Interface Oil Sands Crude Lt. Sweet Bakken Crude Oil Sands Crude Alternative North East West Interface Volume 18,500 BBL 10,900 BBL 20,800 BBL

21 Opinion of Cost Capital Investment (million dollars) System 10 Diameter 12 Diameter Route North East West North East West Pipeline $102 $149 $115 $118 $172 $133 Stations $54 $54 $56 $42 $41 $42 Tanks $39 $39 $39 $39 $39 $39 Totals $195 $242 $210 $199 $252 $214

22 Opinion of Cost Annual Operating Costs (million dollars) Route System Operating Costs North 10 (4 Booster Stations) $5.236 North 12 (2 Booster Stations) $3.726 West 10 (4 Booster Stations) $5.834 West 12 (2 Booster Stations) $4.120 East 10 (4 Booster Stations) $6.233 East 12 (2 Booster Stations) $4.193

23 Economic Summary System Route $/BBL North East West North East West $4.24/BBL $5.24/BBL $4.59/BBL $4.22/BBL $5.32/BBL $4.57/BBL Note: Tariffs are calculated based upon a 15% rate of return and 55MBPD over a 20 year life. Independent Operator needing SCADA system and upper management cost could expect a tariff of $4.30 on 12 North Route

24 Simplified Project Timeline 3 rd or 4 th Qtr 2009 Design, Permits, etc. 1 st Qtr 2012 Begin Service 2 nd Qtr 2011 Construction

25 Study s Suggested Route Shortest Route Lowest Capital Investment Following Bakken Development Trend Lowest Tariff

26 Study Overview Route North East West Pipeline Length 169 Miles 240 Miles 188 Miles System System Capital Cost (Millions) $195 $199 $242 $252 $210 $215 Pipeline Cost/Mi $602M $698M $621M $715M $615M $707M Ops Cost ($/bbl) $0.26 $0.19 $0.31 $0.21 $0.26 $ % $4.24 $4.22 $5.25 $5.32 $4.59 $4.57 IRR ($/BBL) Interface Volume* 18.5MBBL 10.9MBBL 20.8MBBL *Interface Volume per Batch Shipped on TransCanada/Keystone Pipelines

27 Summary Anticipated that North Dakota will need additional capacity for transporting crude oil to market after 2010 Two options being actively pursued Enbridge s proposed portal reversal New interconnecting pipeline Full report available on the NDPA website: Other options most likely in the works NDPA looks ahead with optimism as we continue to develop North Dakota s pipeline infrastructure

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30 Thank You! North Dakota Pipeline Authority 600 E. Boulevard Ave. Dept. 405 Bismarck, ND Phone: (701) Fax: (701) E mail: jjkringstad@gmail.com Website:

Justin J. Kringstad North Dakota Pipeline Authority

Justin J. Kringstad North Dakota Pipeline Authority Justin J. Kringstad North Dakota Pipeline Authority 250,000 North Dakota Oil Production 200,000 Barrels of Oil Per Day 150,000 100,000 50,000 0 1949 1956 1963 1970 1977 1984 1991 1998 2005 2012 US Williston

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