Western Energy Alliance Alliance Pipeline - Open for Business September 23, 2010 Jim Goldmann Vice President & Chief Development Officer
Forward looking statements and information Certain information contained in this presentation, including use of the words anticipate, expects, and expected to, constitute forward looking statements and information. Although Alliance believes that these statements are based on information and assumptions which are current, reasonable and complete, these statements are necessarily subject to a variety of risks and uncertainties including, but not limited to, future operating performance, regulation, economic conditions and fundamentals affecting the oil and gas producing and marketing industries. Should one or more of these risks or uncertainties materialize or fail to materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. 2
Agenda Alliance Pipeline: Background Markets NGLs Fundamentals: Natgas from shale & tight sands British Columbia and Alberta North Dakota Alliance Pipeline: An underused North Dakota outlet 3
Alliance Pipeline Ownership Structure 50% Enbridge Inc. o TSX:ENB / NYSE:ENB 50% Fort Chicago Energy Partners L.P. o TSX:FCE.UN Key Office Locations Alliance Pipeline Ltd. Calgary, Alberta Alliance Pipeline L.P. Eden Prairie, Minnesota 4
North American Shale Plays 5
Alliance Pipeline System Performance History: 10 years of safe operations 2,400 miles of 36 pipe 1.6 Bcfd capacity 1.365 Bcfd contracted Transported 5.7 Tcf since start up 6
Alliance Pipeline s Joliet Deliver Header 36 pipe for 13 miles @ 1207 psi MAOP Connectivity to 7 Pipes in the Chicago area Direct connection to Aux Sable Liquid Products 2.1 Bcf/d world scale fractionation / extraction facility 87,000 bbl/d of spec NGL products Can receive NGL mix by truck and rail Nicor Vector Guardian ANR People s NGPL 7 Midwest Gas
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Alliance WCSB Production Forecast Bcf/d 20 18 16 14 12 10 8 6 4 WCSB Base Case SK Bakken Horn River Montney SK Conventional BC Conventional CBM Gas From Oil Wells AB Conv Gas Total 2 0 8 Source: Alliance Pipeline 2010 forecast off data from IHS Energy Enerdeq, *Wood Mackenzie April 2010, Long-Term View
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Alliance BC Production Forecast Bcf/d 7 BC Production 6 5 Horn River* 4 Montney 3 BC Conventional 2 1 0 9 Source: Alliance Pipeline 2010 forecast off data from IHS Energy Enerdeq, *Wood Mackenzie April 2010, Long-Term View
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Montney Raw Gas Forecast by Vintage Bcf/d Montney Raw Gas By Vintage 2020 2.5 2019 2018 2017 2016 2 2015 2014 2013 2012 1.5 2011 2010 2009 2008 1 2007 2006 2005 2004 0.5 2003 2002 0 2001 2000 1999 Earlier 10 Source: Alliance Pipeline 2010 forecast off data from IHS Energy Enerdeq
Alliance Alberta Demand Forecast 11 Source: Alliance Pipeline 2010 forecast off ERCB 2009 ST-98
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Exports from AB & BC Forecast to Decline Bcf/d 18 Net Exports from AB + BC: 2010 vs Capacity Bcf/d 18 16 16 14 14 12 12 2010 10 10 8 8 Capacity 6 6 4 4 2 2 0 0 12 Source: Alliance Pipeline 2010 forecast off data from IHS Energy Enerdeq, Capacity estimates from RBAC Inc. s Gas Pipeline Competition Model
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Alliance Bakken Oil Production Forecast Bpd ND Oil Production Forecast Three 700,000 Forks/Sanish Williams 600,000 Ward Stark Slope 500,000 400,000 Renville Mountrail McLean McKenzie McHenry 300,000 200,000 100,000 Golden V. Dunn Divide Burke Bowman Bottineau Billings 0 13 Source: Alliance Pipeline 2010 analysis of data from IHS Energy Enerdeq / North Dakota Division of Minerals Resources, Oil & Gas Division
North Dakota Production Implications for Natgas & NGL Significant potential being proven from the Sanish / Three Forks horizons Significant infill drilling potential Producers are still ramping up the learning curve Bakken Reserves: 4 Bbbl Oil 1.85 Tcf Gas & 148,000 Mbbl NGL Gas to Oil Ratio of 1 bbl to 1.0 Mcf 600,000 bpd 600,000 Mcf/d Estimated reserve life of 22 years 14
Northwest North Dakota 15
Williston Basin Readily Accessible to Alliance Pipeline 16 North Dakota DMR
What You Should Know About Alliance Pipeline in North Dakota EOG s Pecan Pipeline began deliveries to Alliance Pipeline in April 2010 Gas tariff quality waiver #1 allowing 1500 btu 80 MMcfd Alliance is seeking additional supply from North Dakota - has unused capability and would expand Alliance will entertain building laterals to you With a gas tariff quality waiver, you can deliver entrained NGLs saving conditioning and transport costs 17
ACE Hub : Delivery & Receipt Capacity Alliance Header Delivery Capability Alliance Contracted Deliveries Spare Station Capacity Meter Station Delivery Point Capacity Nicor 350 350 - NGPL 1,600 2 1,598 Vector 2,000 381 1,619 ANR 1,150 650 500 Midwestern 650 3 647 Peoples 600 588 12 Guardian 1,150 14 1,136 Total 7,500 1,988 5,512 Downstream Receipt Capability* Downstream Takeaway Capacity 2009 Average Utilization 2009 Spare Capacity Delivery Point Nicor 800 665 135 NGPL 1,200-1,200 Vector 1,325 1,205 120 ANR 1,000 96 904 Midwestern 400 76 324 Peoples 1,550 443 1,107 Guardian 750 65 685 Horizon 380 18 362 Total 7,405 2,568 4,837 *as reported by GPCM10Q2 Base Case Alliance, into interstates and Chicago citygates market indices, as reported in Platts Gas Daily, are very closely matched with 99.95% correlation over the past 5 years.
Proposed new Hub Alliance Chicago Exchange (ACE) Chicago is evolving into a significant market hub With the new shale gas revolution Chicago is only more strategic Alliance is working to leverage interconnection of our header to downstream markets & other pipes with new services: Park and Loan Wheeling Pricing will be competitive: additional services are being developed 19
Closing Remarks US receipts of Canadian gas are going to decline US unconventional gas and NGLs appear limitless Williston Basin seems destined to ~ 600 MMcfd Alliance offers a uniquely competitive ONE PIPE - solution for Natgas and NGLs Avoiding capital and opex in field processing Avoiding C2 through C4 specific transport Delivers Chicago rather than Vent and Conway Alliance has open capacity today 20
Alliance Business Contacts Jim Goldmann VP & Chief Development Officer Direct:(403) 517-6517 Email: jim.goldmann@alliancepipeline.com Bob Blattler Manager, Supply Development Direct:(403) 517-6431 Email: bob.blattler@alliancepipeline.com Grant Monsour Business Development Manager Direct:(403) 517-7776 Email: grant.monsour@alliancepipeline.com www.alliancepipeline.com 21
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