Project Management Track: Lean Projects, Cost Controls, Price Forecasts, & Resource Management - PART 3

Streamlining Project Controls for Midstream & Downstream :The Technology Advantage

Rob Burton, Major Projects Program Manager, TransCanadaBalaji Sreenivasan, Founder/CEO, Aurigo Software

Agenda Oil & Gas Industry TODAY

Technology Play in Upstream Oil Extraction and

Drilling

Waterfall Effect | Midstream / Downstream

TransCanada Business Environment

Technology Selection and Approach

Saving Money and Time for TransCanada

Oil & Gas Industry TODAY

Supply & Demand - 2015

- Increased supply

- Saudi Arabia equally surprised

- Economic conditions drove efficiency

- Technology will continue to have long-term impact on lowering costs

Energy Prices Crashed in 2014

Reasons for Price Drop

Increased efficiency of production

New sources via fracking, Shale Oil and others

Made possible with technology

Disruptive approach from smaller players

Application of Technology Brings Costs Down

The American Energy Renaissance & The Waterfall Effect

The Waterfall Effect – Focus on Midstream & Downstream

Early Stage of American Energy Renaissance primarily in

upstream exploration and production (E&P)

Technology will continue to lower costs in the midstream and downstream markets, just as it

did for upstream

The next phase is midstream and downstream, with an increase in expenditure by over

250%*

Technology will lower capital construction costs for midstream and downstream

Technology can control and reduce costs of constructing pipelines, storage terminals, and

refineries by up to 6%.

Technology can control and reduce costs of constructing pipelines, storage

terminals, and refineries by up to 6%

*2014 Outlook on the O&G Industry by Deloitte


Unparalleled Portfolio of Complementary Energy Infrastructure Assets

‾ One of North America’s Largest Natural Gas Pipeline Networks

‾ 68,000 km (42,000 mi) of pipeline‾ 406 Bcf of storage capacity‾ 14 Bcf/d or 20% of continental

demand‾ Premier Liquids Pipeline System

‾ 4,250 km (2,600 mi) of pipeline‾ 530,000 bbl/d or 18% of Western

Canadian production‾ Largest Private Sector Power Generator

in Canada‾ 19 power plants, 10,900 MW

‾ Total Assets ~ $57 billion



* Certain projects are subject to various conditions

including corporate and regulatory approvals.

$45 Billion Portfolio of Commercially Secured Projects*

⁻ Industry-leading growth portfolio

⁻ $24 billion of liquids pipelines

⁻ $19 billion of natural gas pipelines

⁻ $2 billion of power generation facilities

⁻ All backed by long-term contracts or a

regulated cost-of-service business model

TransCanada Project Controls Solution

• Full automation of all processes

• Better decisions with analytics

• Reduce overhead and overages

Increase Productivity

• Fully integrated GIS information for inspections

• Integrate quality metrics (NCR, etc.) with SAP

LeverageSAP and GIS

• Direct data entry in the field

• Field to web, web to SAP

• Analytics everywhere

Enable Mobility

• Intelligent data in addition to document control

• Project controls, quality, construction management

• Additional modules - land, scheduling, pipeline

Integrated Solution

Extending SAP for TransCanada

Technology Selection and Approach

What We Did/Where We’re At

⁻ Identified and reviewed 25 existing

technology solutions in Major Projects

⁻ Assessed and ranked over 30

technologies in total

⁻ Piloted with 2 vendors

⁻ Selected Aurigo Masterworks to enable

our processes

⁻ Launched the Technology Enablement

Project in November 2014

Development

2014

Implementation

1 – 3 Years

Operation

Ongoing

Initial Configuration Phase

Project Controls (future)

Engineering

Field Construction

(Linear)

Document and Drawing Management

Project Controls (future)

Land Management

(future)

Saving Time and Money for TransCanada

Business Challenges

-Increasingly complex regulatory environment-Require better data capture, analysis and reportingcapabilities

-Rapid growth to support $45B project portfolio-Require process workflow to move away from the “experience” model

-Diverse project structures, processes and systems-Capital Project Management System in place but notdetailed enough at procedural level-Require structured guidance for project teams to improve efficiency and consistency of our project delivery

Solution: a single, integrated technology system to enable our capital project processes and procedures

Benefits to TransCanada

⁻ TransCanada is the premier builder and owner of energy pipelines in North America with pipeline projects to East, West and South of the US and Canada

⁻ Estimated investments at about $ 45 BN including Keystone and Energy East

⁻ Improve quality, reduce costly errors, regulatory compliance

Thank You