Ruby Pipeline Wyoming Pipeline Authority January 15, 2008 Ed Miller EPWP Dan Fitzgerald PG&E.

Ruby Pipeline

Wyoming Pipeline AuthorityJanuary 15, 2008

Ed MillerEPWP

Dan FitzgeraldPG&E

2

El Paso Corporation Overview

• El Paso Corporation provides natural gas and related energy products in a safe, efficient, dependable manner. We own North America’s largest natural gas pipeline system and are one of North America’s largest independent natural gas producers. We are organized around regulated and non-regulated businesses.

3

El Paso Pipeline System

• 19% of total U.S. interstate pipeline mileage• 23 Bcf/d capacity (16% of total U.S.)• 16 Bcf/d throughput (28% of gas delivered to U.S.

consumers)• Best market connection• Best supply access• Leading pipeline integrity program

El PasoNatural Gas

Mexico Ventures

MojavePipeline

ColoradoInterstate Gas

Wyoming Interstate

Cheyenne Plains

Pipeline

TennesseeGas Pipeline

SouthernNatural Gas

Florida GasTransmission (50%)

Elba IslandLNG

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Ruby Pipeline MapRuby Pipeline Map

Malin

Opal Hub

U T A HU T A H

N E V A D AN E V A D A

O R E G O NO R E G O N

C O L O R A D OC O L O R A D O

I D A H OI D A H O

C A L I F .C A L I F .

W Y O M I N GW Y O M I N G

CIG

Kern River

Paiute

Tuscarora

PG&E

GTN

Ruby PipelineOpal to Malin

WIC

CheyennePlains

Cheyenne

UintaBasin

PiceanceBasin

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Ruby Capacity and Facilities

• Design and rates are based upon 1.2 Bcf/d of capacity• 680 miles from Opal to Malin• 42”, 1,440 psig pipe design

– Most cost effective design taking fuel and expansion opportunities into consideration

• Compressor stations

– Opal ~45,400 HP (site rating)

– Midpoint ~18,200 HP (site rating)

– Fuel from Opal ~0.9%• Four delivery point interconnects and five receipt point interconnects• Expandable to 2 Bcf/d with compression

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Ruby Highlights to Date

• 1.2 Bcf/d pipeline from Opal to Malin

• Ownership structure

– El Paso Western Pipelines

– PG&E Corporation

– Bear Energy

• During past 5 months, Ruby Project has been presented to most Rockies producers and some western markets under Confidentiality Agreements

• Ruby filed an application with the BLM in November to construct a pipeline between Opal and Malin

• Negotiations with pipe mills and contractors have been ongoing for over 6 months

– Estimate has been finalized during this process

• Approximately 50% of firm capacity has been committed

• Ruby requires firm capacity commitments of 1.2 Bcf/d to be constructed

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-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

1970 1990 2010 2030 2050 2070 2090

Rockies versus Western CanadaLong-Term Production Trends

Best fit of Current Trend:- 2033 Peak- 14 Bcfd Production

El Paso Base Case

El Paso High Case

Best Fit Curves Assumes:- Gaussian Curve - 320 EUR- Few environmental constraints

El Paso Base case suggest 9,650 Bcfd of export capacity needed (currently 6,200 in 2007) to meet 85% LF requirementEl Paso High case suggest 12,000 Bcfd of export capacity needed (currently 6,200 in 2007) to meet 85% LF requirement

Canadian Peak- 2001 Peak- 17 Bcfd

8

Rocky Mountain Production by Basin

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Big Horn Wind River

Green River Overthrust

Powder River Uinta

Piceance Denver

(Volumes are Wellhead – Measured in MMcfd)

1990-2005: Wellhead total data from IHS database2006: Estimate2007-2015: El Paso forecast

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Projected Gas Flowswith Ruby

Chicago

NE

AECO

3.28% fuel

Malin (GTN)1.3%fuel

NORTHERNCALIFORNIA

2.87% fuel

2.98

% fu

el

Kern1.3%fuel

San Juan

Western Canada

ProductionLocal

Consumption Exportable

2008 15.69 5.01 10.0

2012 14.32 5.83 8.49

Projected2012 Price

w/Ruby

PipelineFuel Only

DispatchMalin Price

AECO 7.39 0.251 7.641

ROX 7.52 0.0683 7.588

Ruby0.9% fuel

NWP

TC

2012 Northern CA Economic Dispatch2.87% fuel

1.82% fuel

Bcf/d

Total Eastbound pipeline capacity

12 Bcf/d

Ruby gas will befirst through themeter at Malin

1.68%fuel

Total Westbound pipeline capacity

2.6 Bcf/d

ROX BasisImprovement w/Ruby2012: $0.50-$0.602015: $1.50 - $1.75

ROX

1% fuel

4.8% to 5.3% fuel

5.75% fuel

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Ruby Proposed Next Steps

April-Oct. 2008Feb./Mar. 2008Jan. 2008

JanuaryRuby Packages

Customer Follow-Up

October 2008State RegulatoryApprovals

May 2008Transporter Board Approval

February-MarchBinding

Open Season

April 2008Shipper

BoardApprovals

FebruaryEl Paso UpstreamCapacity Open Season

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Ruby Schedule Highlights

July-NovemberRoute Surveys

and Mapping

MarchPipe Option

AprilReceive Certificate

JanuaryFERC Prefiling

JanuaryFile FERCCertificateApplication

OctoberPipe Commitment

JulyCommence

Construction

March 2011In-Service

Preliminary route work completed

20112010200920082007

MayFormal CustomerDiscussionsCommence

Filed routewith BLM

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Market Overview

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U.S. West CoastDistinct Gas Markets

Supplied primarily from two regions:

1. Western Canadian Sedimentary Basin2. Western Domestic Basins (Rockies, San Juan and Permian)

• Pacific Northwest 600 Bcf/yr

• Northern California 835 Bcf/yr• Northern Nevada 65 Bcf/yr

• Southern California 965 Bcf/yr

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Malin Takeaway

• 2.2 Bcf/d firm takeaway capacity plus displacement on GTN at Malin

• Access to west coast market:

– Northern/Central California via Pacific Gas and Electric Company

– Northern Nevada via Tuscarora Gas Transmission

– Pacific Northwest via GTN and indirectly to Williams’ Northwest Pipeline and Avista Utilities

– Southern California via deliveries off PG&E system

• Access to 82 Bcf of underground storage

– PG&E (CA): 42 Bcf

– Wild Goose (CA): 24 Bcf *

– Lodi (CA): 16 Bcf *

WASHINGTON

IDAHO

BRITISH COLUMBIA

OREGON

CALIFORNIA

PG&E

Tuscarora Gas Transmission

GTN

Northwest Pipeline

Mist

Jackson Prairie

Malin

Sumas

NEVADA

Seattle

Portland

San Francisco

Ruby

* Currently being expanded

Line 400

Line 401

Line 401Line 300

Line 2

Lodi

Wild Goose

Pleasant Creek

Los Medanos

PG&E Area of Detail

McDonaldIsland

Natural Gas Storage

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Northern/Central California Market2006 Demand

• 2006 annual gas demand of 835 Bcf

• Annual growth forecasted at 1.3% through 2025

– Results in incremental requirement of 67 Bcf of annual gas demand by 2012

• 2006 peak day demand was 3.5 Bcf (2007 peak day of 3.9 Bcf)

– PG&E, Wild Goose and Lodi storage fields serve peak day demands

• Two strong gas demand periods

– Winter: Large residential demand

– Summer: Large gas-fired generation load and storage injections

1.5

2.0

2.5

3.0

3.5

4.0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Bc

f/d

ay

Sources: 2006 California Gas Report and PG&E CGT Pipe Ranger

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Northern Nevada Market2006 Demand

• Annual gas demand of 64 Bcf

• Annual growth forecasted at 4.0% through 2016

– Results in incremental requirement of 17 Bcf of annual gas demand by 2012

• Seasonal demand

• 2006 Peak day demand was 0.32 Bcf

– Lovelock LNG storage (1.0 Bcf) located near Reno, NV serve peak day demands

• Ruby interconnects with both Paiute (near Lovelock) and Tuscarora (at Malin)

0.05

0.10

0.15

0.20

0.25

0.30

0.35

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Bcf

/da

y

Seasonal Market with a Winter Peak

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Pipelines in Northern Nevada

IDAHO

OREGON

Northwest Pipeline

NEVADAReno

Tuscarora

Paiute

GTN

CALIFORNIA

PG&E

0.2 Bcf/d

Malin

0.17 Bcf/dUTAH

RUBY

• Northern Nevada is served via two pipelines (Tuscarora and Paiute)

• Paiute Pipeline

– Largest customers: SWG, Sierra Pacific

• 96% of transport contracts

– 155 MDth/d receipt capacity from NWPL

• ~75 MMcf/d sources from Canadian supply

• NWPL contracts expire by 2009

– System operates at an average load factor of 71%

• Tuscarora Gas Transmission

– Largest customers: Sierra Pacific, SWG, Barrick Gold

• Represent 96% of transport

– Certificate issued 7/24/07 for an expansion of 40 MDth/d that will serve the Tracy Power Plant (514 MW)

• 22.5-year contract with Sierra Pacific Power (40 MDth) upstream of Malin

– SWG and Barrick do not hold capacity on upstream pipe

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Pacific Northwest (PNW) Market2006 Demand

• Annual gas demand of 600 Bcf• Annual growth forecasted at 2.1% through 2012

– Results in incremental requirement of 80 Bcf of annual gas demand by 2012

• 2006 peak day demand was 2.9 Bcf– Jackson Prairie, MIST and Clay Basin storage fields serve peak day demands

• Gas-fired power generation load varies depending on hydro power availability• Demand is more seasonal

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Bcf

/da

y

WASHINGTON

IDAHO

BRITISH COLUMBIA

OREGON

GTN

Northwest PipelineSeattle

s

KingsgateSumas

MIST

Portland

s

Jackson Prairie

NWN

MalinNEVADA

Sources: Northwest Gas Association 2006 Outlook and Northwest Pipeline and GTN Scheduled Volumes

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Contacts

Ed MillerBusiness [email protected]

Roland HarrisBusiness [email protected]

Russ [email protected]

Jennifer WebsterGovernment [email protected]

Dan [email protected]

Jeff [email protected]

El Paso Western Pipelines PG&E

Bear Energy

Ruby Pipeline

Wyoming Pipeline AuthorityJanuary 15, 2008

Ed MillerEPWP

Dan FitzgeraldPG&E