Title Of Presentation CONNECTING THE NORTH Arctic Gas Symposium November 2001 Houston, TX.

Title Of Presentation

CONNECTING THE NORTHCONNECTING THE NORTH

Arctic Gas SymposiumNovember 2001

Houston, TX

2

TransCanada

• Third largest gas transmission system in the world - over 38,000 km

• Move about 75% of Western Canada’s natural gas production to market

• Over $20 billion in assets

• Manage or control over 1900 MW of power

3

TransCanada

Foothills

Northern BorderGreat Lakes

Trans Quebec &Maritimes

Iroquois

Portland

Tuscarora

BRITISHCOLUMBIA

ALBERTA

SASKATCHEWAN

MANITOBA

ONTARIO

QUEBEC

NUNAVUTYUKON NORTHWEST

TERRITORIES

Chicago

WinnipegRegina

Calgary

Niagara

Montreal

Longlac

Empress

Edmonton

Vancouver

Yellowknife

Fort Nelson

Power Plants (Includes Plants Under Development

Bear Creek

Williams Lake

MacKay River

Sundance A

Redwater

Carseland

Cancarb Nipigon

Calstock

Kapuskasing

Tunis

North Bay

Curtis Palmer

Castleton

Ocean State

TransCanada’s Pipeline and Power Assets

4

Direct Access to Five Growth Markets in North America

Potential Alaska Supply

PotentialMackenzie Supply

Eastern Canada /Northeast U.S.A.

Midwestern U.S.A.

PacificNorthwest /California

Alberta / B.C.

5

North American Gas Demand Growth

2.4 Bcf/d2.3%/yr

1.5 Bcf/d3.1%/yr

3.3 Bcf/d3.1%/yr

1.9 Bcf/d3.2%/yr

Total North American Demand: 66 Bcf/d in 1998 87 Bcf/d

in 2010

2.8 Bcf/d2.1%/yr

6

Western Canadian Supply Response

# o

f G

as

Wel

ls

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

4

6

8

10

12

14

16

1990 1995 2000

Development

Exploration

5330

1006

8500

6350

Del

ive

rab

ilit

y

7

2000 2005 2010 2015 2020 2025

Bcf

/ d

0

5

10

15

20

25

NEB Case 1

NEB Case 2

Western Canadian Supply

Forecast

Alaskan and Canadian frontier reserves are needed to meet demand growth

8

Yukon

Alaska

Nunavut

Northwest Territories

B.C.

Alberta

Mackenzie DeltaReserves: 9 Tcf Proven 64 Tcf UltimateProduction: None

Mackenzie DeltaReserves: 9 Tcf Proven 64 Tcf UltimateProduction: None

Alaska North Slope(Prudhoe Bay)Reserves: 31 Tcf Proven 99 Tcf UltimateProduction: 8 Bcf/d (associated) 7 Bcf/d (re-injected)

Alaska North Slope(Prudhoe Bay)Reserves: 31 Tcf Proven 99 Tcf UltimateProduction: 8 Bcf/d (associated) 7 Bcf/d (re-injected)

Northern Gas Resources

9

The Two-Pipe Solution

ArcticNationalWildlifeReserve

Yukon FlatsWildlife Reserve

IvvavikNational

ParkPrudhoe Bay

MackenzieDelta

Alaska

Yukon

NorthwestTerritories

Nunavut

Manitoba

Saskatchewan

Alberta

BritishColumbia

WASHINGTON IDAHO

MONTANA

Inuvik

NORTHDAKOTA

•Mackenzie Valley

shortest, least cost for

Delta gas

•Alaska Highway

quickest, least cost for

Alaska North Slope

Gas

•Environmentally and

technically superior

•Least cost, lowest risk

solution

10

Alaska Highway Gas Pipeline Project

• 2820 km, 42” diameter

• Operating pressure: 2050 psi

• Initial volumes:2.5 Bcf/d

• Ultimate volumes:4.0 Bcf/d

• Initial cost:US$7.6 billion

• Ultimate cost:US$9.7 billion

• 2 Year construction• Estimated Toll:

~US $1/mcf

ArcticNationalWildlifeReserve

Yukon FlatsWildlife Reserve

IvvavikNational

ParkPrudhoe Bay

MackenzieDelta

Alaska

Yukon

NorthwestTerritories

Nunavut

Manitoba

Saskatchewan

Alberta

BritishColumbia

WASHINGTON IDAHO

MONTANA

Gordondale

NORTHDAKOTA

Anchorage

Whitehorse

Prebuild

11

Mackenzie Valley PipelineLowest Cost, Quickest to Market for Delta Gas

Route Description

• 1220 km, 30” diameter

• Operating Pressure 2050 psi

• Initial Volumes 0.8 Bcf/d

• Ultimate Volumes 1.2 Bcf/d

• Initial Cost US $2.0 billion

• 2 Year Construction

ArcticNationalWildlifeReserve

Yukon FlatsWildlife Reserve

IvvavikNational

Park MackenzieDelta

Alaska

Yukon

NorthwestTerritories

Nunavut

Manitoba

Saskatchewan

Alberta

BritishColumbia

WASHINGTON IDAHO

MONTANA

Inuvik

NORTHDAKOTA

12

The Mackenzie Valley ...a priority for TransCanada

• A stand-alone Mackenzie Valley Pipeline is a strategic priority for TransCanada

• It is the closest, least costly project to access incremental gas supply

• It is a good fit with TransCanada’s existing facilities

13

Route Considerations

• General route based on historical data• Route refinement will consider:

• aboriginal issues -- traditional knowledge• environmentally sensitive areas• existing utility corridors• presence of permafrost, ice content• stability of permafrost slopes• frost heave & thaw settlement potential• drainage and erosion

14

Construction Issues

• 2 - 3 year winter construction• plus 1 year prior for logistics (barging in

equipment in summer)• River crossings -- 4 major rivers greater than

275 m in width• Continuous permafrost and discontinuous

permafrost • manage with combination of route location,

thickness of pipe and temperature of gas

15

TransCanada is Uniquely Positioned

• Extensive system south of 60

• Alberta System can be economically ‘right-sized’ to accommodate Delta volumes

• Efficient use of existing facilities

• Lowest overall transportation cost to market

ArcticNationalWildlifeReserve

Yukon FlatsWildlife Reserve

IvvavikNational

Park MackenzieDelta

Alaska

Yukon

NorthwestTerritories

Nunavut

Manitoba

Saskatchewan

Alberta

BritishColumbia

WASHINGTON IDAHO

MONTANA

Inuvik

NORTHDAKOTA

16

What TransCanada Offers

• Extensive experience in large pipe construction and natural gas operation in extremely cold weather

• Successful project management expertise

• Lowest cost alternative

17

Conclusions

• Gas from both Northern basins will be required to meet growing demand

• Each basin will be developed when appropriate for that area

• Producers currently studying feasibility of pipelines out of each area

• TransCanada is uniquely positioned to play a key role in getting Northern natural gas to the growing North American marketplace

• We will work with all stakeholders to help develop the best options for safe, reliable delivery of natural gas

Thank you