Energy East Pipeline. Linking West with East: An Overview. SIMSA Oil & Gas Supply Chain Forum November 2015

Transcription

1 Energy East Pipeline Linking West with East: An Overview SIMSA Oil & Gas Supply Chain Forum November 2015

2 Forward-looking information This presentation contains certain information that is forward looking and is subject to important risks and uncertainties. The words "anticipate", "expect", "believe", "may", "will", "should", "estimate", "project", "outlook", "forecast", "intend", "target", "plan" or other similar words are used to identify such forward-looking information. Forward-looking statements in this presentation are intended to provide TransCanada security holders and potential investors with information regarding TransCanada and its subsidiaries, including management s assessment of TransCanada s and its subsidiaries future plans and financial outlook. Forward-looking statements in this presentation may include, but are not limited to, statements regarding anticipated business prospects; financial performance of TransCanada and its subsidiaries and affiliates; expectations or projections about strategies and goals for growth and expansion; expected cash flows; expected costs; expected costs for projects under construction; expected schedules for planned projects (including anticipated construction and completion dates); expected regulatory processes and outcomes; expected outcomes with respect to legal proceedings, including arbitration; expected capital expenditures; expected operating and financial results; and expected impact of future commitments and contingent liabilities. These forward-looking statements reflect TransCanada's beliefs and assumptions based on information available at the time the statements were made and as such are not guarantees of future performance. By their nature, forward-looking statements are subject to various assumptions, risks and uncertainties which could cause TransCanada's actual results and achievements to differ materially from the anticipated results or expectations expressed or implied in such statements. Key assumptions on which TransCanada s forward-looking statements are based include, but are not limited to, assumptions about inflation rates, commodity prices and capacity prices; timing of debt issuances and hedging; regulatory decisions and outcomes; arbitration decisions and outcomes; foreign exchange rates; interest rates; tax rates; planned and unplanned outages and utilization of the Company s pipeline and energy assets; asset reliability and integrity; access to capital markets; anticipated construction costs, schedules and completion dates; and acquisitions and divestitures. The risks and uncertainties that could cause actual results or events to differ materially from current expectations include, but are not limited to the ability of TransCanada to successfully implement its strategic initiatives and whether such strategic initiatives will yield the expected benefits; the operating performance of the Company's pipeline and energy assets; the availability and price of energy commodities; amount of capacity payments and revenues from the Company s energy business; regulatory decisions and outcomes; outcomes with respect to legal proceedings, including arbitration; counterparty performance; changes in environmental and other laws and regulations; competitive factors in the pipeline and energy sectors; construction and completion of capital projects; labour, equipment and material costs; access to capital markets; interest and currency exchange rates; weather; technological developments; and economic conditions in North America. Additional information on these and other factors is available in the reports filed by TransCanada with Canadian securities regulators and with the U.S. Securities and Exchange Commission (SEC). Readers are cautioned against placing undue reliance on forward-looking information, which is given as of the date it is expressed in this presentation or otherwise stated, and not to use future-oriented information or financial outlooks for anything other than their intended purpose. TransCanada undertakes no obligation to publicly update or revise any forward-looking information in this presentation or otherwise stated, whether as a result of new information, future events or otherwise, except as required by law. EE4721-TCPL-PR-PN-0281-Energy East Protected- UNCONTROLLED IF PRINTED 2

3 TransCanada is a Trusted Canadian Energy Company One of North America s Largest Natural Gas Pipeline Networks 68,000 km of pipeline 368 Bcf of capacity 14 Bcf/d or 20% of 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 Source: International Energy Agency World Energy Outlook 2014 EE4721-TCPL-PR-PN-0281-Energy East Protected- UNCONTROLLED IF PRINTED 3

4 Energy East: Connecting Canada $12 billion investment required to build Energy East 4,600 km length of 42 pipeline from Alberta to New Brunswick 1.1 million bpd total capacity 14,000 jobs during development & construction $36 billion GDP added to the economy $7 billion additional taxes Q National Energy Board filing amendment 2020 expected startup date EE4721-TCPL-PR-PN-0281-Energy East Protected- UNCONTROLLED IF PRINTED 4

5 Million tons of oil equivalent ENERGY EAST PIPELINE Canada and the World Need Oil Other Renewables Bioenergy Hydro Nuclear Gas Oil Coal Source: International Energy Agency World Energy Outlook

6 Global Oil Reserves by Country 6

7 Energy East at a Glance Batch crude oil pipeline Markets: Eastern Canada, U.S East Coast, U.S. Gulf Coast and global markets Major components of the project: Converting roughly 3,000 km (two-thirds of project length) of existing natural gas pipeline in Saskatchewan, Manitoba and Ontario to an oil pipeline Building 1,600 km of new pipeline primarily in Alberta, eastern Ontario, Québec and New Brunswick to link up with the converted pipe Building associated facilities, pump stations and tank terminals needed to move oil from Alberta and Saskatchewan to refineries in Québec and New Brunswick, including marine facilities for shipping exports to other markets Governed by the National Energy Board (NEB)

8 About Conversion Conversion is the re-purposing of an existing natural gas pipeline for crude oil service: Key elements of pipeline conversion: Integrity: conditioning of the pipeline for new liquid operations Isolation: Removal of existing connections to the natural gas pipeline New Facilities: construction of pump stations, terminals and other crude oil facilities Conversion Expertise and Experience: The Keystone Pipeline System included conversion of more than 800 km of existing TransCanada natural gas pipeline through Saskatchewan and Manitoba Since operations began in 2010, we have safely delivered more than 1 billion barrels of crude oil from Hardisty, Alberta to U.S. refineries

9 Energy East in Saskatchewan Pipeline and Facilities Conversion of approx. 623 km of pipeline Potential 60-km lateral pipeline from Cromer, MB to Moosomin Tank Terminal in Saskatchewan 12 pump stations: Clinworth Herbert Caron Regina Grenfell Moosomin Liebenthal Pennant Chaplin Belle Plaine Kendal Whitewood

10 Energy East Pipeline Project: National Benefits Conference Board of Canada assessment of the economic impact of Energy East: During the seven-year development and construction phase ( ) $11.5 billion in additional GDP for the Canadian economy $2.9 billion in tax revenues 13,690 full-time equivalent (FTE) direct and indirect jobs During the first 20 years of operations $24.9 billion in additional GDP for the Canadian economy $4.7 billion in additional tax revenues 3,273 full-time equivalent (FTE) direct and indirect jobs Note: All figures estimated

11 Energy East Pipeline Project: Local Benefits in Saskatchewan During the seven-year development and construction phase ( ) $600 million in additional GDP for the Saskatchewan economy $135 million in tax revenues 763 full-time equivalent (FTE) direct and indirect jobs During the first 20 years of operations $2.14 billion in additional GDP for the Saskatchewan economy $220 million in additional tax revenues 208 full-time equivalent (FTE) direct and indirect jobs 2014 Conference Board of Canada Report Note: All figures estimated

12 Delivering Energy Safely: TransCanada s #1 Priority Pipelines are the safest mode of oil transportation Energy East will be the one of most technologically advanced pipelines ever built 24/7 monitoring system with highly trained staff and satellite technology Safety valves strategically located to minimize impact to safety and environment Extra safety precautions at road, rail and water crossings and near populous areas to minimize stakeholder and environmental impact TransCanada has spent an average of $900 million per year over the last three years on pipeline integrity and preventative maintenance programs Safety is TransCanada s highest priority

13 Energy East: Respecting the Environment ENERGY EAST PIPELINE TransCanada s ongoing goal is to minimize disturbance to the environment Adhere to the strictest environmental guidelines throughout project Mitigate potential impacts during and after construction Preserve important natural and cultural features at each step Conduct extensive environmental studies on fish, wildlife, vegetation and other areas Collaborate with communities while collecting environmental data Re-establish essential characteristics of land after construction

14 Engagement Early engagement with landowners, elected officials, municipalities, emergency responders and aboriginal communities Council meetings offered to all directly affected communities along the route Public open houses and briefings with community leaders 15 open houses in SK to date (450 attendees) Comprehensive mail outs and s project information packages and newsletters Continuous dialogue with the Saskatchewan Association of Rural Municipalities (SARM) and Saskatchewan Urban Municipalities Association (SUMA)

15 Engagement: Saskatchewan Close to 145 affected Saskatchewan municipalities (cities, towns and villages) along the proposed Energy East Pipeline route To date, we have conducted more than 214 briefings and meetings and more than 350 individual contacts with various community leaders, councils and stakeholder groups in Saskatchewan $150,000 in flood relief in 2014 To date, 39 Saskatchewan municipalities have expressed support for Energy East via letters and/or formal resolutions of support We believe in open and truthful dialogue with communities and are committed to earning your support and building strong relationships over the long-term

16 Contracting Strategy TransCanada and Energy East committed to Supplier Diversity and Local Participation including Aboriginal suppliers Energy East in the process of reviewing the Contracting Strategy for the Project Evaluating regional, scope-based contracts to get the best mix of regional contribution, size / scope of contracts, and project management effort for the Project Types of contracts could include EPC, traditional design-bid-build, or other variations Energy East preparing to procure long-lead equipment and materials if required to support project schedule

17 Aboriginal Contracting Established Aboriginal Contracting Program at TransCanada and on Energy East Engaged 30 Aboriginal Communities (First Nation & Metis) in SK 500 Aboriginal businesses in our data base Canada wide EPC / Prime Contractors will be required to include a Local / Aboriginal Plan with their proposals on the Energy East Project Aboriginal Spend (employment, contracting, procurement) to be tracked on the Project Energy East has a dedicated Aboriginal Contracting team $600M Aboriginal Spend (TransCanada to date)

18 Contracting / Procurement Status Initial Solicitations of Interest (SOIs) for major EPC packages issued and evaluated between Q Q Path forward for these packages will be confirmed with the Contracting Strategy Some preliminary material and equipment agreements (MOUs) executed: e.g. Canadoil (fittings), EzeFlow (fittings), GE (motors) Equipment for Pump Stations is currently under review: e.g. E- Shelters, pumps, and motors Environmental and Traditional Knowledge studies are ongoing Timing of long-lead equipment and material procurement under review

19 List of Services: Development and Construction Fabrication Work Structural Piping Spools Land Survey Environmental and Traditional Knowledge Studies Geo-technical Brushing/ Snow Removal Rig Mats Supply Construction Equipment Rental Concrete and Aggregate Supplies Engineering (e.g. regional subcontract) Mechanical, Electrical, Civil work March 25, 2015 Sand Padding Emergency material requirements Construction Consumables/ Office Supplies Fencing/Temporary Lighting Short Term Office Support Field/Construction Labor Fuel Supply Hotel Accommodations Camp Potable Water/Sewage Removal Testing of Concrete, Soil, etc. Trailer Rental Security Services 19

20 List of Services: Operations To support TransCanada operations and maintenance activities, external contractors will be required for the following services: Picker & Crane Operators Vacuum Truck Operators Technical Trades General Labourers Vegetation Control Snow Plowing Brush Control Hydrovac Operators Back hoe Operators Aerial Patrol Aircraft with pilots Pigging crews Welders NDE inspection crews Rig mat crews Geotechnical Environmental Consultants Security March 25,

21 Project Timeline Q2 2013: Launch of engagement program October 2014: Initial NEB regulatory application filing April 2015: Decision to revisit Quebec marine terminal options Q4 2015: File amended application with NEB 2017/2018: Construction and conversion begins (pending regulatory approval) 2020 Commissioning and in-service to Quebec and New Brunswick : Ongoing community engagement and consultation - listening and adapting

22 Register to work on Energy East How to access Vendor Portal for Registration: Contractor, Supplier and Vendor Registration Form By completing the Registration Form, your company s information will be retained and referenced for upcoming work. You do not need to complete this form on any additional TransCanada websites. TransCanada requires that certain goods and services be pre-qualified before contracts are put in place to ensure the safety and quality of the work being performed or goods being obtained. By completing this form you will also be subscribed to our Contractor, Supplier and Vendor Communications List. 22

23 Energy East: Ways to Get Involved Be vocal and help correct misinformation when you hear it Visit energyeastpipeline.com to learn the facts Join the Energy East Action Network action.energyeastpipeline.com Pass a municipal council resolution in support of Energy East Send a letter in support of Energy East to the National Energy Board (NEB)

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