Kitimat LNG Pacific Trail Pipeline

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1 Kitimat LNG Pacific Trail Pipeline Premier s B.C. Natural Resource Forum Rod Maier, Chevron Canada Limited January 23, 2014

2 Cautionary Statement CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF Some of the items discussed in this presentation are forward-looking statements about Chevron Corporation ( Chevron ) and Chevron Canada Limited's activities in Canada. Words such as "anticipates," "expects," "intends," "plans," "targets," "forecasts," "projects," "believes," "seeks," "schedules," "estimates," "budgets," "outlook" and similar expressions are intended to identify such forward-looking statements. The statements are based upon management's current expectations, estimates and projections; are not guarantees of future performance; and are subject to certain risks, uncertainties and other factors, some of which are beyond the company's control and are difficult to predict. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are changes in prices of, demand for and supply of crude oil and natural gas; actions of competitors; the inability or failure of the company's joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude oil and natural gas development projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of the company's net production or manufacturing facilities or delivery/transportation networks due to war, accidents, political events, civil unrest, or severe weather; government-mandated sales, divestitures, recapitalizations, industry-specific taxes and changes in fiscal terms or restrictions on scope of company operations; foreign currency movements compared with the U.S. dollar; and general economic and political conditions. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Unless legally required, neither Chevron nor Chevron Canada Limited undertakes any obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. 2

3 Chevron in Canada Celebrating over 75 years in Canada positioned from Coast to Coast to Coast Responsibly developing Canada s energy resources for over 75 years Focused on frontier regions and emerging unconventional resources Global capability in LNG development, marketing and transportation 3

4 Chevron LNG Project Experience An established global leader in integrated, multi-partner gas projects Northwest Shelf LNG (Australia) Exporting LNG since 1989 (co-venturer) Angola LNG 5.2 MTPA from gas associated with oil production 1 st LNG achieved in 2013 Gorgon (Australia) One of the world's largest natural gas projects Largest single resource development in Australian history ($A52 billion) 3 train 15.6 MTPA plant on Barrow Island, with potential for 2 more trains 1 st LNG in 2015 Wheatstone (Australia) Chevron-Apache partnership 2 train 8.9 MTPA LNG plant 1 st LNG in

5 Momentum of the Kitimat LNG project has accelerated under the new Apache-Chevron partnership Apache-Chevron Kitimat LNG transaction announced December 24, %-50% joint venture Chevron assumed operatorship of downstream on July 1, 2013 (Pacific Trail Pipeline, Kitimat LNG Plant) Apache continues as upstream operator Apache has a proven record in finding and developing shale gas resources Leverages Chevron s global major project and LNG marketing experience Builds on the Apache-Chevron Wheatstone LNG project in Australia 5

6 Kitimat LNG Overview Video 6

7 Kitimat LNG Strengths Potential to be the 1 st LNG Project of scale in Canada Common Chevron-Apache joint venture through entire value chain (resource to market) Operator model leverages both Chevron and Apache capabilities World class resource at Horn River & Liard Haisla and First Nation Limited Partnership Benefits Agreements Environmental and export certificates in place Experienced project team from recent LNG & Canadian mega projects LNG marketing and shipping expertise Substantial early works completed in advance of Final Investment Decision 7

8 Kitimat LNG Plant Status Focus on reducing project risks and uncertainties, and developing a definitive cost, schedule and execution plan Rio Tinto Alcan Forest Service Road Bish Forestry Service Road (FSR) > 40% complete Construction Camp > 40% complete Open in November bed camp Deep Soil Mixing (foundation stabilization) complete EPC contract awarded Kitimat LNG Plant Site 8

9 Kitimat LNG Plant - EPC Contract Another positive step forward Engineering, Procurement and Construction (EPC) contract awarded to JGC/Fluor joint venture on January 13, 2014 Includes liquefaction process facilities, utilities and off site facilities Current Early Works will transition into EPC contract EPC contractor selection does not represent a final investment decision (FID) 9

10 Pacific Trail Pipeline 2014 Key Activities Complete pipeline and compressor station engineering Award mainline contracts Obtain key permits & land agreements Install temporary camps Complete planned 2014 early works (clearing, roads, etc.) Develop overall execution plan 10

11 Our Commitment Chevron has a vital obligation to ensure BC s energy resources are developed in a safe and responsible manner Our goal is incident free operations - no harm to people or the environment Build long-term, beneficial partnerships Employ people from First Nations and local communities Train workers to world class standards Build capacity and support First Nations / local businesses Contribute to the creation of stronger communities where we operate

12 Kitimat LNG / Pacific Trail Pipeline Providing Benefits to First Nations Today First Nations Limited Partnership (FNLP) Agreement with 15 First Nations along the PTP route Haisla Benefits Agreement for the Kitimat LNG Plant Significant Haisla and FNLP member benefits to date: Financial considerations Training (Pacific Trail Pipeline Aboriginal Skills Employment Partnership - PTP ASEP) Employment Contracts Environmental studies and monitoring Capacity funding 12

13 Kitimat LNG / Pacific Trail Pipeline Providing Benefits to First Nations Today Kitimat LNG Plant 48% of the construction spend to date has been awarded to Haisla Nation businesses Haisla employment 14% of construction hours worked (65 people) Pacific Trail Pipeline 76% of the total construction spend has been awarded to First Nation businesses First Nations involvement is 54% of all hours worked so far $75 million in contracts to businesses who are members of the First Nations Limited Partnership through the end of

14 Kitimat LNG / Pacific Trail Pipeline Benefits for all British Columbians Kitimat LNG has the potential to be the largest capital investment in an energy project in Canadian history B.C. Government will be by far the largest beneficiary of the Kitimat LNG project Benefits now and for decades: Significant investment benefitting businesses, communities and individuals New economic and employment opportunities Royalties and taxes 14

15 Kitimat LNG Development Considerations Current focus areas prior to a Final Investment Decision (FID) Firm LNG sales agreements Finalize Upstream, Plant & Pipeline Design & Execution Plan (cost and schedule certainty) Gaining additional First Nations support Clear, competitive fiscal framework 15

16 Thank You Questions? Kitimat LNG, Bish Cove 16

17 Appendix Premier s B.C. Natural Resource Forum Rod Maier, Chevron Canada Limited January 23, 2014

18 Kitimat LNG Overview Upstream & Pipeline Developing and delivering BC natural gas for LNG export World-Class Upstream Resource 220,000 acres - Horn River Basin 424,000 acres - Liard Basin Sufficient resource to supply Kitimat LNG Transportation from Horn River and Liard to PTP via 3rd party pipelines Apache to operate Pacific Trail Pipeline 42, 480km natural gas pipeline from Summit Lake to Kitimat Key environmental approvals in place First Nations Limited Partnership Agreement with 15 of 16 First Nations along route Chevron to operate 18

19 Kitimat LNG Plant A potential world-class LNG Facility in BC Two-trains, 11 million tonnes per annum (MTPA) capacity 2 x 190,000 m3 LNG tanks 20-year export license in place Key federal and provincial environmental approvals in place Haisla Benefits Agreement in place (on Haisla land) Extensive early works site preparation underway Chevron to build and operate 19