Spectra Energy: Creating Opportunity through Natural Gas Liquids and Export. Gary Weilinger Vice President, Strategic Development and External Affairs

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1 Spectra Energy: Creating Opportunity through Natural Gas Liquids and Export Gary Weilinger Vice President, Strategic Development and External Affairs Peace River Regional District November 22, 2012

2 Safe, Reliable, BC-Based Operations Strong track record on executing growth Spectra Energy s $1.5B expansion program has created platform for next wave of investment N. Montney Expansion LNG Exports Station 2 Fort Nelson North Expansion Dawson Expansion Execution Completed: - Expanded gathering and processing capacity to serve Horn River basin and Montney growth - Horn River: 9 of 10 expansion projects now in service, new Fort Nelson North facility nearing completion - Montney: New Dawson Processing Plant open, expansions underway - Transportation pipeline expansions to move supply to markets - Station 2 emerging as a regional hub providing customers with supply diversity & market optionality $4 - $6B in expansion opportunities 2015+

3 MMcfd Number of Wells Grizzly Extension Pipeline Deactivation A response to upstream producer demand Conventional sour gas activity in the Grizzly Valley gathering and processing area has decreased and this trend is expected to continue in the short term Significant de-contracting of service capacity experienced since November 2011 through to November 2012; less gas flowing Raw gas production in the Grizzly Valley is forecasted to be reduced by approximately 150 MMcf/d in the next 3 years A ~49 km segment of the Grizzly Extension will be placed into deactivated mode in March 2013 to maintain pipeline integrity Historical GV Annual Average Raw Flows & Number of Gas Wells in GV Area Sour gas (deep) production Sweet gas (shallow) production New Producing Wells

4 North Montney Development Expansions Utilizing Existing Infrastructure to Increase Capacity Area growth is accelerating Providing North Montney customers with gathering, processing and pipeline take-away capacity Developing NGL projects Extraction, handling & transportation facilities 24 km of 42-inch transmission pipeline looping, near Beryl Prairie Planned re-activation of the Aitken Creek Gas Plant and additional compression 4

5 Dawson Liquids Extraction Project Shift to NGL-rich production areas Proposed 400 MMcf/d natural gas liquids (NGLs) extraction facility and a residue gas pipeline Extraction facility will receive rich gas containing NGLs from two sources: the adjacent Dawson Processing Plant and a nearby gas field 1.5 kms, 30-inch diameter, interconnecting sales gas pipeline will connect the dry sales gas to the Groundbirch Pipeline Products: two NGL products C5+ (condensate) and C3+ (primarily propane and butane) and dry sales gas Regulatory Context: B.C. Oil and Gas Commission (OGC) and the Agricultural Land Commission (ALC); Project Description to be filed with B.C. Environmental Assessment Office late November 2012 Timing: subject to the receipt of regulatory approvals, construction is scheduled to begin in Q with a targeted in-service date of Q Local benefits: will increase NGLs extraction capacity in northeast B.C. thereby adding value to local natural gas industry and contributing economic benefits to local communities 5

6 Fort St. John area NGL Infrastructure Opportunities Kobes Compression Project Additional 200 HP compression facilities at the existing Kobes Booster Station (near Wonowan) for raw gas transmission of up to 20 MMcf/d of sweet liquids rich gas Raw gas processed and liquids extracted at McMahon Plant (27 bbls/mmcf recovered) Plan to file NEB section 58 regulatory application end of November 2012; subject to regulatory approvals projected in-service September 2013 South Peace Pipeline Extension Assessing the feasibility of transporting an additional 65 MMcf/d of raw natural gas for processing at the McMahon Plant through a 4.8 kms extension of the South Peace Pipeline Studies and assessments in October 2012 to inform preliminary project scoping and engineering design If feasible, a NEB application will be made in February 2013; projected in-service Q4,

7 B.C. Infrastructure and Export Why Build a new Natural Gas System? New Natural Gas Supply British Columbia has enough gas to meet our own needs, and to export natural gas to new places looking for clean burning energy Jobs Moving natural gas to new places protects existing jobs in British Columbia, and will create new jobs for more people in more places Opportunities for Growth We want to take what we ve learned over the last 55-years working in B.C., add local and Aboriginal input, and build a sustainable natural gas sector in B.C. 7

8 New Natural Gas System Will Build BC Opportunities: Spectra Energy & BG Group New System a Natural Legacy Continuation of 55-year history of operations in BC Project Scope: ~ 850-km, 48-inch pipeline Opportunity for aggregation Up to 4.2 Bcf/d of natural gas transported to potential LNG plant Construction mid-decade, operations end of decade Conceptual route developed based on preliminary assessments of environmental, historical, cultural and constructability factors ~ one year of stakeholder input collected/reflected in planning to date; ongoing consultation program our priority 8

9 Proposed System Route Alternatives 9

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