Alliance Pipeline 2013 LDC Gas Forum Chicago Terrance Kutryk President & Chief Executive Officer September 10, 2013
Forward Looking Information Certain information contained in this presentation constitutes forward-looking statements. The words anticipate, expects and expected to and similar expressions are intended to identify such forward-looking statements. Although Alliance believes that these statements are based on information and assumptions which are current, reasonable and complete, these statements are necessarily subject to a variety of risks and uncertainties including, but not limited to, future operating performance, regulation, economic conditions and fundamentals affecting the oil and gas producing and marketing industries. Should one or more of these risks or uncertainties materialize or fail to materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. 1
Presentation Outline ALLIANCE PIPELINE A different kind of company One Stop Solution Tioga Lateral Alliance Chicago Exchange New Services Framework 2
Alliance Pipeline A Different Kind of Company 3
Rich Gas Transport Capability Optimized to ship liquids-rich natural gas 1,120 Alliance vs. Other WCSB & Midwest Pipelines Transporting in excess of 100,000 bpd of NGL s Average heat content: Alliance pipeline: ~1100 Btu/cf Other WCSB & Midwest pipelines: ~1025 Btu/cf Btu/cf 1,100 1,080 1,060 1,040 1,020 1,000 980 APL Other Regional Pipelines Source: WCSB & Midwest Pipeline websites, Alliance website 4
The Alliance Value Chain System Capability 1.6 Bcf/d capacity from WCSB to Chicago 250 mmcf/d receipt capacity out of Bakken Reliability over 99% 5
Tioga Lateral Project Tioga Lateral Capacity = 126,400 Mcf/d Reduces expensive upstream processing facilities In service September 1, 2013 Moving Gas and NGLs to the Chicago Market 6
Natural Gas Production Growth Bakken North Dakota production grown over 450% since 2000 Alliance has approx. 250 mmcf/d of connectivity to the Bakken (ND) Capacity to flow 30% of current Bakken production North Dakota Associated Gas Production Forecast mmcf/d mmcf/d 1,400 1,400 1,200 1,200 1,000 1,000 800 800 600 600 400 400 200 200 0 0 ND Gas Production Tioga Lateral (126 mmcf/d) Prairie Rose (120 mmcf/d) Existing Infrastructure Capacity (260 mmcf/d) Source: IHS Enerdeq data, 2013 Alliance Forecast 7
Connected to Growing Supply Regions Forecast: Canadian production within 25 mile radius to grow another 30% by 2025 over 2010 levels ND Bakken production to grow another 37% by 2017 Alliance Canada & Bakken Regional Production Forecast Bcf/d 9.0 8.0 7.0 6.0 5.0 4.0 3.0 ND Bakken Production Within 25 miles of Alliance Upstream of Edmonton Sources: IHS Enerdeq, Alliance 2013 - Gas Pipeline Competition Model 8
Natural Gas Production Growth WCSB Production within 25 miles of Alliance has grown over 25% since 2001 while overall WCSB production has declined 18% 14.00 12.00 10.00 Production Within a 25 Mile Radius of Alliance Pipeline Rest of WCSB Gas activity 25 miles around Alliance Pipeline Bcf/d 8.00 6.00 4.00 BC AB 2.00 0.00 Sources: IHS Enerdeq, CAPP 9
Midwest Region Demand Growth Significant U.S. demand growth to occur Chicago/Midwest pricing continues to strengthen relative to other regions (Marcellus, AECO) 16 14 12 Bcf/d 10 8 6 4 2 0 Other Transport Power Industrial Commercial Residential Source: Wood Mackenzie Spring 2013 Long-Term View 10
Access to U.S./International NGL Markets is Critical NGL Infrastructure Significant excess supply NGL pipeline takeaway options exclusive to Alliance & Enbridge 500 AB + BC Ethane/Propane Supply & Demand Source: Alberta Energy Regulator, St-3, ST-98, BC Energy & Mines website 2012 kb/d 400 300 200 100 0 2007 2008 2009 2010 2011 2012 Production Demand 11
The Growing LNG Export Phenomenon Three U.S. DOE-approved re-export terminals Proposed LNG export terminals = new demand Market balance/pricing Source: FERC 12
ACE Hub Alliance Chicago Exchange ACE Hub Services and Connections: Enhanced Title Transfers Interruptible Wheeling (IW) Park and Loan (PAL) 13
Alliance s New Services Framework 2015 capacity now available New Services Framework includes: Predictable and competitive fixed tolls A suite of pipeline services A new Canadian trading pool, and Low cost rich gas transportation to premium downstream markets Effective: December 1, 2015 14
December 1, 2015 Service Alternatives Segmented Full Path Index Based FPS $/Mcf $/Mcf FRS $/GJ FDS 3-10 Years 2 Price Tiers Fixed Rates Canada 3-10 Years 2 Price Tiers Fixed Rates ATP U.S. $/GJ FDS 3-10 Years Canada Negotiated Index Based Rates Canada FT-1 $/Mcf U.S. 1-10 Years Fixed Rates FT-1 Title Transfer $/Dth U.S. 3-10 Years 2 Price Tiers Negotiated Fixed Rates FT-1 $/Dth 3-10 Years Negotiated Index Based Rates 1-10 Years Negotiated Fixed Rates ACE Hub ACE Hub Energy tolls converted @ fixed 41MJ/m 3 (1,100 Btu/cf). Assumes U.S. Shipper Declines Recourse Rate. ACE Hub SUMMARY DOCUMENT REFER TO PRECEDENT AGREEMENT FOR LEGAL TERMS AND CONDITIONS 15
Hydrocarbon Dewpoint (HCDP) Change Applying to change HCDP tariff specification from 14 F (-10 C) to 23 F (-5 C) Enable greater liquids-carrying capacity Will be the only long haul, natural gas pipeline shipping from Canada to U.S. operating at 23 F HCDP 16
Rich Gas Advantage Three commercial initiatives to optimize Alliance s NGL carrying capacity: Firm Rich Gas Service (FRGS) Shipper Paired Gas (SPG) Authorized Rich Gas Overrun Service (ARGO) FRGS SPG ARGO 17
Rich Gas Advantage Firm Rich Gas Service (FRGS) Allows shippers to flow gas >23 F (-5 C ) year round Surcharge priced at 1 / C/mcf in excess of 23 F (-5 C) Offered on a first-come, first-served basis FRGS SPG ARGO 18
Rich Gas Advantage Shipper Paired Gas (SPG) Allows an off-specification shipper to pair lean gas Alliance evaluates the pairing request and if possible facilitates the pairing Reduces need for processing facilities FRGS SPG ARGO 19
Rich Gas Advantage Authorized Rich Gas Overrun Service (ARGO) Allows shippers to flow gas > 23 F (-5 C) if Alliance can operationally accommodate those supplies Posted/offered daily to receipt shippers based on system capability Thermally optimizes pipeline throughput FRGS SPG ARGO 20
Closing Remarks Alliance Pipeline A Different Kind of Company One stop solution Alliance Chicago Exchange Tioga Lateral New Services Framework 21
Contacts Terrance Kutryk President & CEO Direct: (403) 517-6500 Email: terrance.kutryk@alliancepipeline.com Keith Palmer Senior Vice President & CFO Direct: (403) 517-6369 Email: keith.palmer@alliancepipeline.com Daniel Sutherland Vice President, Business Development Direct: (403) 517-6330 Email: dan.sutherland@alliancepipeline.com alliancepipeline.com 22