Tennessee Gas Pipeline Co, L.L.C. Northeast Energy and Commerce Association September 27, 2012
The Kinder Morgan System 4 th largest energy company in North America Enterprise value ~ $95 billion Largest natural gas network in U.S. 62,000 miles of natural gas pipeline Connected to every important U.S. natural gas resource play Largest independent transporter of petroleum products in U.S. Largest transporter of CO 2 in U.S. 2 nd largest oil producer in Texas Largest independent terminal operator in U.S. Only Oilsands pipeline serving West Coast 2
(KMP/EPB/KMI) Natural Gas Pipelines Segment Well-positioned connecting key natural gas resource plays with major demand centers Long-term Growth Drivers: Natural gas the logical fuel of choice Cheap, abundant, domestic and clean With El Paso acquisition, KM has an unparalleled natural gas network Sources natural gas from every important U.S. natural gas resource play Eagle Ford, Marcellus, Utica, Haynesville, Fayetteville and Barnett Connected to every major demand center in the U.S. Demand growth and shifting supply from multiple basins lead to: Existing pipeline / storage expansions New pipeline development Expand service offerings to customers LNG exports Acquisitions 3
Tennessee Gas Pipeline 13,800 Miles of Pipeline ~1,400,000 HP Compression 90 Bcf Storage capacity 12 Bcf Linepack capacity Connected to all major shale plays o Marcellus, Utica o EagleFord Shale Gas, Haynesville o Utica Shale Gas Canada New England Marcellus Shale Gas Haynesville Shale Gas Southeast EagleFord Shale Gas LNG Export Mexico 4
Northeast Shale Provides Growth Opportunities Marcellus Shale 38 Producer Interconnections 8.9 Bcf/d Receipt capacity 2.4 Bcf/d Avg. Daily Receipts (July) 39% all pipes 0.96 Bcf/d Placed in service 2012 TGP Superior access to Northeast Shale Utica Shale Gas processing required TGP well positioned to receive supply First wells drilled results strong 0.8 Bcf/d Receipt capacity Additional negotiations underway TGP Transport deals completed 0.45 Bcf/d UTICA MARCELLUS 5
Northeast Market Flow Trends Eastern Canada LNG Marcellus Supply Utica, REX, GoM, TX 6
TGP Throughput: Increasing TGP Throughput 2012 Year to date ~7.23 Bcf/d 18% higher than same period in 2011 Delivered 99.2% of all firm in-path gas daily Power generation drives load growth 6
Demand Growth: Power Increased Daily Power Demand on TGP TGP Power Demand Steady growth in power generation Less seasonality than in past (2012 vs 2010) Zones 5 & 6 represent 39% of TGP s 2012 power generation load 8
Demand Growth: Power Northeast Power Market Connected to TGP 10
TGP Power Generation Demand Seasonal (Dth/d) Northeast: NY, New England 500,000 450,000 600,000 400,000 500,000 350,000 300,000 400,000 250,000 300,000 200,000 150,000 200,000 100,000 50,000 100,000 0 2009/2010 2010/2011 2011/2012 0 2009 2010 2011 Winter Avg Daily Volume Summer Avg Daily Volume 10
Potential Gas Burn vs Firm Transportation November 2012 Total Potential Burn: 1,092,000 Dth/d Plants that hold firm transport: 6 of 13 Total Firm Transport: 260,000 Dth/d Total uncontracted: 832,000 Dth/d (76%) 10
Increased Utilization: Increasing Restriction Percentages * Prior to 300 Line Project Increased utilization into market area Increased restriction risk for non-firm service Firm service not impacted (100% reliable) Expansion capacity significantly reduces restriction percentages * 300 Line Project placed In-service - November 2011 12
TGP Committed to Northeast Project Updates ~ $1.3 billion - new projects ~ 1. 7 Bcf/d fully subscribed 300 Line project placed inservice on time Backlog projects on-schedule Developing new projects Project Capacity (MDth/d) Shippers In-Service Status 300L Project 350,000 EQT Energy Nov 1, 2011 In-service NSD 250,000 Cabot, Seneca, Anadarko, Mitsui Nov 1, 2012 Filed for Oct. 1 In-service Northampton 10,400 Berkshire, Bay State Nov 1, 2012 Testing faiclities MPP Project 240,000 Chesapeake, Southwestern Nov 1, 2013 FERC Order received NE Upgrade 636,000 Chesapeake, Statoil Nov 1, 2013 FERC Order received Rose Lake 230,000 South Jersey Res., Statoil Nov. 1. 2014 FERC Application to be filed Q4 2012 14
TGP s Northeast Project TGP Expansions to Date do not reach New England Northeast Project Strategic Supply Points Wright (TGP, IGT, Constitution) Marcellus & Utica wellhead Marcellus / Utica Pools Market Reach NY, MA, CT, RI, NH Mendon, MA; Dracut, MA LDC City Gates 2016-2018 In-Service 14
TGP Northeast Expansion WRIGHT Project Scope Capacity: 0.5 1.7 Bcf/d Supply: Marcellus Deliveries Upstate NY, New England; Wide market reach 16
TGP Northeast Expansion Key Commercial Terms Receipt Point Delivery Points Supply Access Volume Term Rate Structure Indicative Rate In-Service Date Wright, NY; Marcellus; Utica (1) Power Plants and LDCs on TGP s 200 line, (2) Mendon, MA (Algonquin) (3) Dracut, MA (Maritimes & Northeast Pipeline) TGP, Constitution, IGT 500 1,700 MDth/day Subject to Negotiation Negotiated, Fixed Rate Competitive market rates November 2016 2018; depending upon market need 17
Tennessee Gas Pipeline Co, L.L.C. Northeast Energy and Commerce Association September 27, 2012