214 Fall Customer Meeting WELCOME The Hotel Hershey September 24 26 Today s Agenda Welcome Rich Paglia Operations Update Shamus Donahoe The Last One Picked Dave McGillivray Break ProjectPermitting Permitting Pat Hester New Pipeline Development Close & Afternoon s Activities Bobby Huffman Rich Paglia Laura Townsend 214 Fall Customer Meeting 2 1
214 FALL CUSTOMER MEETING THE HOTEL HERSHEY SEPTEMBER 24 26, 214 Operations Update Shamus Donahoe Manager, Operational Balances Spectra Energy U.S. Transmission Map Miles of Pipe 13,297 Number of Compressor Stations 129 Total Horsepower 2,147,488 214 Fall Customer Meeting 4 2
Operations Update Review of Northeast Region Summer Flows Evolving Flow Trends Storage Operations 214 Fall Customer Meeting 5 Texas Eastern Transmission Zones M2/M3 Monthly Deliveries 16, 14, 12, 1, 29.3% 27.6% 22% of Total 47.7% 48.6% 24% of Total 36.3% 23.8% 26% of Total 4.6% 27.2% 26% of Total Mdth 8, 6, 4, 2, May Jun Jul Aug Prev 5yr Avg Pwr 213 Pwr 214 Pwr Prev 5yr Avg Non Pwr 213 Non Pwr 214 Non Pwr 214 Fall Customer Meeting 6 3
Texas Eastern Transmission Zones M2/M3 Power Plant Monthly Deliveries 4, 35, Prev 5yr Avg 213 214 3, 25, 7.% 29.8% 3.2% 1.% 36.4% 13.1% Mdth 2, 34.9% 52.3% 15, 1, 5, May Jun Jul Aug 214 Fall Customer Meeting 7 Texas Eastern Transmission M2/M3 Power Plant Loads vs. CDD May Aug 1,6, 1,4, 1,2, 1,, Dth 8, 6, 4, 2, 2 15 1 5 5 1 15 2 25 3 CDD 213 214 Curve Fit (Prev 5 yr Avg) Curve Fit (213) Curve Fit (214) 214 Fall Customer Meeting 8 4
Texas Eastern Transmission M2/M3 Top 25 Summer Season 6 5 7 8 6 18 7 2 7 14 7 1 8 2 6 19 6 17 7 9 8 27 7 16 7 7 6 12 8 26 8 8 7 1 6 25 8 15 8 5 8 28 8 25 8 7 8 19 7 15 7 11 4 MDth/d 3 2 1 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 2 21 22 23 24 25 214 214 Fall Customer Meeting 9 Texas Eastern Transmission M2/M3 Power Plant Top 25 Summer Season 16 14 6 18 7 13 7 14 7 9 6 17 7 1 8 25 7 12 7 11 8 26 7 31 12 1 MDth/d 8 6 4 2 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 2 21 22 23 24 25 27 21 211 212 213 214 214 Fall Customer Meeting 1 5
Texas Eastern Transmission M2/M3 Power Plant Deliveries 14,, May August of Each Year 12,, 1,, Dth 8,, 6,, 4,, 2,, 214 212 213 211 21 29 27 28 26 22 25 24 23 1999 21 2 214 Fall Customer Meeting 11 Algonquin Gas Transmission Monthly Deliveries 45, 4, 35, 3, 25, 2.7%.3% 38% of Total 19.% 4.7% 45% of Total 29.4% 4.2% 46% of Total 23.3% 12.3% 46% of Total Mdth 2, 15, 1, 5, May Jun Jul Aug Prev 5yr Avg Pwr 213 Pwr 214 Pwr Prev 5yr Avg Non Pwr 213 Non Pwr 214 Non Pwr 214 Fall Customer Meeting 12 6
Algonquin Gas Transmission Power Plant Monthly Deliveries 2, 18, 16, Prev 5yr Avg 213 214.% -7.% 17.1% 13.4% 15.9% 14, 12, 26.8% 28.8% 22.8% Mdth 1, 8, 6, 4, 2, May Jun Jul Aug 214 Fall Customer Meeting 13 Algonquin Gas Transmission Top 25 Summer Days 18 16 14 7 23 7 14 7 2 7 1 8 5 8 25 7 3 5 28 8 27 8 4 7 15 7 22 7 9 12 MDth/d 1 8 6 4 2 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 2 21 22 23 24 25 211 212 213 214 214 Fall Customer Meeting 14 7
Algonquin Gas Transmission Power Plant Top 25 Summer Days 9 7 14 8 7 7 23 7 2 8 25 7 1 8 27 8 26 7 13 6 MDth/d 5 4 3 2 1 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 2 21 22 23 24 25 211 212 213 214 214 Fall Customer Meeting 15 Algonquin Gas Transmission Power Plant Deliveries 8,, May August of Each Year 7,, 6,, 5,, Dth 4,, 3,, 2,, 1,, 212 214 213 211 21 27 26 22 25 28 24 29 23 1999 21 2 214 Fall Customer Meeting 16 8
Algonquin Gas Transmission Gas Fired Power Generation Dynamics 1 Peak Demand vs. Firm Contracted Capacity 9 8 824 MDth/d 7 6 5 599 4 3 2 1 1 *16.7% Summer Peak Winter Peak Contracted * Generators Winter 13/14 Firm Capacity vs Historical Winter Peak Flow 214 Fall Customer Meeting 17 Algonquin Gas Transmission Power Plant Loads vs. CDD May Aug 9, 8, 7, 6, 5, Dth 4, 3, 2, 1, 25 2 15 1 5 5 1 15 2 25 3 CDD 213 214 Curve Fit (Prev 5 yr Avg) Curve Fit (213) Curve Fit (214) 214 Fall Customer Meeting 18 9
Algonquin Gas Transmission Power Plant Loads vs. EHDD Nov Feb 7, 6, 5, 4, Dth 3, 2, 1, 1 2 3 4 5 6 7 EHDD 1112 Winter 1213 Winter 1314 Winter Curve Fit (1112 Winter) Curve Fit (1213 Winter) Curve Fit (1314 Winter) 214 Fall Customer Meeting 19 Operations Update Review of Northeast Region Summer Flows Evolving Flow Trends Storage Operations 214 Fall Customer Meeting 2 1
Texas Eastern Transmission Marcellus Shale Supply Growth 4,, 3,5, 3,, 2,5, Dth 2,, 1,5, 1,, 5, J 1 A 1 J 1 O 1 J 11 A 11 J 11 O 11 J 12 A 12 J 12 O 12 J 13 A 13 J 13 O 13 J 14 A 14 J 14 214 Fall Customer Meeting 21 Texas Eastern Transmission Supply Diversity (MDth/d) Operator Sep 11 Aug 12 Sep 12 Aug 13 Sep 13 Aug 14 TE Marcellus Production 818 1,77 3,39 REX Clarington 43 295 14 Lebanon Area (ANR, PEPL, REX, TX Gas) 251 13 143 TETLP Mainline (traditional) 76 593 581 24 6 59 24 3 936 441 23 TETLP Market Zones Supply 3,174 3,288 3,914 214 Fall Customer Meeting 22 11
Texas Eastern Transmission Berne Station Load Duration Sep Aug 3,, 2,5, 2,, C13_14 C12_13 C11_12 1,5, 1,, Dth 5, 5, 1,, 1,5, 1 31 61 91 121 151 181 211 241 271 31 331 361 Days 214 Fall Customer Meeting 23 Texas Eastern Transmission Egypt Station Load Duration Sep Aug 2,5, 2,, 1,5, C13_14 C12_13 C11_12 1,, Dth 5, 5, 1,, 1 31 61 91 121 151 181 211 241 271 31 331 361 Days 214 Fall Customer Meeting 24 12
Texas Eastern Transmission NJ NY Capacity Utilization 8, NJ NY Lease Receipt Manhattan Delivery NJ NY Capacity 7, 6, 5, Dth 4, 3, 2, 1, 11/1/13 12/1/13 1/1/14 2/1/14 3/1/14 4/1/14 5/1/14 6/1/14 7/1/14 8/1/14 214 Fall Customer Meeting 25 Texas Eastern Transmission Customer Storage Inventory 1% TETLP Customer Balances run on 9/13/14 9% 8% 8% 7% 6% 5% 4% 3% 2% 1% % 5 Year Range (29 213) Average 214 213 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 214 Fall Customer Meeting 26 13
Algonquin Gas Transmission Supply Diversity (MDth/d) Operator Sep 11 Aug 12 Sep 12 Aug 13 Sep 13 Aug 14 Texas Eastern 341 357 357 Tennessee Mahwah h 24 242 255 Transco 64 42 31 Columbia Hanover 88 65 27 Millennium 399 476 567 West End Supply 1132 1182 1237 Maritimes 66 47 91 Everett 49 1 1 Northeast Gateway Tennessee Mendon 86 124 12 East End Supply 21 181 23 214 Fall Customer Meeting 27 Algonquin Gas Transmission Stony Point Station Load Duration Sep Aug 1,6, 1,4, 1,2, C13_14 C12_13 C11_12 1,, Dth 8, 6, 4, 2, 1 31 61 91 121 151 181 211 241 271 31 331 361 Days 214 Fall Customer Meeting 28 14
Operations Update Review of Northeast Region Summer Flows Evolving Flow Trends Storage Operations 214 Fall Customer Meeting 29 Spectra Energy Natural Gas Storage 325Bcf across 9 fields 214 Fall Customer Meeting 3 15
W13 14 Peak Southern Storage Days Storage Field Unit Jan 6 Jan 7 Jan 8 Total Nom FSS 453,822 638,378 561,621 1,653,821 Bobcat PALs/IT 25,43 551,8 225,9 1,27,212 Subtotal 74,225 1,19,178 786,63 2,681,33 FSS 89,462 1,1,88 619,16 2,438,656 Egan PALs/IT 396,191 232,733 217,878 411,46 Subtotal 1,25,653 1,242,821 41,228 2,849,72 Moss Bluff FSS 366,52 439,249 415,284 1,754,36 PALs/IT 435,546 324,56 67,439 582, Subtotal 82,48 763,89 482,723 2,336,36 Totals 2,711,926 3,196,88 1,67,581 7,579,315 214 Fall Customer Meeting 31 Flexibility of Storage Services 2,, 1,5, 1,, 5, Mid February: High Injections (5,) (1,,) 1 Nov 13 8 Nov 13 15 Nov 13 22 Nov 13 29 Nov 13 6 Dec 13 13 Dec 13 2 Dec 13 27 Dec 13 3 Jan 14 1 Jan 14 17 Jan 14 24 Jan 14 31 Jan 14 7 Feb 14 14 Feb 14 21 Feb 14 28 Feb 14 7 Mar 14 14 Mar 14 21 Mar 14 28 Mar 14 (1,5,) (2,,) ) (2,5,) (3,,) (3,5,) Solid Withdrawals Followed by heavy withdrawals 214 Fall Customer Meeting 32 16
214 FALL CUSTOMER MEETING THE HOTEL HERSHEY SEPTEMBER 24 26, 214 The Last One Picked Dave McGillivray 214 Fall Customer Meeting BREAK The Hotel Hershey September 24 26 17
214 FALL CUSTOMER MEETING THE HOTEL HERSHEY SEPTEMBER 24 26, 214 IncreasingObstacles to Pipeline Permitting Patrick Hester Associate General Counsel The Current Trend Why is pipeline permitting becoming more difficult? ff FERC State and Federal Agencies NGOs Landowners Politics 214 Fall Customer Meeting 36 18
Time to Process FERC Certificate Applications Application Date Protests, policy issues and/or major construction since 29 Sample of recent contested projects in the Northeast Average 12+ months Average 15+ months Certificate Order Certificate Order Lag between requested certificate date at initiation of Pre filing and actual certificate issuance date Requested Order Average 3+ months Certificate Order 214 Fall Customer Meeting 37 Recent Northeast Projects with Opposition Project Facilities State Application to Certificate TE/AGT NJ NY* CP11 56 2 miles of pipe NJ, NY 18 mo. Tennessee NE Upgrade* 4 miles of loop PA, NJ 14 mo. CP11 161 Millennium Minisink* CP11 515 1 compressor station NY 12 mo. Central NY MARC I* CP1 49 39 miles of pipe NY 15 mo. Columbia Line MB** CP13 8 21 miles of pipe MD 13 mo. Williams Constitution*** 125 miles of pipe NY 19 mo. est. CP13 499 *FERC order appealed to U.S. Circuit Court of Appeals ** FERC order issued in November, 213 but NTP not issued until June due to outstanding permits ***NTP could take 12+ months after FERC order due to NYDEC survey requirements 214 Fall Customer Meeting 38 19
Reasons for Longer FERC Processing Times Increased public opposition More sophisticated NGOs Higher likelihood of rehearing/ appeal Workload Additional reason More comments More issues New issues Social media Wellfunded/wellrepresented Sierra Club EarthJustice Conservation Law Foundation Delaware Riverkeeper More time addressing issues for complete record More time drafting orders 3 cases this year in DC Circuit Court of Appeals More projects being filed More EIS reviews Increased agency participation and changing agency requirements 214 Fall Customer Meeting 39 Other Changes/Trends at FERC Longer/extended comment periods Additional scoping meetings Requesting more detailed info from applicant Inconsistencies with other agencies Requesting detailed info earlier in process Other permits being delayed will delay NTP Other permits being contested/appealed can delay NTP 214 Fall Customer Meeting 4 2
Recent Permitting Issues with Other Federal/State Agencies Incomplete applications Requirement for complete field surveys Lack of sufficient i details dtil Changing implementation of existing regulations Disagreement on route or wetlands/stream crossings Staffing constraints Inconsistencies between different offices of same agency Treatment of recently proposed endangered species Migratory birds/tree clearing Appeals of federal/state permits 214 Fall Customer Meeting 41 Massachusetts Permitting Overview Activity Next Step Possible Delays MEPA Certificate Conservation Commissions issue Orders of Conditions Section 41 Water Quality Certificate Army Corps Section 44 Permits FERC Notice to Proceed Requires FERC EIS Sec. of EOEEA must issue certificate of adequacy in 7 days Can be appealed to DEP Requires MEPA Certificate and non appealable Orders of Conditions Can be appealed to DEP Requires Section 41 WQC Requires Section 41 WQC and Section 44 permit Significant delay possible if supplemental FEIR required 3 12 months for DEP appeal 3 12 months for DEP appeal 214 Fall Customer Meeting 42 21
NGOs Active In Legal/Regulatory Proceedings National NGOs Organization Proceeding Regulatory Group Sierra Club Center for Biological Diversity EarthJustice MARC I TRO/Appeal NJ NY Expansion Appeal Tennessee NE Upgrade Appeal LNG Rehearings ACOE NWP Challenges Keystone Presidential Permit Keystone NWP Challenge Ruby Appeal MARC I Appeal Cove Point 2nd Circuit DC Circuit DC Circuit FERC 1th District Dept. of State DC District 9th Circuit 2nd Circuit FERC 214 Fall Customer Meeting 43 NGOs Active In Legal/Regulatory Proceedings Regional/Local NGOs and Others Organization Proceeding Regulatory Group Regional/Local NGOs Damascus Citizens for Sustainability MARC I Appeal 2nd dcircuitit Delaware Riverkeeper Tennessee NE Upgrade Appeal DC Circuit NJ Highlands Coalition Tennessee NE Upgrade Appeal DC Circuit Minisink Residents for Environmental Preservation and Safety Millennium Minisink Appeal DC Circuit Myersville Citizens to Dominion Allegheny Supply Preserve a Rural Community Appeal DC Circuit Sane Energy/No Gas Pipeline NJ NY Appeal DC Circuit Others Municipalities Native Americans 214 Fall Customer Meeting 44 22
What Issues Are Being Raised/Contested? Primarily National Environmental Policy Act ( NEPA ) Issues: EA vs. EIS Scope of review Alternatives Segmentation Cumulative impacts Indirect impacts climate change, GHGs, induced production Purpose and need Environmental justice Failure to take a hard look at individual issues noise, radon, cyber security, safety, wetlands impacts, etc. 214 Fall Customer Meeting 45 NEPA Litigation in General ~5, EAs ~5 ~125 ~45% & 35 EISs EISs issued NEPA cases filed annually in federal courts issued by U.S. by FERC annually agencies annually case wins by NGOs in federal court Court District Court Court of Appeals Statistics 59% if D judge 17% if R judge 75% if 3 Ds on panel 11% if 3 Rs on panel NOTE: DC Circuit Court of Appeals is now 7 Ds and 4 Rs 214 Fall Customer Meeting 46 23
Recent NEPA Cases of Interest Coalition for Responsible Growth and Resource Conservation, et al. v. FERC 2nd Circuit No Gas Pipeline, et al. v. FERC DC Circuit Center for Biological Diversity, et al. v. BLM and USFWS 9th Circuit Delaware Riverkeeper Network, et al. v. FERC DC Circuit EarthJustice filed Emergency Motion for Stay one day after FERC denied rehearing Court initially granted a stay of FERC order Court removed stay after hearing but construction delayed for 2 weeks Narrow NEPA appeal on 2 hard look issues radon and cyber security Case dismissed for lack of standing no evidence of concrete injury caused by project Rehearing requested Challenged ESA Biological Opinion ( BO ) which failed to address impacts of mitigation and groundwater withdrawal Court found invalid BO, thus BLM permit/easement invalid Construction complete but remanded back to agencies NEPA challenge based on (i) improper segmentation and (ii) improper cumulative impacts analysis Case involved 4 individual projects which completely looped 183 miles of Tennessee Gas eastern leg system Court found all 4 projects were connected actions which require a single environmental review Functional, physical and financial interdependence Temporal overlap Court also found all 4 projects needed to be included in cumulative impacts reasonably foreseeable 214 Fall Customer Meeting 47 Future Legal/Regulatory Issues Climate change/ghgs Upstream production Segmentation/connected actions Cumulative impacts Alternatives/purpose and need Health effects of air emissions Land values Safety More challenges to non FERC permits/approvals Waters of the U.S. NOPR 214 Fall Customer Meeting 48 24
Legal/Regulatory Ramifications of NGO Opposition Delays in FERC Process FERC staff seeking more information Comments periods extended More time to issue Certificate order Changes in FERC process Connected actions Cumulative impacts Delays in start of construction TROs Challenge of other permits Increased risk to project cost/ schedule More delay than denial to date 214 Fall Customer Meeting 49 Constitution Pipeline Timeline Scenarios Current vs. Estimate Current Submit 7(c) Applic. Pre filing Request Jan, 213 Submit 7(c) Applic. Actual/ Projected June, 213 FERC Cert. Pre filing Request Nov, 213 Start construct Pre filing Request Apr, 214 In Service Pre filing Request Mar, 215 213 214 215 216 217 Estimate FEIS Oct, 214 FERC Cert. Jan, 215 Right ihof Complete Submit Receive Receive Entry wetland 41 41 44 Orders surveys Applic. Permit Permit May, July, Sept, Sept, Oct, 215 215 215 216 216 Start Construct Apr, 217 In Service Nov, 217 214 Fall Customer Meeting 5 25
214 FALL CUSTOMER MEETING THE HOTEL HERSHEY SEPTEMBER 24 26, 214 New Pipeline Development Bobby Huffman Director, Business Development Changing Dynamics Future Flows Traditional Flows Supply Traditional supply sources declining Dramatic and continued increase in Marcellus and Utica production Demand Overall demand continues to increase in Atlantic Canada and New England New demand emerging in areas of traditional supply in Texas, Louisiana and the Southeast Increases the need for additional pipeline infrastructure in the Northeast, South, and Gulf Coast 214 Fall Customer Meeting 52 26
U.S. Transmission: Execution Projects Ozark Conversion TEAM South Gulf Markets Expansion NEXUS U2GC OPEN Atlantic Bridge AIM TEAM 214 Kingsport Sabal Trail Salem Lateral Capacity Project (MDth/d) In Service TEAM South 3 3Q14 TEAM 214 6 4Q14 Kingsport 86 2H13/1Q15 OPEN 55 2H15 U2GC 425 2H15 Ozark Conversion 75, bpd 1H16 Salem Lateral 115 1H16 AIM 342 2H16 Gulf Markets 65 2H16/1H17 Sabal Trail 1, 1H17 Atlantic Bridge 175 3 2H17 NEXUS 1,5 2H17 214 Fall Customer Meeting 53 U.S. Transmission: Development Projects Midwest Expansion Gulf LNG / Industrials Stratton Ridge Exports to Mexico Access South Access Northeast Appalachia to Market Adair Southwest Originating gexpansion projects to new areas of demand Continued growth of U.S. gas fired power generation Gulf Coast representing 2+ Bcf/d of new industrial and export opportunities Opportunity In Service Adair Southwest Project 2H 217 Access South Project 2H 217 Access Northeast 218 219219 Appalachia to Market 218 Gulf LNG / Industrials 218 22 Exports to Mexico 218 219 Midwest and Southeast Expansions 217 219 Stratton Ridge 2H 219 214 Fall Customer Meeting 54 27
Northeast & New England Market Opportunities for both scalable, incremental expansions and system changing LNG export projects in region Appalachia to Market LDC & Power Atlantic Bridge AIM NEW YORK Access Northeast BOSTON Salem Lateral New LNG Facilities Execution Project In Service Capacity (MDth/d) AIM 2H16 342 Salem Lateral 1H16 115 Atlantic Bridge 2H17 2 3 Development Opportunity In Service Est. Capacity ty (MDth/d) Appalachia to Market 218+ up to 1, LDC 218+ 2+ Power 218+ 9+ LNG Export 219 2 5 2, Access Northeast 218 19 1,+ 214 Fall Customer Meeting 55 Meeting New England s Natural Gas Infrastructure Needs Maritimes & Northeast $9.1 AGT Citygate 1 BOSTON Texas Eastern Algonquin Maritimes & Northeast Millennium Iroquois Tennessee Gas Algonquin Texas Eastern NEW YORK $4.63 Market Zone 3 1,2 Algonquin is expandable by 1.5 Bcf/d 1.Average Monthly July 214 June 215 forward natural gas price ($/Dth) as of June 3, 214 2.M3 average trading at $.11 discount to Henry Hub 214 Fall Customer Meeting 56 28
Algonquin Incremental Market Expansion AIM Expansion Provide growing New England demand with access to abundant regional natural gas supplies Project Scope: CapEx: ~$1B Capacity: 342 MDth/d Customers: LDC affiliates of: UIL Holdings, Northeast Utilities, National Grid and NiSource Cities of Norwich and Middleborough Project Status: Expect FERC certificate 1Q15 Commence construction 2Q15 Estimated in service: 2H16 Preliminary Facilities Replacing segments of 26 with 42 pipe Modifications at 5 compressor stations 214 Fall Customer Meeting 57 Atlantic Bridge Moving abundant, economic supplies of natural gas from Marcellus & Utica to constrained New England markets Project Scope: CapEx: ~$9 MM Capacity: 175 MDth/d (with potential to 3 MDth/d) Customers: Late stage negotiations with various customers in New England and Atlantic Canada Project tstatus: t Estimated in service: 2H17 Preliminary Facilities New compressor station, upgrades of existing compressor stations and meter station modifications Pipeline looping and take up and relay 214 Fall Customer Meeting 58 29
Access Northeast BOSTON Algonquin s system is expandable by 1 Bcf/d in addition to AIM and Atlantic Bridge In service date as early as 218 Direct delivery to critical power plants MARCELLUS SHALE Texas Eastern Algonquin Maritimes & Northeast Millennium Iroquois Tennessee Gas NEW YORK Serving 6% of ISO New England s gas fired generation fleet 214 Fall Customer Meeting 59 Marcellus & Utica Supply 15 16 Bcf/d 35 3 25 Current Estimate 3 27 Bcf/d 5 23 Avg Estimate 2 15 1 5 Marcellus Est. Production Volumes (Bcf/d) 21 213 216 219 222 225 228 Utica Est. Production Volumes (Bcf/d) 35 25 2 15 1 211 214 217 22 223 226 229 Source: Various Consultants 214 Fall Customer Meeting 6 3
Texas Eastern Transmission Appalachian Shale Supply Interconnect Program UTICA MARCELLUS 64 Requests In Service & Under Agreement (requested tap & posted M&R capacity) Current Appalachian Shale Supply 21.4 Bcf/d 3.7 Bcf/d 42 In Service (posted M&R capacity) 11.5 Bcf/d 22 In Progress & Under Agreement (Scheduled 214 In Service) 9.9 Bcf/d Texas Eastern Appalachian Shale Supply Growth 4,, 3,5, 3,, 2,5, 2,, 1,5, 1,, 5, 21 211 212 213 214 214 Fall Customer Meeting 61 Texas Eastern Transmission Appalachian Supply Projects Gulf Markets NEXUS TEAM 214 Execution Project In Service Capacity (MDth/d) TEAM South 3Q 14 3 U2GC OPEN TEAM 214 4Q 14 6 Appalachia OPEN 2H 15 55 Adair to Market U2GC 2H 15 425 Southwest Gulf Markets 2H 16 65 NEXUS 2H 17 1,5 Access South Capacity Development Project In Service (MDth/d) TEAM South Adair Southwest 217 2 Access South 217 32 Appalachia to Market 218 1, Midwest 217+ 15+ Power Gen 217+ 3+ 214 Fall Customer Meeting 62 31
NEXUS Gas Transmission Designed to bring Marcellus & Utica gas to local distribution companies, power generators and industrial users in Ohio, Michigan, Chicago and Ontario Project Scope: Partnership with DTE Energy CapEx: $7 MM $1 B (SE s portion) Capacity: 1.5 Bcf/d Customers: LDCs and Marcellus & Utica producers Project Status: Open Season closed in August Commitments for 8% of 1.5 Bcf/d capacity Estimated in service: 2H17 Preliminary Facilities ~25 miles, 42 inch greenfield pipeline Multiple compressor and meter stations 214 Fall Customer Meeting 63 Adair Southwest Project Serve Appalachian shale producers with incremental transport to markets in the Midwest Columbia Gulf Adair Co. KY Berne Uniontown Adair Southwest Project Project Scope: Capacity: 2 MDth/d Customers: Appalachian shale producers Project Status: Open Season closed August 214 Precedent Agreements October 214 FERC Certificate Filing 2H15 Construction 217 Target In Service 2H17 Preliminary Facilities: Pipeline looping within existing ROW New compression units at existing compressor stations Various other modifications 214 Fall Customer Meeting 64 32
Access South Project Serve Appalachian shale producers with incremental transport to markets in the Southeast and Gulf Coast area Kosciusko Berne Uniontown Access South Project Project Scope: Capacity: 32 MDth/d Customers: Appalachian shale producers Project Status: Open Season closed August 214 Precedent Agreements October 214 FERC Certificate Filing 2H15 Construction 217 Target In Service 2H17 Preliminary Facilities: Pipeline looping within existing ROW New compression units at existing compressor stations Various other modifications 214 Fall Customer Meeting 65 Appalachia to Market Project Connecting abundant Appalachian supply to growing markets in the Northeast Power Gen & Industrial Project Scope: Up to 1 Bcf/d scalable project In Service as soon as November 218 Project Status: Open Season closed August 29 Determining scope from open season interest; developing project rates and timelines 214 Fall Customer Meeting 66 33
Gulf Coast and Mexico Demand Growth Incremental Demand Growth Incremental TX/LA/Mexico demand grows 12.2 Bcf/d by 222 Majority of demand from LNG exports, along with increasing power generation and industrial demand Piped Imports to Mexico Higher industrial and power demand in Mexico coupled with lower domestic production and high LNG prices will create increased need for U.S. gas Mexico's imports from the US U.S. expected to increase from 2.1 Bcf/d in 214 to 5.5 Bcf/d by 23, with ~2.6 Bcf/d from Southeast Texas Total gas demand in Texas & Louisiana estimated to be ~25 Bcf/d by 222 12 1 8 6 4 2 2 6 5 4 3 2 TX/LA Incremental Demand Growth (Bcf/d) Industrial Power LNG Exports Exports to Mexico Source: Wood Mackenzie 214 215 216 217 218 219 22 221 222 Regional Pipeline Flows to Mexico (Bcf/d) 1 ARIZONA CALIFORNIA 214 216 218 22 222 224 226 228 23 Source: Wood Mackenzie SOUTHEAST TEXAS N. MEXICO / W. TEXAS * TX/LA Exports to Mexico 214 Fall Customer Meeting 67 Gulf Coast Market Tremendous potential demand opportunities along the Gulf Coast BARNETT HAYNESVILLE Execution Capacity Project In Service (MDth/d) Gulf Markets 216 217 65 Stratton Ridge 219 5 Development In Capacity Opportunity Service (MDth/d) South Texas & 218 19 1,+ Mexico Expansion LNG & EAGLE FORD LNG Exports 218 2 1,+ Petrochem Power & Industrial 218 2 1,+ Facilities South Texas & Mexico Abundant shale supply Expansion opportunities Growth markets 214 Fall Customer Meeting 68 34
Southeast Market Our Southeast assets are well positioned to capture power and industrial demand growth WOODFORD Abundant shale supply Expansion opportunities Growth markets BARNETT HAYNESVILLE EAGLE FORD MARCELLUS/ UTICA Kingsport Sabal Trail Execution Project Capacity (MDth/d) In Service Kingsport 1H15 85 Sabal Trail 1H17 1,1 Development Opportunity Capacity (MDth/d) In Service SESH 214+ 45+ Power Gen 217+ 3+ 214 Fall Customer Meeting 69 Positioned to Serve our Customers Connected to abundant supplies Connected to high demand markets Proven ability to execute 214 Fall Customer Meeting 7 35
71 Today s Activities GOLF 11:3 am Lunch at The Circular 12:4 pm Shuttle to West Course meet in front of main hotel building 1: pm Golf West Course shotgun start 5:3 pm & 6: pm Two shuttle returns to The Hotel Hershey meet outside of the pro shop SPA or TOURS 11:3 am Lunch The Circular 12:45 pm Indian Echo Caverns and Hershey Tour meet in hotel lobby 1: pm Spa as scheduled LATER 6:3 pm Shuttle to Purcell Friendship Hall meet in hotel lobby 7:3 pm Reception and dinner Purcell Friendship Hall 9:3 pm Shuttle return to The Hotel Hershey 9:3 pm Hospitality suite open Harvest Tavern 214 Fall Customer Meeting 72 36
214 Fall Customer Meeting Have a great day! The Hotel Hershey September 24 26 Enjoy! 37