North American Oil and Gas Pipelines:

Redrawing the Map

27th USAEE/IAEE North American Conference
September 16 – 19, 2007

Stephen J.J. Letwin

Executive Vice President
 Agenda

„ Enbridge Overview

„ Crude Oil Pipeline Story

„ Natural Gas Pipeline Story

„ New Pipeline Construction Risks

2
 Energy Delivery
Liquids and Natural Gas
Inuvik • Liquids pipelines
Norman Wells • Gas Pipelines
• Gas Distribution

Zama
• Gathering &
Fort St. John Processing
Fort McMurray
• Wind Power
Edmonton
Hardisty • International
Seattle
Regina

Portland
Clearbrook Saint John
Superior Montreal
Ottawa
Casper Toronto
Salt Lake City Sarnia Buffalo
Chicago Toledo Spain
Kansas City

Patoka
El Dorado Wood Covenas
Cushing River
OCENSA

Bogotá
Liquids Pipelines
Houston
Gas Pipelines
Gas Distribution
3
Crude Oil Pipline Story

4
North American
Crude Oil Pipelines

5
Historical Flow Pattern

6
 Western Canadian Oil Production
Market Unconstrained Case

(000 BPD) (000 BPD)

6500 6,500
Historical Forecast
6000 6,000
5500 2007 CAPP Pipeline 5,500
Planning Case
5000 5,000
4500 4,500
2007 Potential
4000 4,000
3500 3,500
3000 Raw Bitumen 3,000
2500 2,500
2000 2,000
Synthetic Light
1500 1,500
Synthetic Heavy
1000
Pentanes Plus
Conventional Heavy 1,000
500 500
Conventional Light
0 0
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

7
Future Flow Pattern

-
-

+ 8
Liquids Strategy
Broadening Market Access
Norman Wells

Enbridge/Lakehead System

Other Pipelines

Refineries:
Zama Canadian Supplied
Fort McMurray No/Limited Cdn Supply
Tanker Port

Edmonton Hardisty

Puget Sound

Great Falls Clearbrook

Billings Superior Montreal
Mandan

Toronto
Salt Lake City Casper
Sinclair
St. Paul Buffalo
Detroit
San Francisco Cheyenne Chicago Toledo
Lima Canton
Denver McPherson Wood River Robinson
Bakersfield El Dorado
Coffeyville Patoka
Los Angeles Ponca City Catlettsburg
Cushing Tulsa
Memphis
Artesia Borger/Sunray Ardmore

El Paso Big Spring

Houston Port Arthur
Lake Charles
Texas City
Freeport New Orleans

Corpus Christi

9
 Liquids Strategy
Major Projects Proceeding
Major Projects Proceeding Cost In-Service
Contract Terminaling Contract Terminaling

Fort McMurray Hardisty (Upstream) $ 0.4B 2008

Stonefell (Upstream) $ 0.1B 2008
Edmonton
Regional Infrastructure Cushing (Downstream) $ 0.1B 2007
Hardisty
Other $ 0.2B 2007-09
Kerrobert Regional Infrastructure
Regina Athabasca $ 0.2B 2007
SOUTHERN LIGHTS
Cromer
REVERSED LINE 13 Waupisoo $ 0.5B 2008
SOUTHERN LIGHTS Gretna
Southern Access
LIGHT SOUR CRUDE
(new construction) Clearbrook Expansion $ 2.2B 2006-09
SOUTHERN LIGHTS Montreal
(new construction) Extension $ 0.4B 2009
Superior
Spearhead Expansion $ 0.1B 2009
Casper Toronto
Alberta Clipper $ 2.9B 2010
Buffalo
Lockport Sarnia
Detroit Southern Lights $ 1.4B 2010
Toledo
Flanagan Chicago Canton Line 4 $ 0.3B 2008
Contract Terminaling Wood
Lima

E AD River Total Capital $ 8.8B

RH
EA Patoka Catlettsburg
SP
li
ob

Enbridge Liquids System

y
nM

Cushing
lle
Va
xo

Southern Access
Ex

id
M
ne

Alberta Clipper
li
Cap

Corsicana
Southern Access Extension
Beaumont
Houston Spearhead Expansion
10
Natural Gas Pipeline Story

11
North American Gas Pipelines

12
 Natural Gas Supply Changes

+ +
Alaska Mackenzie

WCSB

Rockies

+
Increased Flow

+ Decreased Flow

+ +
Appalachia + Supply Increase
Midcon/
LNG Permian - Supply Decrease

+ + + Increased LNG
LNG
GOM
- + 13
Gas Pipelines Proposed/Under
Construction

Rocky Mountain Express

Midcontinent Express
Ozark Express
Gulf Grossing
Clarity
Others

14
 Gas Strategy
Asset Positioning
Inuvik

Alaska Mackenzie
Pipeline Delta

Fort St. John

Rabaska
Edmonton

Alliance
Pipeline

Quebec City

LNG
Toronto
Gas
Sarnia
Storage
Chicago
Kansas City
Vector Enbridge Inc.
Pipeline
Pipelines
Gas Distribution
Enbridge Energy Partners
East Texas New Orleans Enbridge Income Fund
Expansion Houston
Potential Projects
Neptune
Shenzi 15
LNG
Pipeline Project Risk

16
 North American Pipeline Construction

„ Potential Pipeline Requirements*

Miles of Pipe

Year 24" 30-36" 42-48" Total

2007 432 1434 929 2795
2008 453 1391 1356 3200
2009 80 852 639 1571

* Estimate as of Jan ‘07

17
 New Pipeline Project Risks

„ Supply/Demand
„ Construction costs
„ Environment
„ Competition
„ Regulatory
„ Operating

18
Supply: Drilling Linked to Pricing

US Gas Well Rig Count

1600 16

1400 14

1200 12

1000 10

800 8

600 6

400 4

200 2

0 0
Jan-01 J an-02 Jan-03 J an-04 J an-05 J an-06 J an-07

Lower 48 Gas Rigs Natural Gas Price

19
Future supply linked to continued
drilling

Typical Powder River Basin Natural Gas Decline Curve

1 2 3 4 5 6 7 8 9 10 11 12 13 14
Year of Production

20
 Construction Pressures

„ Steel
– High Chinese Demand

„ Pipe Mill Space

– 3,200 miles/year capacity for 24”+

„ Lay Costs
– Only 25 Spreads available

„ Right of Way
– Higher congestion, more vocal opposition

„ Workforce
– Retiring skilled labor not being replaced

21
 Risk Strategies

„ Strong project management

„ Joint Ventures

„ Long term agreements

„ Take or Pay Contracts

„ Legislative stability

22
North American Oil and Gas Pipelines:
Redrawing the Map
Stephen J.J. Letwin
Executive Vice President
Gas Transportation & international