Brent E. Kitchen

Wyoming Pipeline Authority Meeting

May 25, 2004

Piceance to Kanda Piceance to Kanda ExpansionExpansion

In the HeartIn the Heart

of the Rockiesof the RockiesIDAHO

UTAH

WYOMING

COLORADO

Evanston

Preston

OVERTHRUST

GREEN RIVER

UINTA

Rock SpringsSKULL CREEK

SAND WASH

PICEANCE

SAN JUANPARADOX

Long Beach

NEVADA

CALIFORNIA

Other pipeline system

Principal producing basins

Questar Pipeline system

Questar Gas system

Questar Gas cities served

Salt Lake City

Southern Trails

Overthrust

Eastern SectionWestern Section

Questar Pipeline

TransColorado

Piceance to Kanda Expansion

Northern System

Southern System

Clay Basin

Kanda

Greasewood

Piceance to KandaPiceance to Kanda

Open season from Friday, April 30 until

noon MDT on Wednesday, June 2, 2004

Capacity options from 300,000 to 450,000

Dth/d

Autumn 2006 anticipated in-service date

Planned FacilitiesPlanned Facilities

170 miles of 24-inch pipe Compression between 7,000 to 52,000 HP

– Depending on suction pressures and requested volumes

Open Season results will determine optimal design

Electronic Route Maps

Available on Request

Please contract your QPC

Marketing Rep

RatesRates300 MMCFD 450 MMCFD

ASSUME 1,000PSI SUCTION AT

GREASEWOOD

ASSUME 600SUCTION AT

GREASEWOOD

ASSUME 1,000 PSI

SUCTION AT

GREASEWOOD

ASSUME 600 PSI

SUCTION AT

GREASEWOOD

LEVELIZED

RESERVATION

RATE

($/DTH/MONTH)

$8.28337 $9.43920 $7.06670 $8.19212

100% LOAD

FACTOR RATE 1/($/DTH)

$0.275 $0.313 $0.235 $0.272

OTHER USAGE CHARGE, ACA, FUEL REIMBURSEMENT AND ANY OTHER APPLICABLE

CHARGES WILL BE IN ADDITION TO THE RESERVATION RATE.

1/ This rate includes Questar's usage fee of $0.00267 per Dth

Any additional questions regarding the necessary economic hurdle rates for the projectshould be directed to the marketing representatives listed above.Please contact your QPC Marketing Rep. with

questions regarding these rates

300,000 Dth/d 450,000 Dth/d

Potential Northern System Potential Northern System Receipt PointsReceipt Points

West of Kanda

– Any points, including but not limited to Green

River and Overthrust Basin production

East of Kanda

– Any points, including but not limited to

Desolation Flats and Dripping Rock May require additional pipe and/or compression

Potential Southern System Potential Southern System Receipt PointsReceipt Points

West of Greasewood

– Any points, including but not limited to Ferron

Coal bed Methane area, Uintah and Piceance

Basin production

East of Greasewood

– May require additional pipe and/or compression

OVERTHRUST

GREEN RIVER

UINTA

SKULL CREEK

SAND WASH

PICEANCEFERRON

Principal Basins OverthrustGreen RiverSkull CreekSand WashUintaPiceanceFerronSecondary BasinsPowder RiverWamsutterBig HornWind RiverSan Juan

Questar Pipeline System

Principal Producing Basins

UTAH

WYOMING

COLORADO

Potential Delivery PointsPotential Delivery Points

Kern River Gas Transmission Company Northwest Pipeline Corporation Colorado Interstate Gas Company Southern Star Pipeline Wyoming Interstate Gas TransColorado Gas Transmission Company Overthrust Pipeline Company

Potential Delivery Points Potential Delivery Points Cont’d.Cont’d.

Local Distribution Companies

– Questar Gas Company

– Public Service Company of Colorado

– Rocky Mountain Natural Gas

– Greeley Gas Company

Clay Basin Storage

Several existing and planned power plants

Advantages to WyomingAdvantages to Wyoming

Enhances Kanda as hub and pricing point

Promotes the production of Wyoming gas for

delivery into this new pipeline

Encourages the development of new facilities in

Wyoming (for example, Questar’s storage

projects)

Provides access to additional gas supplies for

southwest Wyoming gas consumers

Submission of BidsSubmission of Bids Bids are binding Must include the following:

– Volume (Dth/d) with desired receipt and delivery point(s)

– Max reservation rate that shipper will pay Usage, ACA, FGRP, and other applicable charges will be

additional– Minimum 10-year term

Must meet Questar’s economic hurdle rates Must be received by noon MDT on Wed., June

2, 2004

Bid Review ProcessBid Review Process

Bids ranked based on present value calculation (PVC) as follows:

(Monthly Reservation Charge) x [1-(1+ i)-n ] = Present Value

( Per Unit ) [ i ] Per Unit

Where: i = interest rate per month, i.e., overall rate of return divided by 12 months

n = term of the agreement, in months

Review and Notification ProcessReview and Notification Process

Priority given to bids that optimize capacity and operating efficiency

If equal PVC, capacity will be allocated based on date (not time) of bid receipt– Bids received on earlier dates will receive priority over

bids received on later dates– Later bids get any remaining capacity

Award determination and notification to bidders by July 15, 2004

Lynn Arnold (801) 324-2941

Brent Kitchen (801) 324-2117

Tom Myrberg (801) 324-2978

Mary Kay Olson(801) 324-5873

Martin Anderson (801) 324-2017

Brad Markus (801) 324-5663

Marketing TeamMarketing Team