TransCanada – U.S. Pipelines Central ANR Pipeline, ANR Storage, and Great Lakes Gas

SNAME Conference – Great Lakes-Great Rivers Section February 13-14, 2013

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Natural Gas Basics – Players and Functions

1.   Exploration and Production (E&P, Producers)

2.   Midstream Operations (Gathering and Gas Processing)

3.   Pipeline Transmission (Interstate and Intrastate Pipelines)

4.   Gas Markets/Users (LDC’s, Energy Marketers, End Users)

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E&P/Producers

•  Producers lease or buy surface acreage and mineral rights to explore for, drill and produce natural gas (and/or oil)

•  Lands and Mineral Rights may be purchase/leased from Federal and State owned lands or private landowners

•  Primary function is to explore, find, drill and produce natural gas/oil and sell to various users or markets

•  Royalties are typically paid to the landowners based on gas or oil production sold

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Midstream Company Operations

•  Primary function is to gather production from multiple wells and provide a pipeline gathering system for aggregation of supply from various sources

•  Typically provide for centralized gas processing and separation of natural gas from liquids and contaminants

•  Impurities are removed and separated (water, Sulfur, CO2, and other matters)

•  Oil and NGL liquids (ethane, propane, butane, etc.) are separated and shipped to markets via barge, rail, truck or liquids pipelines

•  “Pipeline Quality” gas (nearly 100% Methane)is delivered to natural gas pipelines for subsequent transportation to market

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Pipeline Transmission Network

•  Interstate (FERC regulated) and Intrastate (State regulated) pipeline network delivers natural gas to user markets

•  Interstate Pipelines DO NOT BUY and RESELL NATURAL GAS

•  Primarily transporters of the gas owned/purchased by Shippers (customers) who hold capacity rights on the pipeline

•  Pipelines transport gas from “Point A” (Receipt Points) to “Point B” (Delivery Points)

•  Pipelines Interconnect with each other at points where their systems cross, essentially forming a “grid” network across the entire North American continent

•  Pipelines often provide gas storage and other ancillary services such as balancing services, etc. on behalf of Shippers

•  Pipelines are typically High Pressure (700-1400PSIG) and Large Diameter (24” to 42”) systems often with multiple parallel pipelines in the same corridor

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Great Lakes Gas Transmission and the Midwest/Northeast Pipeline Transmission Grid

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Natural Gas Markets and Gas Users

Local Distribution Companies (LDC’s/Utilities) – Distribution, sale and delivery of gas to local residential, commercial and industrial customers

•  State PSC regulated (Gas Sales and Rates for service)

Energy Marketing Companies – Purchase gas directly from producers and Resell to various customers

•  Often access multiple supply basins and hold capacity on multiple pipelines for gas transportation and delivery to customers

Direct End Users – Usually larger, more sophisticated gas users

•  Gas fired Power Generation, large scale industrials, LNG/CNG companies

•  Take gas directly from Pipeline due to higher pressure, gas capacity available, and economics (rather than paying for LDC service)

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TransCanada Pipelines - Great Lakes Region

•  TransCanada’s Geographic Alignment of owned pipeline infrastructure serving the Great Lakes Region

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TransCanada North American Pipeline Assets

GTN System

North Baja

Tuscarora

Alberta System

Proposed Alaska

Pipeline

Foothills/BC

Tamazunchale

Bison

Keystone Oil Pipeline

Keystone Expansion

Northern Border

ANR

Canadian Mainline

Proposed Mackenzie

Gas Pipeline

Great Lakes

Iroquois

TQM PNGTS

US Pipelines Central

Other Natural gas Pipelines

Proposed In Development

Oil Pipelines In Development

Gas Storage

• 35,500 miles of wholly owned natural gas pipeline

• Interests in an additional 7,000 miles of natural gas pipeline (partial ownership)

• 250 Bcf of regulated and 130 Bcf of non-regulated natural gas storage capacity

• Unparalleled connections from traditional and emerging gas supply basins to growing markets

• Average daily volume of approximately 14 Bcf/d

• Keystone oil pipeline* 1.1 million Bbl/d

•  * Phases 1 and 2 in operation; Phases 3 and 4 in development

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Linking Natural Gas Supply to Key Markets

•  The TC pipeline network taps into virtually every major North American natural gas supply basin and provides our customers with unparalleled access to premium markets and gas supply optionality

•  The vast TC pipeline network is also very well positioned to connect new sources of supply such as the shale gas reserves to growing markets

•  Shale gas access includes: Barnett, Fayetteville, Haynesville, Bakken, and Marcellus/Utica areas

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TransCanada - U.S. Pipelines Central

•  ANR Pipeline, 10,600 miles, capacity of 6 Bcf per Day

•  Great Lakes Gas Transmission, 2,100 miles, capacity of 2.3 Bcf per Day

•  ANR Storage, 250 Bcf of regulated natural gas storage capacity; all located within Central and Northern Michigan

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ANR Pipeline Company

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•  ANR Pipeline Company

•  Originates in the traditional

supply areas of TX/OK and

the Gulf of Mexico; traverses

15 states

•  10,600 miles of pipeline

•  Over 1 Million Compressor HP

•  Peak Day Capacity of 6 Bcf/d

•  Major Storage Operator (250

Bcf of Storage in Michigan)

•  Provides access to many new Shale gas supply Basins

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ANR Pipeline Company

• Major Interstate Deliveries

• Wisconsin • Michigan •  Illinois •  Indiana • Ohio • Ontario, Canada •  Joliet and Lebanon Hubs • SE and SW Area Markets • Numerous Other Pipeline

Companies

Michigan MichCon Consumers SEMCO MGU

ML3 CG&E DP&L Ohio Valley Ohio Gas Indiana Gas SIGECO Memphis

TVA

Wisconsin Wisconsin Gas Wisconsin Public Service Wisconsin Electric Alliant

SEML Interconnects Lebanon - TETCO, DTI, TCO Midwestern Gas Texas Gas Panhandle Eastern

SE Interconnects SNG, FGT, TGP Columbia Gulf Trunkline Transco Texas Gas Bridgeline Cypress

Chicago North Shore Peoples NICOR NIPSCO

SE Storage Egan Bobcat Pine Prairie

Northern Ohio East Ohio Columbia of Ohio

Storage 250 Bcf

Perryville/Delhi CenterPoint Gulf South Gulf Crossing MEP/SESH/LIG

SW Interconnects TransWestern CenterPoint Oneok Westex EPNG NNG

SWML Interconnects REX

Dawn

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Great Lakes Gas Transmission

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•  Originating at Emerson, Manitoba -

traverses Minnesota, Wisconsin,

and Michigan

•  Terminates at St. Clair, Michigan

with deliveries to TransCanada into

Dawn, Ontario (Port Huron/Sarnia)

•  2,100 miles; two 36” diameter,

974 Psig MAOP pipelines

•  14 compressor stations with

combined 450,000 hp

•  Peak capacity of 2.3 Bcf/d

•  Over 60 receipt and/or delivery

points including ANR Pipeline and

others

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Interconnects

In Minnesota •  Minnesota Energy Resources •  City of Duluth, MN

•  Otter Tail Power

In Wisconsin •  NSP/Xcel (Minneapolis)

•  Superior WL&P

In Michigan •  MichCon •  Consumers Energy

•  Detroit Edison •  Midland Cogeneration Venture

•  SEMCO •  WEPCo

•  Bluewater Gas Storage

•  Pipeline interconnects directly with TransCanada, ANR Pipeline, and other pipeline companies as well as various utilities and LDC’s located in:

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ANR and GLGT Pipeline’s Footprint Matches Up Well with Great Lakes Shipping

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Gas Supply & Storage Opportunities

Great Lakes Pipeline

ANR Storage

ANR Pipeline

LNG

•  Transport gas from Mid-continent, Gulf Coast, Rockies and new Shale Gas to Midwest markets

•  LNG supplies to storage, user markets or LNG/CNG terminals

•  Future Gas Storage Development

Barnett Shale

Woodford Shale

Fayetteville Shale

Denver Basin Piceance

Basin

Uinta Basin

Paradox Basin

San Juan Basin

Anadarko Basin

Ft. Worth Basin

Arkoma Basin

Appalachian Basin Illinois

Basin

Black Warrior Basin

Mississippi Salt Basin

WCSB

Michigan Basin

Gulf Coast Basin

Haynesville Shale

LNG

LNG

LNG

LNG

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Thank You