LDC Gas Forum Midcontinent Alliance Pipeline:

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1 LDC Gas Forum Midcontinent Alliance Pipeline: Delivering Today / Focused on Tomorrow September 13, 2010 Tony Straquadine Government Affairs Manager

2 Forward looking statements and information Certain information contained in this presentation, including use of the words anticipate, expects, and expected to, constitute forward looking statements and information. Although Alliance believes that these statements are based on information and assumptions which are current, reasonable and complete, these statements are necessarily subject to a variety of risks and uncertainties including, but not limited to, future operating performance, regulation, economic conditions and fundamentals affecting the oil and gas producing and marketing industries. Should one or more of these risks or uncertainties materialize or fail to materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected LDC Gas Forum Midcontinent

3 Agenda Alliance Pipeline: - performance update Unconventional Gas Fundamentals: The rise of factory development of shale gas and tight sand s close to Alliance & available for Midwest delivery Montney in British Columbia and Alberta Bakken in North Dakota New Alliance services in the Chicago area LDC Gas Forum Midcontinent

4 Alliance Pipeline Ownership Structure 50% Enbridge Inc. o TSX:ENB / NYSE:ENB 50% Fort Chicago Energy Partners L.P. o TSX:FCE.UN Key Office Locations Alliance Pipeline Ltd. Calgary, Alberta Alliance Pipeline L.P. Eden Prairie, Minnesota Joliet, Illinois market deliveries LDC Gas Forum Midcontinent

5 Alliance Pipeline System Performance History: 10 years of safe operations 2,400 miles of 36 pipe 1.6 Bcfd capacity Bcfd contracted through 2015 Transported 5.7 Tcf since start up LDC Gas Forum Midcontinent

6 North American Natural Gas Current Playing Field Low gas prices are forecast for the foreseeable future Liquid (oil and NGL) plays are the focus of new drilling Largest reserve additions ever experienced in North America The disposition of supply has changed radically Initial production rates are up ten fold, break even costs are down significantly The deck has been reshuffled, prices and basis have collapsed What will keep gas in play? Unconventional gas is economical to produce Economic focus: Producer Netback vs. LDC s basis differential Changes in Market demand LDC Gas Forum Midcontinent

7 North American Shale Plays LDC Gas Forum Midcontinent

8 Western Canadian Sedimentary Basin (WCSB) Shale Gas Development Horn River Initial wells are prolific 500 million cubic feet per day of production by 2012 Good predictors of what is to come: Sovereign wealth funds taking investment positions New pipeline, field plant and NGL infrastructure coming forward Production is migrating from conventional WCSB to Montney Montney is very economic, despite distant from US markets 1,500 million cubic feet per day of production in 2012 AB and BC royalty regimes are favorable Sunk infrastructure will accelerate production LDC Gas Forum Midcontinent

9 North American Natural Gas Basins Breakeven Economics The full Montney - prolific and advantageous with NGLs $3.50 NGL pricing factors into the producer s gas gathering / infrastructure decisions $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $- Sand $6.12 $6.18 $6.39 Coal Bed Methane $5.70 Shale $4.56 $4.75 $3.25 $3.44 $3.50 $3.57 $3.70 $3.95 $2.73 (1) Source: Scotia Waterhouse analysis effective February Breakeven economics are subject to revision as new data on performance and cost become available. (2) Analysis assumes a US$60 WTI liquids price for plays with associated liquids LDC Gas Forum Midcontinent

10 North American Natural Gas Competitive Position Alberta in 2011 is the best opportunity with the proposed changes in royalty rates Texas just edges out Pennsylvania and Louisiana for top title in the USA. BC is not far behind. Note: land prices not included in evaluation Recent changes not included in E&P current capital plans due to budget cycles Source: Energy Navigator, Comparing North American Fiscal Regimes: Evaluating Alberta s competitive position with the revised royalty rates, June 8, LDC Gas Forum Midcontinent

11 North Dakota 4 th Largest Oil & Gas Producing State Bakken located in the Williston Basin overlapping Saskatchewan, Manitoba, Montana and North Dakota 50+ Bcf of recoverable associated gas reserves - liquids-rich at btu per cubic foot Pecan Pipeline deliveries to Alliance Pipeline since April 2010 with a waiver allowing over 1500 btu per cubic foot Source: U.S.G.S.(modified from Walker and other ) Capacity available on Alliance Pipeline LDC Gas Forum Midcontinent

12 North Dakota Production Rockin the Bakken Significant potential being proven from the Sanish / Three Forks horizons With the market favoring oil over natural gas the potential is huge Significant infill drilling potential Producers are still ramping up the learning curve Bakken Reserves: 4 Bbbl Oil 1.85 Tcf Gas & 148,000 Mbbl NGL Gas to Oil Ratio of 1 bbl to 1.0 Mcf 600,000 bbl/d 600,000 Mcf/d Estimated reserve life of 22 years LDC Gas Forum Midcontinent

13 North Dakota Natural Gas Production Alliance Pipeline Base Case Forecast MMcf/d Three Forks-Sanish Williams Ward Stark Slope Renville Mountrail McLean McKenzie McHenry Golden V. Dunn Divide Burke Bowman Bottineau Billings Source: Alliance Pipeline 2010 analysis of data from IHS Energy Enerdeq / North Dakota Division of Minerals Resources, Oil & Gas Division LDC Gas Forum Midcontinent

14 Proposed new: Alliance Chicago Exchange (ACE) Hub Chicago is evolving into a significant market hub With the new shale gas revolution Chicago will become more strategic Alliance is working to leverage interconnection of our header to downstream markets & other pipes with new services: Park and Loan Wheeling Pricing will be competitive: additional services are being developed LDC Gas Forum Midcontinent

15 ACE Hub : Delivery & Receipt Capacity Alliance Header Delivery Capability Alliance Contracted Deliveries Spare Station Capacity Meter Station Delivery Point Capacity Nicor NGPL 1, ,598 Vector 2, ,619 ANR 1, Midwestern Peoples Guardian 1, ,136 Total 7,500 1,988 5,512 Downstream Receipt Capability* Downstream Takeaway Capacity 2009 Average Utilization 2009 Spare Capacity Delivery Point Nicor NGPL 1,200-1,200 Vector 1,325 1, ANR 1, Midwestern Peoples 1, ,107 Guardian Horizon Total 7,405 2,568 4,837 Alliance, into interstates and Chicago citygates market indices, as reported in Platts Gas Daily, are very closely matched with 99.95% correlation over the past 5 years. *as reported by GPCM10Q2 Base Case

16 Alliance Pipeline s Joliet Deliver Header 36 pipe for psi MAOP Connectivity to 7 Pipes in the Chicago area Direct connection to Aux Sable Liquid Products 2.1 Bcf/d world scale fractionation / extraction facility 87,000 bbl/d of spec NGL products Can receive NGL mix by truck and rail Nicor Vector Guardian ANR People s NGPL LDC Gas Forum Midcontinent Midwest Gas

17 Closing Remarks Alliance continues to focus on the safe & efficient delivery of natural gas from our secure energy trading partners in Canada and the U.S. WCSB and the Bakken will continue to remain attractive as supply basins for gas for delivery to the Chicago marketplace Alliance offers competitive options to serve the energy markets in British Columbia, Alberta, Saskatchewan, North Dakota and the Midwest Thank you! LDC Gas Forum Midcontinent

18 Alliance Business Contacts Tony Straquadine Government Affairs Manager Direct: (952) Cathie Legge Manager, Customer Service Direct: (403) LDC Gas Forum Midcontinent

19 LDC Gas Forum Midcontinent