2002-09-16 XP06432_7

Mackenzie Gas Project

Next Steps Toward aMackenzie Valley Natural Gas Pipeline

Taglu - 3 TCF Discovered 1971 100% Imperial Oil

Parsons Lake - 1.8 TCF Discovered 1972 75% ConocoPhillips Canada 25% ExxonMobil Canada

Niglintgak - 1 TCF Discovered 1973 100% Shell Canada

Significant Discoveries - Onshore Gas

Gas

Pipeline

Tuktoyaktuk

Ikhil

Parsons Lake

Niglintgak

Inuvik

Taglu

10 miles

20 km

Gas

Gathering

System

Common

FacilityXP06355b

Development Concept Overview

2002-11-05 XP06576

NormanWells

Fort Good Hope

Tulita

TsiigehtchicFort McPherson

ColvilleLake

Kugluktuk

Paulatuk

InuvikAklavik

NIGLINTGAK

Whitehorse

Great Slave Lake

Tuktoyaktuk

Great BearLake

80 miles

120 km

TAGLU

PARSONSLAKE

INUVIK COMPRESSIONFACILITY

NORMAN WELLSLIQUID RECOVERY& COMPRESSION

FACILITY

COMPRESSIONFACILITY

COMPRESSIONFACILITY

GatheringSystem

Natural Gasand Liquids

PipelineSystem

Natural GasPipelineSystem

Lutselk'eDettah

Wha Ti

Edzo

Rae

RaeLakes

Wekweti

N’Dilo

Nahanni Butte

DawsonCity

Hay River Reserve

Fort Resolution

Hay River

Yellowknife

Fort SmithSalt River

Déline

Fort Simpson

Wrigley

Fort Liard

Fort ProvidenceJeanMarieRiver

TroutLake

West PointKakisa

Enterprise

v

EaglePlains

• Canadian onshore gas, three anchor fields

• Mackenzie Valley Pipeline

• Proven technology

• Minimize the environmental footprint

• Producer capacity of 800-1000 MCFD

• Aboriginal capacity up to 400-500 MCFD

• Accessible to others

• Utilizes ullage in existing pipelines

+ liquids to Enbridge

+ gas to TCPL

Feasibility Study

Project Definition

Design and Construction

Operations

gas sales

• engineering studies• environmental

field work• public consultation• northern benefits

plans• regulatory

applications• regulatory review

process

• detailed design of facilities

• drill wells• purchase goods and

services• construct pipeline

and field facilities

• potential expansion

+ abandonment and reclamation

Complete

3 - 4 years

3 - 4 years

25+ years

Decision to prepare regulatory applications

Decision to construct

Mackenzie Gas Project - Phased Approach

• concurrently assess external matters

• assess natural gas markets

• assess reserves• little, if any,

field work

Project Definition Phase

Agreed on way to proceed while awaiting APG funding

Secured office space and began staffing project team with co-venturers

Broadened communications and consultation activities

opened representative offices in Fort Simpson, Norman Wells and Inuvik

Awarded engineering contract and began conceptual engineering

Initiated phased open season process with potential shippers

Continued collecting baseline environmental data

Developed Preliminary Information Package

Started development of benefits plans, access and related arrangements

Field work to study river crossings, permafrost, route refinement and granular sites

When Will Mackenzie Gas be Commercial?

Development can only proceed when all these conditions exist

• Northern parties must be supportive of development, and in agreement with its benefits

• Outlooks for natural gas markets must be favourable

• Discovered onshore natural gas reserves must be large enough, and certain enough

• Investor economics on a “standalone” basis must be competitive with other opportunities, and sufficient for the risks involved (gas reserves, costs, gas markets)

• Facility plans and designs must ensure safe, reliable and environmentally responsible operations

• Regulatory approvals must be obtainable in a timely manner

• Stable and favourable fiscal terms

• Pipeline investment costs must be financeable