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  • Changing Regional Midstream andChanging Regional Midstream and Transportation Developments

    Terry McGill Energy Summit 2009 Energy Market Challenges & Opportunities LSU Center for Energy Studies October 28, 2009

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  • LEGAL NOTICE

    Certain information during this presentation will constitute forward- l ki t t t Th ill i l d b t t il li it dlooking statements. These will include, but are not necessarily limited to, throughput volumes, financial projections, expansion or acquisition projects, external economics and competitive factors. These statements are based on certain assumptions made by managementstatements are based on certain assumptions made by management. Accordingly, actual results may differ materially from current estimates. You are referred to the Enbridge Energy Partners' SEC filings, including the annual Form 10-K, for a more detailed discussionfilings, including the annual Form 10 K, for a more detailed discussion of risk factors.

    2#2

  • Liquids Pipelines

    ENBRIDGE CONTINENTAL FOCUS

    Normal Wells

    Liquids Pipelines • Current mainline capacity of

    approximately 1.9 million barrels per day (bpd)

    Zama

    Fort McMurray Fort St. John

    Gas Pipelines • Alliance/Vector pipeline

    system • Enbridge Offshore (Gulf ofFort McMurray

    Seattle Saint John

    M t lClearbrook

    Edmonton

    Hardisty

    Cheecham • Enbridge Offshore (Gulf of Mexico)

    • Midcontinent Gathering & Midstream

    Saint JoPortland

    Casper

    Montreal

    Salt Lake

    Toledo

    Buffalo

    Ottawa

    Sarnia

    Superior Clearbrook

    Chicago

    Toronto Gas Distribution • Serving customers for 160

    years • Approximately 1 9 millionCity Patoka

    Cushing Wood River

    Gas Distrib tion

    Liquids Pipelines Gas Pipelines

    • Approximately 1.9 million customers

    Wind Farms • Four wind farms in-service

    3

    Houston

    Gas Distribution

    Wind Farms

    Four wind farms in service • Largest wind farm has 190

    mw capacity

  • Fundamentals that direct midstream Infrastructure

    • Supply – Where are the producers in esting and de eloping?investing and developing?

    • Demand – Where is the market for theDemand Where is the market for the gas?

    P i Wh th d bt i• Price – Where can the producer obtain the best cost margins for production and market price for the gas?and market price for the gas?

    4

  • SUPPLY: Top 25 Natural Gas Producing Countries

    20

    25

    15

    20

    D U

    C ED

    10

    20 08

    T C

    F PR

    O D

    0

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    5

    T

  • Supply: U.S. Lower 48 Gas Production by Type

    80

    Lower 48 Gas Production Forecast

    60

    70

    40

    50

    B cf

    p er

    D ay

    20

    30

    0

    10

    2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2020 2025

    6

    Conventional Tight Sands CBM Shale Gas

    Source: PIRA, October, 2009

  • SUPPLY: U. S. Lower 48 Shale Plays

    7

  • A number of new supply areas are emerging including Mid Continent and Gulf Coast

    8

  • Gas transmission patterns are shifting to accommodate supply shifts.

    Major Changes in Gas Flows 2008- 2015

    •WCSB

    0 8 B f/d

    •0.7 Bcf/d

    •Rockies •0.5 Bcf/d

    •0.8 Bcf/d

    •Marcellus 1 7 B f/d

    •Midcon / Gulf Onshore

    •Midcon / Gulf Onshore

    I d Fl

    •1.3 Bcf/d

    •4.8 Bcf/d•0.5 Bcf/d

    •East Coast LNG •0.5 Bcf/d

    •1.7 Bcf/d

    9

    •Increased Flow

    •Decreased Flow

    4.8 Bcf/d

    •1.9 Bcf/d

    •Southwest

    •GOM Offshore

  • Abundant supply is resulting in lower prices.

    Comparison of Consultants Average Henry Hub Forecasts

    12.00

    14.00 Comparison of Consultants Average Henry Hub Forecasts

    8.00

    10.00

    M M Bt u

    4.00

    6.00$/ M

    0.00

    2.00

    10

    2008 2009

  • Natural Gas Supply and Demand Imbalance

    • U.S. is supply long at rate of 1.7 Bcf/d

    • Storage is at record levels• Storage is at record levels.

    • Rig count has fallen by 48% since October 2008 but production fell by only 2% in same period.

    • Drilling in Haynesville is up 25%. HOWEVER

    • Drilling in Marcellus is up 59%.

    11

    Producers drill where cost margins allow for best return on investment.

  • Now the most active Shale Play

    Rig Counts in Shale Play AOI

    200

    140

    160 180

    200

    80

    100

    120

    20 40

    60

    0

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    9

    12

    Haynesville NW LA Fayetteville Woodford Barnett

  • Haynesville has enormous potential

    7.0

    Haynesville/Cotton Valley(LA) Production Estimate

    5.0

    6.0

    3.0

    4.0

    B cf

    /d

    0.0

    1.0

    2.0

    Base Case Estimated Growth

    13Data source: Bentek Energy, LLC

  • Low cost gas supply makes gas an attractive energy choice, creating opportunity for gas demand increases.

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    D

    G r P

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    •Source: Morgan Stanley

  • Regional Supply Areas could provide economic stimulus to Gulf Coast Industry

    • Natural Gas provides low cost feedstock.

    • Lower U.S. dollar value makes U.S.

    t dexport goods attractive.

    • Gas Supply such as Haynesville Shale

    id lHouston Chronicle, October 18, 2009 provides a close source and long term supply to industrial

    15

    supply to industrial consumers.

  • Industrial Facility Locations near Mississippi River and Gulf Coast

    LaCrosse Pipeline`

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    Industrial Facilities

  • New midstream infrastructure will be required to develop new supply regions

    17

  • New gas transmission assets will have a regional scope such as proposed LaCrosse Pipeline

    18

  • LaCrosse Status

    • Successful Non-binding Open Season CompletedOpen Season Completed

    • Greater than 1 BCF/D of Interest

    • Negotiating Preceden