The Great NorthernThe Great NorthernPipeline DebatePipeline Debate

Stephen J. WuoriStephen J. Wuori

Group Vice PresidentPlanning and Development

Arctic Gas Symposium

November 30, 2001Houston, Texas

Enbridge Midcoast Energy Inc. operates gas gathering, distribution and processing facilities in nine states

Enbridge:

North & South America

Northern Pipeline DevelopmentThe Bottom Line

Project economics must be positive and robust

The Core Producers will direct the development

Political / Social issues must be resolved

Either pipeline route can be effectively constructed and operated

Only one pipeline route will be developed in the near term

North American Natural Gas Reserves Northern

Frontier ArcticIslands

EasternCanada

Eastern US

Gulf of Mexico

Gulf Coast

US Heartland

Rockiesand West

WesternCanada

Base Map Source: Cambridge Energy Research Associates

Expected Regional Gas Balances and Flow Changes – 2000 to 2010

Net Change in Supply/Demand Balance (bcf/day)

Incremental Gas Flows (bcf/day)

XX

3.7

-0.7

1.3

1.56.3

0.3

0.8

.

2.1

1.1

-2.5

0.2

-2.5

-1.40.0

-0.8

0.4

0.5

-2.31.5 -2.2

0.1

-2.61.0

-0.7

1.5

1.2

0.2

4.2

4.2

1.90.6

0.5

0.8

Who’s Who and the Routes

Prudhoe Bay

Fort St. John

Inuvik

Norman Wells

Fort Simpson

W hitehorse

Zama

Fort McMurray

Northern RouteMackenzie Valley Pipeline Southern Route

Edmonton

Anchorage

Yellowknife

Fairbanks

CalgaryVancouver

Pt. Thomson

Alaska Gas Producers (AGP)

State of Alaska

Alaska Others

MD Core Producers(MD 4)

MD Explorers (MD Others)

NWT Others

Route Cost & Toll Comparison

Enbridge is route neutralSafety and environmental excellence is a baseline

requirement

Alaska to Lower 48 Market South North

Total Project Cost (US$billions) 17.2 15.1

Notional tolls (US$/mcf) 2.39 2.07

(Far North O&G Conference on Sept. 20, ’01)

Both Routes are•Constructable•Operable

Mackenzie Valley (Stand Alone)

Total Project Cost (US$billions) 2.3

Notional tolls (US$/mcf) 0.95

Prudhoe Bay

Inuvi

k

Norman Wells

Anchorage

Whitehorse

Yellowknife

Edmonton

Prudhoe Bay

Inuvi

k

Norman Wells

Anchorage

Whitehorse

Yellowknife

Edmonton

“Northern” Pipeline Challenges

Unique “Northern” P/L Issues

Enbridge Northern Expertise

Experience Applied to the Future

Enbridge is route neutral

Northern Expertise

Enbridge has substantial experience constructing and operating northern infrastructure projects….

AlaskaInuvik

Norman Wells

Zama

Inuvik Gas

Norman Wells Pipeline

Over the TopEnbridge Proposed Location Near to Shore

The “Measured Approach”

Build two smaller lines “consecutively”

in the same right-of-way

The “Measured Approach”

BENEFITS

– Cost estimates 48-inch vs. 2x36-inch within 7%

– Reduced project risks

– Socio-economic benefits

– Improved schedule for first gas to market

– Pipeline capacity better matched to market needs

Build two smaller lines “consecutively”

in the same right-of-way

Success requires: Continental decision-making

Robust project economics

A Producer decision to proceed

Common understanding

Cooperation of all stakeholders

The Great NorthernThe Great NorthernPipeline DebatePipeline Debate

Stephen J. WuoriStephen J. Wuori

Group Vice PresidentPlanning and Development

Arctic Gas Symposium

November 30, 2001Houston, Texas