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Byron WrightVice President, Strategy and Rates El Paso Eastern Pipeline Group
How Many is Too Many:Terminal Approval to RegasificationWachovia Securities LNG ConferenceMay 16, 2006
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Cautionary Statement Regarding Forward-looking Statements
This presentation includes forward-looking statements and projections, made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The company has made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this presentation, including, without limitation, our ability to successfully contract, build and operate the pipeline projects described in this presentation; changes in supply of natural gas; general economic and weather conditions in geographic regions or markets served by El Paso Corporation and its affiliates, or where operations of the company and its affiliates are located; the uncertainties associated with governmental regulation; competition, and other factors described in the company’s (and its affiliates’) Securities and Exchange Commission filings. While the company makes these statements and projections in good faith, neither the company nor its management can guarantee that anticipated future results will be achieved. Reference must be made to those filings for additional important factors that may affect actual results. The company assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by the company, whether as a result of new information, future events, or otherwise.
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El Paso’s Natural Gas Pipelines
TennesseeGas Pipeline
Elba Island LNG
SouthernNatural Gas
ANR Pipeline
Great Lakes GasTransmission (50%)
ColoradoInterstate Gas
Wyoming Interstate
El PasoNatural Gas
MojavePipeline
Mexico Ventures
Cheyenne Plains Pipeline
CypressPipeline
Florida GasTransmission (50%)
► 26% total U.S. interstate pipeline mileage► 36 Bcf/d capacity (25% of total U.S.)► Best market connectivity► Best supply access► Leading pipeline integrity program
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LNG Threats and Opportunities for El Paso
OpportunityThre
at
Threat
OpportunityOpportunity
Threat
Both
Opportunity
LNG Imports:The Gulf Coast Advantage
Proposed terminals
Certificated terminal
Existing terminals
Project by 2012
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BN/ABBBMexico
CCC+B-AMaritimes
CCDCD-West Coast
AB-B-CC-East Coast
DA+AAAGulf Coast
Market Basis
Market Liquidity
Pipeline Access
Quality ConstraintsSiting
LNG Prospects
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NA Terminal Capacity Growth
0
2
4
6
8
10
12
14
16
2006 2007 2008 2009 2010
CanaportCosta AzulAltamiraCameronSabine PassFreeportGulf GatewayCove Point ExpCove PointLake Charles ExpLake CharlesElba ExpansionElba IslEverettLNG Imports
Bcf/dExisting, Contracted Expansions, New Construction
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LNG Terminal Utilization Rates
0%
20%
40%
60%
80%
100%
2000 2001 2002 2003 2004
Asia Europe NA Total
Source: PIRA
Uti
lizat
ion
Rat
e
Regas ($0.35–$1.0)
Transportation ($0.7–$2.0)
Liquefaction ($0.8–$1.5)
Supply ($1.0–$1.5)
In Billions
Pipeline ($0.03–$0.2)
► Entire LNG chain requires investment of $2.8 to $6 billion per 1 Bcf/d capability
► Regas and pipelines are the smallest components
2 to 3 years 3 ½ to 4 years2 years
3 to 3 ½ years
½ year
Capital requirements decrease downstream
Source: CERA
Will the Tail Wag the Dog?
+50%?
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El Paso’s Role in LNG Development
► Strategy is to develop, construct, own, and operate infrastructure
► Contract terminal developer
► Will accept some balanced risks as appropriate and necessary to get contracts for the project:– Permitting risk
– Timeline risk
– Capital cost risk
– Contract term risk
Current Elba Island Facility
0.806 Bcf/d0.360 Bcf/d0.446 Bcf/dFirm sendout
1.215 Bcf/d0.540 Bcf/d0.675 Bcf/dPeak sendout
Feb. 2006Nov. 2001In-service date
7.33 Bcf3.33 Bcf4.0 BcfStorage capacity
CombinedExpansionReactivation
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Elba’s Customers and Capabilities
Start-up
Contract term
Dec-2001
22 yrs.
Feb 2006
30 yrs.
–
–
Reactivation Phase II Total
Storage capacity (Bcf)
Sendout (MMcf/d)
Capex ($MM)
4.0
675
–
3.3
540
$155
15.7
2,115
$505
Phase III
2010/2012
Long-term
8.4
900
$350
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SNG’s Cypress ProjectWill Improve Supply to Southern GA and FL
JEA
Progress FL
Cypress Project (Phase I)► 165 miles 24" pipe► Capacity: 220 MMcf/d► Capex: $241 MM► Pipe ordered► FERC certificate expected 2Q ‘06► In-service May 2007
FGT Phase VII► Capacity: 100 MMcf/d► Capex: $63 MM► In-service May 2007
Elba Island
Supported by 20-year Agreements withBG & Progress
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Elba Express PipelineWill Improve Supply to Georgia and the East Coast
Charlotte
Atlanta
Transco
Elba Island
Elba Express Pipeline► Pipe dia: 42"/36"; 191 miles► Capacity: 1,175 MMcf/d► Capex: $510 MM► In-service: 2010/2012
Supported by long-term agreements with
Shell & BG
Byron WrightVice President, Strategy and Rates El Paso Eastern Pipeline Group
How Many is Too Many:Terminal Approval to RegasificationWachovia Securities LNG ConferenceMay 16, 2006