Energy markets and TSX GroupThe 2004 Energy Roundtable

Richard NesbittPresident, TSX Markets

September 2004

2

TSX Group is an operator of marketplaces

45%

• Canada’s equity markets• Global leader in mining &

natural resources• Over 150 years of history

• Canada’s leading e-fixed income market

• Since 2002

• Leading North American energy exchange (gas & electricity)

• Founded in 1994; part of TSX Group since 2004

3

Electronic energy trading is growing

Total CAGR :32%

Source: Accenture (2002/2003); NGX

Nat. gas CAGR: 15%

$US B

Estimated value of global online energy trading to 2007 1

1

4

Natural gas markets are continental

US & Canadian Gas Supply

1995 2000 2005 2010 2015 2020 2025

0

5

10

15

20

25

30

35

LNG

Alaska

McKenzie DeltaNon-Arctic Canada

Rockies

Gulf of Mexico DeepwaterGulf of Mexico Shelf

Other Lower 48°

1Europe 30 Gas Supply

-

5

10

15

20

25

30

35

1995 2000 2005 2010 2015 2020 2025

1% CAGR

2% CAGR

Net imports

Production

Source: U.S. Petroleum Council; EU1

5

Canada produces approximately 25% of North America’s gas

North American natural gas production by region, Q402 and Q403

Source: National Energy Board (Canada)

1.0 7.4

WCSB

16.7 16.3

SOEP 0.5 0.4

MIDWEST

1.3 1.3

APPALACHIANS 1.3 1.3

ROCKIES

6.5 7.0

ANADARKO 7.4 7.2

SAN JUAN

3.8 3.6

PERMIAN

4.5 4.5

CALIFORNIA

GULF (On)

GULF (Off)

12.4 12.8

12.2 12.2

1.0

LNG imports02 vs. 03

0.7 1.1

4Q02: 68.1 Bcf/d4Q03: 68.9 Bcf/d

Total Supply

6

NGX operates a unique integrated trading and clearing platform

• Trading• Electronic limit order book• Voice facilitation

• Clearing• Central Counter Party to all

NGX-matched trades• Also clears OTC-matched

trades• Data

• View only• Indices

Services Markets

• Spot, forwards and swaps contracts in natural gas and electricity

• All major hubs in Canada• Select US hubs

Customers

• Established global energy participants

• Financial participants• Hedge funds

7

Successful growth will build around trends

Strong growth forecast in global energy supply and demand

Continuing/increasing need to manage volatility

Continuing influx of financial speculators and capital – particularly hedge funds

Advent of Liquid Natural Gas

Evolution of power market politics

Increasing standardization of non-gas commodities

Development of new energy sources