Midstream Business is in High Gear

Enbridge Energy PartnersEnbridge Energy Partners

Stephen JJ LetwinStephen JJ Letwin

Houston Gas Processors AssociationHouston Gas Processors Association

May 2008May 2008

#2

Certain information during this presentation will constitute forward-looking 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 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 discussion of risk factors.

Legal Notice

Outline

• Who is Enbridge

• Oil and gas prices

• Natural gas demand

• Natural gas supply

• Midstream views

#4#4

Ottawa

Saint JohnSuperior

Clearbrook

ZamaFort McMurray

Montreal

Toronto

Buffalo

Regina

Hardisty

Patoka

Casper

Salt Lake City

Houston

Toledo

Edmonton

Norman Wells

Fort St. John

Cushing

Inuvik

Chicago

WoodRiverEl Dorado

Natural Gas Distribution

Liquids Systems

Natural Gas Systems

Detroit

• Strategy focused on North American energy delivery

• Enbridge Inc. (ENB), as parent of general partner, is strong and supportive sponsor

• Enbridge Energy Partners (EEP) is primary vehicle for mature energy transportation infrastructure in U.S.

• ENB 5-year capital forecast is >$12 billion (excluding EEP) - several projects will benefit EEP

Enbridge Continental Focus

#5#5

Enbridge Energy Partners, L.P.

EEP Liquids Systems

EEP Gas Systems

Enbridge Liquids Systems

Buffalo

Toledo

Patoka

Cushing

Wood River

Chicago

Houston

• EEP has strong long-term positions in liquid petroleum and natural gas transportation

• ~2 MMbpd deliveries on three liquids systems – expanding to serve growth in Canadian oil sands production

• ~2 MMcfd throughput on three principal natural gas systems – increasing production in TX and OK providing opportunities in treating, processing and transmission

Crude Oil Price

$0

$20

$40

$60

$80

$100

$120

$140

1/1/

2001

1/1/

2002

1/1/

2003

1/1/

2004

1/1/

2005

1/1/

2006

1/1/

2007

1/1/

2008

1/1/

2009

1/1/

2010

1/1/

2011

1/1/

2012

1/1/

2013

1/1/

2014

1/1/

2015

1/1/

2016

1/1/

2017

1/1/

2018

1/1/

2019

Historical Forward Strip

WTI/$/Barrel

Nymex @ May 9, 2008

Natural Gas Price

$-

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

$16.00

1/1/

2001

1/1/

2002

1/1/

2003

1/1/

2004

1/1/

2005

1/1/

2006

1/1/

2007

1/1/

2008

1/1/

2009

1/1/

2010

1/1/

2011

1/1/

2012

1/1/

2013

1/1/

2014

1/1/

2015

1/1/

2016

1/1/

2017

1/1/

2018

1/1/

2019

Historical Forward Strip

Henry Hub $/MMbtu

Nymex @ May 9, 2008

Factors Driving Gas Price Increases• Lower 48 storage balances down

– ~300 Bcf y/y– ~ 1.7 Bcf/d of additional injections to reach last year levels

• Gas demand remains strong despite economic conditions

• Gas price low in comparison to fuel oil – Gulf Coast Spot 1% - $14.64/mmbtu

• Lower Canadian Imports– Down ~ 0.5 Bcf/d y/y

• Lower LNG imports– Down ~ 2 Bcf/d y/y– Asian & European demand strong & not yet showing seasonal drop

• Lower 48 production offsetting lower Canadian & LNG imports – Up ~ 2 bcf/d y/y

• If storage is to fill to last year levels:– Must outbid Europe for LNG – recent drop in NBP price improving prospect – Or; gas price must move above resid.

Average LNG Prices 2008

0

2

4

6

8

10

12

14

Jan Feb March

US

$ /

MM

btu Korea

Japan

NBP

Henry Hub

• LNG is only gas source for Japan and Korea – Will bid up price to meet demand

• North America is currently the market of last resort

Asian & European prices are higher than US prices

Source Data Paneurasian

* Includes lower pricedlegacy contracts

*

North American LNG Imports

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2003

2005

2007

2009

2011

2013

2015

MM

cf/

d

June 2007 Forecast

April 2008 Forecast

Actual

Forecast for LNG imports continues to drop as domestic supply grows

• Asia will absorb more LNG • World LNG supply growth also slowing

– Project cost and risk have been increasing

Source Data Wood Mackenzie

• US LNG imports will be a function of Europe and Asia demand– Same seasonal influences as North America but less storage

• Swings in LNG availability will lead to greater pricing volatility

Monthly US LNG Imports

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Bc

f/d

2005

2006

2007

2008

LNG imports will be seasonal, and vary significantly from year to year

Source Data Paneurasian

North American Gas Consumption

Gas Demand History/Forecast

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Bcf

per

Day

ResComm Industrial Electric

Enbridge Forecast

We expect North American natural gas demand to grow over the next decade.

Cumulative change from 2006 (Bcf/d)North America Demand Growth Projections

Canada West

Pacific NW

California/Nev

Southwestern US

Great Plains Great Lakes

Ontario/Quebec

Midcontinent

Texas/Gulf Coast

Southeastern US

Northeast US

2010 - 0.2 2015 - 0.4 2020 - 0.8

2010 - 0.9 2015 - 1.4 2020 - 1.7

2010 - 0.8 2015 - 1.5 2020 - 1.8

2010 - 1.0 2015 - 1.22020 - 1.2

2010 - 0.3 2015 - 0.8 2020 - 1.1

2010 - 1.2 2015 - 1.6 2020 - 1.5

2010 - 0.2 2015 - 0.2 2020 - 0.2

2010 - 0.2 2015 - 0.3 2020 - 0.4

2010 - 0.6 2015 - 1.2 2020 - 1.6

2010 - 0.1 2015 - 0.12020 - 0.2

2010 - 0.7 2015 - 1.5 2020 - 2.3

Canada2010 - 0.9 2015 - 2.0 2020 - 3.1

United States

2010 - 5.5 2015 - 8.5 2020 - 9.8

Enbridge Forecast

After 5 years of decline US gas production making a comeback

35.0

37.0

39.0

41.0

43.0

45.0

47.0

49.0

51.0

53.0

55.0

2001 2002 2003 2004 2005 2006 2007

BC

F/D

35.0

37.0

39.0

41.0

43.0

45.0

47.0

49.0

51.0

53.0

55.0

2001 2002 2003 2004 2005 2006 2007

BC

F/D

US Dry Gas Production

Source: EIA

Basin Cost Structure 2007 Estimate

$-

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

$10.00

Dollars per Mcf

Return on Invested CapitalRoyaltyOperating CostCapital

2 4 6 8 10 12 Billion Cubic Feet per Day (Estimated Vintage 2007 Gas Drilling)

The cost of domestic production will setthe long run price of North American Gas.

Source: Cambridge Energy Research Associates.

• 2007 Average cost estimate ~ $US 6.90 / MCF @ a 10% IRR• Cost moderated in 2007 by 10 -25% but remain high

Drilling activity remains robust

US Gas Well Rig Count

0

200

400

600

800

1,000

1,200

1,400

1,600

J an-01 J an-02 J an-03 J an-04 J an-05 J an-06 J an-07 J an-080

2

4

6

8

10

12

14

16

Gas Rigs Natural Gas Price

Supply will expand in some regions of North America and contract in others…..

Eastern Canada

Gulf of Mexico

Mackenzie Delta

Alaska

WCSB

Eastern United States

Gulf Coast Onshore

West Coast

Rockies

Permian & MidContinent

San Juan

2010 – 0.0 2015 – 0.02020 – 0.0

2010 – <1.4> 2015 – <1.9>2020 – <2.5>

2010 – 2.3 2015 – 3.32020 – 3.6

2010 – <0.9>2015 – <2.0>2020 – <3.4>

2010 – <0.1> 2015 – <0.2>2020 – <0.3>

2010 – <0.1>2015 – <0.3>2020 – <0.7>

2010 – 0.5 2015 – <0.3>2020 – <1.5>

2010 – 0.2 2015 – 0.32020 – 0.5

2010 – 2.3 2015 – 3.32020 – 2.9

2010 – 0.0 2015 – 0.02020 – 1.0

2010 – <0.0>2015 – <0.0>2020 – <0.0>

LNG

2010 – 3.7 2015 – 8.2

2020 – 13.3

Cumulative Change from 2006 Bcf/d

Supply reductions shown in red with

brackets

North America Supply

2010 – 2.7 2015 – 2.3

2020 – <0.4>

Enbridge Forecast

And all this gas growth needs Midstream services

• Gathering

• Treating

• Processing

• Fractionation

• Transportation

• Marketing

US Pipeline Map

Gas Processing Plants

#21

Processing margins are at historical highs

(0.40)

(0.20)

-

0.20

0.40

0.60

0.80

1.00

1.20

Jan-0

4

Jul-0

4

Jan-0

5

Jul-0

5

Jan-0

6

Jul-0

6

Jan-0

7

Jul-0

7

Jan-0

8

Jul-0

8

Jan-0

9

Jul-0

9

Jan-1

0

Jul-1

0

Jan-1

1

Jul-1

1

$/G

allo

n

History Fwd Strip History w/o c2 Fwd Strip w/o c2

Forward Prices on May 9 HH Nymex and quoted Mt. Belvieu Non-Tet Weighted Avg. based on 45%-C2; 27%-C3; 10%- nC4; 6%-iC4; & 12%-C5+

All this is keeping everyone very busy

• Our experience in 2007:– Added ~800 mcf/d of processing capacity @ 5

Plants (200 Cryogenic & 600 HDP Control)– Over 200+ Mcf/d treating capacity– 400 new well connects– 37,000 HP of net compression added– 450+ miles of pipe

• Similar experiences for other midstream companies

Finding people to do the work

• Enbridge added 55 G & P staff in ‘07

• Challenges:– Aging workforce– High demand– Work not always in ideal locations

• Response:– Work with trade schools– Apprenticeship programs

Other challenges for which we are working on solutions

• Significant inflationary pressures– Labour, equipment and materials all rising

• Delivery times longer– Eg. (compression delivery times up 25% in

last 2 years)

• Right of way more expensive and more difficult to obtain

The fish are jump’n and the cotton is high

• Incredibly strong price environment

• Demand for gas remains solid

• Numerous new gas plays to exploit

• Challenges for Midstream are big but the opportunity greater

Midstream Business is in High Gear

Enbridge Energy PartnersEnbridge Energy Partners

Jeff Cardinal, Mgr. Planning & EconomicsJeff Cardinal, Mgr. Planning & Economics

281-298-9841281-298-9841