Overview & StatusOverview & Status

May 2001May 2001

Joint Team Objectives

• Create an economic project (competitive cost of supply)

• Develop sufficient technical information to support FERC/NEB applications as soon as possible (target - year end 2001)

• Prepare for next phase of activity

Safe and Environmentally ResponsibleSafe and Environmentally Responsible

Miles

0 5 10 15 20 25

TAP

S

Northstar

Endicott

PrudhoeBay

Kuparuk

MilnePoint

NPRA

ANWR

CoastalPlain

(1002 Area)

Col

ville

Riv

er

LJL (April, 1997)

Pt. Thomson

Developments

Major Discoveries

Alpine

Liberty

Badami

Location Map

Alaska Gas Resources & Major Producers

• North Slope known resource ~ 35 Tcf• Prudhoe Bay – 8 Bcf/d of production

currently• Reinjected into reservoir• Ultimate resource estimates ~100 Tcf

Alaska Gas Owners

ExxonMobilPhillips

State

OthersBP

0

10

20

30

1990 2000 2010

0

25

50

75

BCF/DayBCF/DayTCF/YearTCF/Year

ExistingExisting

GrowthGrowth

8

52

0

25

50

75

E. Asia U.S.

Bcf/d

Expected demandminus knownsources delivered

2010 New Source Needs

Source: NPC, December 1999 & Tokyo Gas, 2001

Supply/Demand - Asia Comparison

North American Gas Supplies/Markets

Joint Team Organizational ChartManagement Committee

Program MgrAK to Alberta

Program Mgr Alberta to

Market

Program Mgr NGL

Project SvcsMgr

Enviro. &Regulatory

Mgr

External Affairs Mgr

CommercialMgr

PTUPBU

Interface

Project Mgr Gas Treatment

Plant

Project Mgr P/LAK to Alberta Project Mgr P/L

Alberta to Mrkt.

Project Mgr Infrastructure

Studies

Project Mgr NGL

Facilities

AK to Alberta Sector

Alberta to Mrkt. Sector

NGL

Economic Modeling/Integration

Bus Develop.

US Regulatory

Canadian Regulatory

Enviro. Mgr. US

Enviro. MgrCanada

Land Mgr.AK to Alberta

Land Mgr.Alberta to Mrkt.

Technical Services Mgr.

Project Controls Mgr.

ManagingProject Counsel

Southern Pipeline RouteSouthern Pipeline RouteLand Status For

Pipeline Route (in Greenin Green)Alaska Miles KilometersFederal 249 401State 368 607Municipalities 20 32Native Corp. 60 97Private 86 138 _Total 783 1275

Canada Miles KilometersCrown 402 647Provincial 678 1091First Nations 70 113Private 49 78 _Total 1199 1929

Total Route 1982 3204

Northern Pipeline RouteNorthern Pipeline Route

Land Status For Pipeline Route ((in Pinkin Pink)Alaska Miles KilometersFederal 48 77State 157 253 _Total 205 330

Canada Miles KilometersCrown (Federal) 763 1229Provincial 378 609First Nations 224 361Private property 49 78 _ Total 1414 2277

Total Route 1619 2607

Alberta to MarketPipeline System (B-C) :New-Build and/or Expansion

NGL Extraction Facility:Removal of C2+

Alaska to AlbertaPipeline System (A-B) :– Buried, High Pressure, Chilled Pipeline– Intermediate Compression– Block Valve Stations– Intermediate Pigging Facilities

Overall Project ScopeGas Treatment Facility (Prudhoe Bay) :Removal of Acid Gases - CO2, H2SCompress / Chill gas to P/L entry conditions

Environmental / Regulatory – USField studies

Environmental / Regulatory – CanadaField studies

Land – Canada (2)

Land – US Lower 48 US Alaskan

The “Seven Lenses” of Evaluation

• Economics

• Revenues

• Jobs

• Gas Access

• Safety

• Timing

• Environment

Conceptual Pipeline System Components

• Pipeline system is comprised of four main facilities:– Buried pipeline (~48”, ~2500psi, high strength steel)– Intermediate compression facilities– Block valve stations– Intermediate pigging facilities

To MarketPrudhoe

GTP

Reinjection to Oil Fields

Intermediate Compression Facilities

Valve Stations

North SlopeCompression

Buried Pipeline

Gas Production

Applying 21st Century Technology

Attributes– Advanced materials & design– High Pressure operation– Buried line with thermal control– Fewer, more powerful compressor stations– Advanced construction (trenching, welding, river crossings)– Advanced communication & control systems– Advanced monitoring and maintenance systems

Benefits– Lower fuel consumption– Reduced emissions– Smaller footprint– Reduced environmental impact– Expansion capacity– Lower cost of supply– High reliability

Conceptual Pipeline Construction Plan

• Multiple construction spreads working over 3 year period.

• Onshore– Principally winter construction – especially in permafrost.– Pipeline buried except for few specific crossings.– Grade-only construction where soils allow.– Primarily snow pads where soil/vegetation require protection. – Gravel construction pads required where protection is required

and slopes are excessive for snow pads.

• Offshore– Summer construction from lay vessels.– Primarily offshore supply from existing infrastructure.

Wrap-up

• We are fully engaged in a joint program to evaluate and progress a large, modern pipeline from Alaska to Canada and the lower 48 states

• There is a growing market for Alaskan gas, but we must be cost-competitive to be a viable project

• It is premature to preclude any options at this point

Contract Awards

• The project will be in excess of 75 million dollars, with 90 employees, and 500+ contractors and subcontractors

• The following ten contracts were awarded for:– 4 for Engineering and Conceptual Design

• North Slope to Alberta• Alberta to US Markets• Gas Treatment Plant (GTP)• Natural Gas Liquids (NGLs)

– 2 for Environmental– 4 for Land Services

Contract Awards

• The companies that were awarded the contracts are:– VECO, headquartered in Anchorage, in a joint venture with Fluor,

based in Sugar Land, Texas and Calgary– The AlasCan Group, based in Calgary, is in a joint venture between

five companies: Kellogg Brown & Root in Houston and Edmonton, COLT Engineering in Calgary, Michael Baker Jr.’s Anchorage office, Natchiq and NANA/Colt Engineering LLC, both in Anchorage

– Natchiq, headquartered in Anchorage in a joint venture with Parsons Engineering based in Arcadia, CA.

– The URS team based in Anchorage, will dedicate over 100 employees to this project

– AMEC Earth and Environmental, based in Calgary will dedicate over 80 employees to this project

– American Reclamation Group LLC based in Anchorage– Scott Land and Lease, based in Calgary and Progress Land

Services, based in Edmonton– Wilbanks Resources Corporation, based in Denver