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Perspectives on North American Pipeline Infrastructure Opportunities Don Wishart, EVP Operations & Major Projects TransCanada Corporation IPLOCA September 2009
Perspectives on North American Pipeline Infrastructure Opportunities
Don Wishart, EVP Operations & Major Projects
TransCanada Corporation
IPLOCA September 2009
Forward-Looking Information
This presentation may contain certain information that is forward looking and is subject to important risks and uncertainties. The words "anticipate", "expect", "believe", "may", "should", "estimate", "project", "outlook", "forecast" or other similar words are used to identify such forward-looking information. Forward-looking statements in this document are intended to provide TransCanada shareholders and potential investors with information regarding TransCanada and its subsidiaries, including management’s assessment of TransCanada’s and its subsidiaries’ future financial and operations plans and outlook. Forward-looking statements in this document may include, among others, statements regarding the anticipated business prospects and financial performance of TransCanada and its subsidiaries, expectations or projections about the future, and strategies and goals for growth and expansion. All forward-looking statements reflect TransCanada’s beliefs and assumptions based on information available at the time the statements were made. Actual results or events may differ from those predicted in these forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among other things, the ability of TransCanada to successfully implement its strategic initiatives and whether such strategic initiatives will yield the expected benefits, the operating performance of the Company’s pipeline and energy assets, the availability and price of energy commodities, regulatory processes and decisions, changes in environmental and other laws and regulations, competitive factors in the pipeline and energy industry sectors, construction and completion of capital projects, labour, equipment and material costs, access to capital markets, interest and currency exchange rates, technological developments and the current economic conditions in North America. By its nature, forward-looking information is subject to various risks and uncertainties, which could cause TransCanada's actual results and experience to differ materially from the anticipated results or expectations expressed. Additional information on these and other factors is available in the reports filed by TransCanada with Canadian securities regulators and with the U.S. Securities and Exchange Commission (SEC). Readers are cautioned to not place undue reliance on this forward-looking information, which is given as of the date it is expressed in this presentation or otherwise, and to not use future-oriented information or financial outlooks for anything other than their intended purpose. TransCanada undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
TransCanada Pipeline Assets
September 11, 2009TransCanada3
Existing Pipelines
Proposed Pipelines
Gas Storage Facilities
GTN System
Tuscarora
North Baja
Tamazunchale
Foothills/BC
Iroquois
Portland
ANR
Alberta System
Canadian MainlineTQM
Great Lakes
Keystone
Northern Border
Guadalajara
• 59,000 km (36,500 miles)of wholly-owned pipeline
• Interests in an additional7,800 km (4,800 mi) of pipeline
• Unparalleled connectionsfrom traditional and emerging basins to growing markets
• Average daily volume ofapproximately 15 Bcf
• Provider of 370 Bcf of gas storage capacity
• 3,882 kms of pipeline currently under construction
• 3,463 kms of construction is associated with the 1,090,000 B/d Keystone Oil Pipeline
Bison
Industry Trends: Oil and Gas
• Conventional supplies of oil and gas are declining
• New shale gas basins play a significant and growing role in gas supply but also involve a fair amount of uncertainty around the recoverable capacity
• Low cost shale gas, coupled with lower demand, has pushed out LNG
• U.S. demand for Canadian oil is increasing and will be partially satisfied by the oil sands crude
• Construction costs have doubled and tripled then declined in the last five years, portraying the volatile nature of the industry
• Applied technologies are enabling solutions
• Environmental issues will be a significant influence
Pipeline Opportunities
Natural Gas Pipeline Outlook
Canada, U.S., and Mexico Natural Gas Demand
0
10
20
30
40
50
60
70
80
90
1990 1995 2000 2005 2010 2015 2020
E.G. Industrial Residential Commercial Other
Bcf/d
History Forecast
2008-2020 Growth 0.7% pa
Industrial Growth 0.3% pa
Electric Gen Growth 1.7% pa
Residential Growth 0.3% pa
Commercial Growth 0.4% pa
North American Gas Supply (Including Mexico Production)
0102030405060708090
100
1990 1995 2000 2005 2010 2015 2020
U.S. Other
Gulf of Mexico
WCSB
U.S. Rockies
Eastern Canada
Bcf/d
North
LNG
Mexico
Demand
History Forecast
Production From Key U.S. and B.C. Gas Shales
0.02.04.06.08.0
10.012.014.016.018.020.0
2000 2005 2010 2015 2020
Bcf/d
Fayetteville Shale
History Forecast
Woodford/Caney Shale
Barnett Shale
Haynesville Shale
Marcellus Shale
North East B.C.
U.S. LNG Imports and Re-gas Capacity
0.0
5.0
10.0
15.0
20.0
2000 2005 2010 2015 2020
Bcf/d
Re-gas Capacity
Actual Imports
History Forecast
Advancing Northern Gas Pipelines
10
Mackenzie Gas Pipeline
AlaskaPipelineProject
Pipelines
Proposed Pipelines
Gas Storage Facilities
Conventional Gas BasinsAlaska Pipeline
1,715 miles, NPS 48 – 2,500,000 tonnes of pipe
AGIA License granted by state to TC – Dec. 2008
TransCanada/Exxon partnership in-place – 2009
Open season planned for 2010
Competing BP/ConocoPhillips proposal does not conform with AGIA requirements
Mackenzie Gas Pipeline
1,843 miles, NPS 30 – 420,000 tonnes of pipe
Largest construction proposal in Canadian history
Environmental review by independent Joint Review Panel is ongoing
Project proponents involved in discussions with Canadian federal government to financially restructure project
• Both projects face challenges due competition from low cost shale gas and regulatory hurdles
• These challenges can be overcome in the mid to long-term timeframe
Mexico Pipeline Developments
CD Juarez
Nogales
Mexico City
Mérida
Toluca
Tuxpan
Naco
LázaroCárdenas
Guadalajara
Altamira
Manzanillo
Guaymas
Chihuahua
Valladolid
Reynosa
Monterrey
Tijuana
Acapulco
Topolobampo
Mazatlán
Mexicali
Cancun
Manzanillo to Guadalajara, 2011 in service
San Luis de la Paz to Guadalajara
Tamazunchale Pipeline• 130 km, 36-inch diameter• Initial capacity 170 MMcf/d• Future expansion up to 430 MMcf/d
Guadalajara Pipeline• 310 km, 30-inch diameter• Initial capacity 500 MMcf/d• Future expansion up to 900 MMcf/d
San Lui de la Paz
Tamazunchale, 2006 in service
Tamazunchale Pipeline Extension, 2012 in service
Pipeline Opportunities
Crude Oil Pipeline Outlook
Alberta Oil Sands
Source: Alberta Energy and Utilities Board
Established Reserves• Mineable 32 B• In Situ 143 B
CAPP 2009 Canadian Crude Oil Forecast
Oil sands growth drives Canadian crude production
Source: CAPP June 2009 Canadian Crude Oil Production & Supply Forecast (2005-2025)
Canadian and U.S. Crude Oil Pipeline Proposals
Source: CAPP June 2009 Canadian Crude Oil Production & Supply Forecast (2005-2025)
TransCanada’s proposed and existing pipeline projects
Keystone Oil Pipeline
Port ArthurHouston
KeystoneGulf CoastExpansion
Pipelines
Proposed Pipelines
Gas Storage Facilities
Cushing
PatokaWood River
Hardisty
Keystone
Steele City
2009 in-service
2011 in-service
2010 in-service
2012 in-service
* Comprises Keystone and Keystone Gulf Coast Expansion. Keystone is currently in construction.
Keystone System*
• 1,090,000 B/d capacity
• 910,000 B/d binding contractual commitments for an average term of 18 years
• Future expansion potential to 1,500,000 B/d capacity
• US$12.2 billion, TC 100%
• In service 2009-2012
Other Pipeline Opportunities
• CO2 Pipelines
• Water Pipelines
• Ethanol Pipelines
• Hydrogen Pipelines
Summary of Pipeline Mileage (2009+)
Miles of Pipeline Construction (by diameter)
4-10 in. 12-20 in. 22-30 in. 30+ in. TotalGas Pipelines
U.S. 25 325 1,427 7,526 9,303Canada 253 380 633
Crude Oil PipelinesU.S. 57 157 2,394 2,608Canada 866 1,934 2,800
Product PipelinesU.S. 812 314 460 1,586Canada 387 387
Total 82 1,681 2,860 12,694 17,317
Source: Oil & Gas Journal, February 2009
Influencing Factors
• Regulatory process and permitting
• Material and contract commitments
• NIMBY: landowners, communities,…
• Long-term contracts
• Societal rebalancing of:• Risk/reward• Individual rights versus the public good
Perspectives on North American Pipeline Infrastructure Opportunities
Don Wishart, EVP Operations & Major Projects
TransCanada Corporation
IPLOCA September 2009
