Moving Towards Asset Management Excellence Ruth Hook Manager Asset Management | Union Gas Ltd. CNAM 2014 Conference Toronto, Ontario May 20-23, 2014

Agenda Welcome Union Gas – An Overview Asset management – Canadian Gas Association Asset Management – Union Gas Q&A

Union Gas Major Canadian natural gas storage, transmission and distribution company based in Ontario Over 100 years of experience and safe service to customers Dawn Storage facility – largest underground storage facility in Canada Dawn Hub, one of the top-5 physically traded hubs in North America Assets of $6.4 billion, ~1.4 million customers, ~2,200 employees One of Canada's Top 100 Employers for 2011-2014 A Spectra Energy (NYSE: SE) company Retail Customers 1.4 million 2013 Pipeline Throughput 1.402 Bcf Distribution Pipe 63,540 km / 39,480 mi Storage Capacity 156 Bcf Transmission Pipe 4,785 km / 2,980 mi Figures as of December 31, 2013.

Spectra Energy’s Diverse Portfolio of Assets Connecting the largest diverse markets with growing supply Gas storage facility Gas processing plant Propane terminal NGL storage Shale gas formations Crude storage Major oil pipeline terminal

Natural Gas System This diagram shows simply how a natural gas system operates. Highlighted in the top section is what is known as the production, storage and transportation end of the natural gas system. Natural gas is pumped out of the gas wells and moves to a compressor station where it can be either put into storage or it can enter the transmission system. Union Gas owns the largest underground natural gas storage facility in North America located near Sarnia. We are not in the business of natural gas production and do not operate any producing wells. We purchase gas from producers and pass it through to our customers without mark-up. Highlighted on the bottom half of this slide is what is known as the distribution portion of the natural system at Union Gas. From the transmission system, the gas is distributed throughout the province through gate stations. Gate stations are generally located just outside the city that it is serving. At the gate station, the gas pressure is reduced to between 1210 kPa and 3450 kPa (175 psig and 500 psig) depending on the system downstream. Downstream of the gate station are located distribution stations with regulators to further reduce the pressure to 420 kPa (60 psig). From these stations, the gas then flows to the end-users of the gas (homes and businesses). At the customers meter set, another regulator reduces the gas pressure even further to a rate that is safe for use in the home (1.75 kPa or 0.25 psig).

Asset Management Canadian Natural Gas Industry In 2007, the Standing Committee on Operations (SCO) of the Canadian Gas Association (CGA) formed the Asset Management Task Force The Canadian Gas Delivery industry saw the need for collaboration on shaping asset management in order to meet the needs for public safety, managing costs, developing process improvements through best practices, and reducing regulatory risks The Task Force produced a ‘Guiding Document on Asset Management’ to provide practical recommendations for implementing asset management.

Canadian Gas Association Guiding Document on Asset Management Distinguishing Elements Asset Health Review Asset Management Ranking Mechanism Capital Optimization Long Term Capital Planning Life Cycle Costing Maintenance Optimization  Asset Hierarchy / Asset Inventory / Health Metrics  Optimal Maintenance / Balance Performance, Risk and Spend Investment Ranking Methods and Tools / Finance, Risk, Strategy Assess Total Life Cycle Cost Selection Method for Capital / Maximize Contribution to Corp Objectives / Balance Performance, Risk and Spend Long Term Capital Needs of Assets / Support Growth, Replacement and Op Performance

Operations Management System Striving for Excellence Systematic, coordinated activities to ensure compliance and to drive continual improvement towards operational excellence Support conducting business in a manner that protects the environment and the safety, health and security of our employees, contractors, customers and the public -Hwy to operational excellence Building on strong foundation of existing programs

Union Gas OMS Asset Management is a Key Element Act Plan Do Check Checking & Corrective Action Performance Measurement & Audit Incident & Non-conformance Management Records Management Continual Improvement OMS Policy Implementation & Operation Competency and Training Communication Contractor Management Project Management Emergency Preparedness Document Management OMS Planning Organization, Responsibilities & Accountabilities Risk Management Asset Management Legal & Other Requirements Objectives and Targets OMS Review Management of Change Management Review

Management System in Place Union Gas Focus: Maturing Operations Management System Minimum Compliance Program Developing Management System in Place Continuously Improving Incident Risk Management committed to “safe operations” Rules/procedures drive decision-making Supervisor-led work culture Focus of corrective action for deviations is punishment Focus is risk-based systems and processes that drive consistent, reliable performance Leaders communicate expectations and goals and seek to hear all news, good and bad Clear accountabilities and rigorous competency assurance Management focus is building and sustaining a zero incident organizational culture Management and staff embrace operational discipline as key to assuring human performance (“processes executed the right way every time”) Employees and teams take ownership of processes; work teams share learnings and best practices Metrics, audits, and management review become tools for predicting failures and improving (rather than “gotchas”) Lack of management involvement Safety is delegated down in the organization Cost and minimum compliance standards drive decision-making “Zero incidents too expensive” “Zero incidents a concept only” “Zero incidents a distant goal” “Zero incidents part of the job” Reactive Proactive Predictive

Asset Management at Union Gas Focus is our Natural Gas Infrastructure Pipes, Compressors, Metering and Pressure Control Stations Building Strategies and Plans 2007  Identified as a Key Program within out Operations Management System 2012  Established an Asset Management Vision and a Multi-Year Roadmap Asset Management Projects to Build our Program Organization Structure - New Role – Asset Management 2014  Continue to Build Technology SAP EAM implementation Data Integrating Asset Data Systems Strategy Senior Management Endorsement - Asset Management Policy Building the Program - Asset Registry

Questions? Contact Me: Ruth Hook Manager Asset Management Union Gas Ltd. rhook@uniongas.com