Overview & Status July 18, 2001

Outline Brief Overview Current Activity / Progress Government Engagement Issues Forward Plan

Joint Team Objectives Assess the economic viability of the project Focus on route evaluation Cost and environmental considerations Prepare sufficient information to support potential permit applications Safe and Environmentally Responsible

Overall Project Scope Gas Treatment Facility (Prudhoe Bay) : Removal of Acid Gases - CO2, H2S Compress / Chill gas to P/L entry conditions Natchiq Parsons NGL Extraction Facility: Removal of C2+ Fluor Veco Environmental / Regulatory – Canada Field studies AMEC Earth and Environmental Land – US Alaska American Reclamation Group Alaska to Alberta Pipeline System (A-B) : Buried, High Pressure, Chilled Pipeline Intermediate Compression Block Valve Stations Intermediate Pigging Facilities Fluor Veco Land – Canada (2) Scott Land and Lease Progress Land Services Alberta to Market Pipeline System (B-C) : New-Build and/or Expansion The AlasCan Group Land – US Lower 48 Wilbanks Resource Corporation Environmental / Regulatory – US Field studies URS

The “Seven Lenses” of Evaluation Economics Environment Gas Access Jobs Revenues Safety Timing

Current Activity / Progress Contractors On-Board (approx. 500) Technical / Regulatory Work Proceeding Defining Commercial Issues Ongoing Discussions with Interested Parties Hundreds of public/private meetings Engaging Governments & Communities

Current Technical Studies Process Development Acid Gas (CO2, H2S) Removal Technology NGL Removal Processes Pipeline Hydraulic Simulations (Over 1,000 Cases) Pressure (1,750-3,000 psi) vs Diameter (42”-56”) Comparisons of Compressor Drivers Throughput and Expandability

Compressor Stations vs. Throughput System Optimization Plot Example 50 45 40 35 75 mile station spacing 44” 30 48” 52” Compressor Stations 56” 25 (@2500 psig) 20 150 mile station spacing 15 10 5 1 2 3 4 5 6 7 Nominal Volume BCFD

Current Technical Studies Materials Feasibility of High Strength Steel Logistics Port Surveys in Anchorage, Seward, Valdez and West Coast Review of Potential Fabrication Site Locations Trucking and Highway Analyses GTP Sealift Analyses – Potentially Largest Ever Construction Technology Directionally Drilled River Crossings Trenching Technology Construction Equipment Requirements & Availability

Regulatory / Environmental & Land Activities Summer field work / center line studies Cultural resource surveys Land owner discussions Beaufort Sea survey

Government Engagement Ongoing Discussions with Governments US and Canadian Federal State of Alaska Canadian Provincial/Territorial/First Nations

State Engagement Issues Initiate dialogue between Producers and State of Alaska regarding fiscal stability / certainty Objective is to have key terms understood prior to the January legislative session Key discussion items Valuation clarity (severance and royalty) Pipeline vs Producer issues Pipeline Ad Valorem certainty Gas take-in-kind and nomination process Project risk and long-term certainty June July Aug Sep Oct Nov Dec Agree ground - rules Working discussions Draft valuation, AVT contract terms Agreed terms pre - session

Simplification of State Royalty, Severance Valuation Common royalty and severance methodologies Transparent pricing Simplicity best way to minimize future concerns Wellhead price for royalty and severance linked to Lower 48 with transportation differential Define market price Agreement on gas valuation terms Concurrence with FERC/NEB tariff terms Processing fees

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 not yet clear that we can develop an economic project It is premature to preclude any options at this point Still targeting completion of engineering and route studies by year end