Alberta’s Industrial Heartland Overview Industrial Railway Safety Conference – April 28 th, 2015

Who We Are A cooperative effort of five municipalities in and around Edmonton, Alberta, Canada. A organization committed to sustainable development through economic development and planning. A specialized region of over 582 km 2 zoned for heavy industrial development Our focus includes: Identifying hydrocarbon processing business opportunities Communicating with global investors Assisting investors in site selection process Acting as a liaison with industry and other levels of Government

15 billion barrels NGL 29 billion barrels NGL 11 billion barrels NGL SOURCE: Alberta Energy Resource Conservation Board Alberta Geological Survey Alberta’s PLAY rich in natural gas liquids

Existing Natural Gas Pipelines

Alberta’s Industrial Heartland – Existing Industry Canada’s largest hydrocarbon processing center home to 15 world scale facilities responsible for 43% of national basic chemical manufacturing Major center for: – Petroleum Refining (422 Mbdp capacity) – Bitumen Upgrading (150 Mbdp expanding to 300 Mbpd capacity) – Ethylene, MEG, polyethylene production – Natural Gas Fractionation and Processing – Fertilizer production – Pipeline terminal and storage area – A variety of other petrochemical and specialty products

Heartland Advantages – Synergies with existing industry in the region – Western Canada’s natural gas fractionation hub – 2 Class 1 Rail Roads – CN and CP – Developed and robust electrical grid – Feedstock availability through pipeline access – Underground – salt dome – storage capabilities – Water availability and wastewater facilities – Developed labour force

Historical Pricing Relationship

Pricing Differentials - AECO vs Henry Hub Natural Gas $0.82 USD = $1.00 CAD Price – April 24, 2015 YTD Average Price AECO Spot ($CAD/mcf)$2.58$2.71 Henry Hub Spot ($CAD/mmbtu) $3.10$3.52 Differential (H. Hub/Aeco)$0.52$0.82

Among the BEST operating performance in North America Photo Credit: DOW

Propane Pricing Differentials

Natural Gas Processing Mid Stream Growth Keyera Energy – De-ethanizer under construction – operational Q – Double C3+ fractionation capacity to 65,000 bpd – Q Plains Midstream Canada – Expansion of existing fractionation and storage facilities, including development of rail and truck terminals Pembina Pipeline – Doubling C2+ fractionation capacity to 146,000 bpd – operational Q – Construction of C3+ fractionator with capcity of 55,000 bpd – operational Q3 2017

Announced Gas Based Projects Williams PDH facility and derivatives plant – Convert propane to propylene – Regulatory information compiled and submitted last fall Air Products Hydrogen Facility – Hydrogen production facility ATCO Power generation project – Natural Gas power generation facility NOVA Chemical Joffre Expansion – $1 billion expansion to Red Deer facility

Connected to Markets

AIHA - Rail Network Overview Alberta’s Industrial Heartland is served by both Canadian “Class 1” railways – Canadian National and Canadian Pacific. Both CN and CP view Alberta’s Industrial Heartland as a strategic area of growth, and continue to make capital investments in their infrastructure within the region and on rail routes that connect the region. CN and CP are supported in the AIH by transload operations who handle truck to rail, or pipe to rail loading facilities.

Rail Access to Markets CN operates the largest rail network in Canada and the only coast to coast transcontinental network in north America. Network spans Canada and mid-America from the Atlantic to Pacific oceans to Gulf of Mexico Serves Prince Rupert and Vancouver on west coast – Halifax on east coast, and New Orleans and Mobile, Alabama on US Gulf coast. CP also serves Montreal, Vancouver, and with US connections has excellent access to Washington state ports. Both CN and CP have connections with all five US class 1 railroads – ensuring access to virtually anywhere on the north American rail network – including Mexico.

Photo ©S.I.Smith 2012 Note: Estimated SIA carloads for 2013 represent additional 100,000 carloads/annum.

Photo ©S.I.Smith 2013 Note: Estimated SIA carloads for 2020 represent additional 218,000 carloads/annum.

Alberta’s PETROCHEMICAL PLAY – defining the best fit IHS Consulting’s robust analysis aligns industry factors with Alberta attributes Results reflect weighted rankings of the following: Derivative Market Outlook (40%) Feedstock (25%) Operations (15%) Value Chain (10%) Technology (5%)

Investment Opportunity Analysis 23

Study Profitability of Petrochemical Plants in Alberta’s Industrial Heartland vs.. Gulf Coast Completed by: Stantec Consulting LTD Scenario Comparing the relevant life cycle costs of a 300 Mgal/day Lurgi-process methanol plant sited in three locations Complete Study: Cost Competitiveness – AIH vs. Gulf Coast

Gulf CoastAlberta’s Industrial Heartland NPV$844$931 IRR18.4%17.6% Key Drivers -Tax Regime (+ $312 million) -Price of natural gas (+ $118 million/year) -Capital costs (- $50 million) -Distribution costs (- $150 million)

Cumulative NPV – AIH vs. Gulf Coast

$12.5 billion underway $11.5 billion pending 1.North West Redwater Partnership – Bitumen Refinery$8.5 billion 2.Williams Energy – Off-Gas pipeline and Fractionization$500 million – Propylene PDH facility$1.5 billion 3.Pembina Pipelines – NGL fractionization expansion$600 million – Heartland Hub logistic Center $200 million 4.Sasol – Gas to Liquids facility$ 8 billion (est) 5.Keyera – Fractionization Capacity Expansion$330 million 6.Plains Mid Stream$600 million – Debottlenecking fractionator – Rail Capacity Expansion 7.Carbon Capture and Storage Projects $2.5 billion – Shell Quest – Enhance Energy 8.ATCO co-gen facility$200 million 9.ATCO Power $850 million 10.Air Products$300 million

Contact Us Garret Matteotti Manager, Business Development