1 Questar Pipeline Current Capacity and Development Shelley A. Wright Director, Business Development May 15, 2007 Wyoming Pipeline Authority Meeting

2 Agenda Questar Pipeline Overview Basin Projections for Production vs. Pipeline Capacity Pipeline Expansion Projects Case Study – Southern System Expansion II –Finding Resources –Paying for Pipeline Projects –Covering the Costs Storage Update Summary

3 Questar Pipeline System Map

4 Questar Pipeline Transportation Consolidated Contract Demand MDth/day

5 GREEN RIVER BASIN PINEDALE / JONAH GREATER GREEN RIVER BASIN UINTA BASIN UNITA BASIN PICEANCE BASIN PICEANCE BASIN COLORADO Questar Pipeline Other Pipelines Producing Basins UTAH Rockies Producing Basins WYOMING

6 UTAH WYOMING COLORADO PICEANCE BASIN UINTA BASIN GREEN RIVER BASIN GREATER GREEN RIVER BASIN UINTA BASIN PICEANCE BASIN Questar Pipeline Other Pipelines Producing Basins The Rockies as of 2006 Production is forecast to exceed pipeline capacity in our core basins. Production vs. Pipeline Capacity

7 Rockies Producers Are Seeking To Expand Export Capacity Cheyenne Hub East Louisiana Midwest MidContinent Ohio Valley Northeast Opal Hub Goshen Meeker Greasewood California Northwest Cheyenne Hub East Louisiana Midwest MidContinent Ohio Valley Northeast Opal Hub Goshen Meeker Greasewood California Northwest Wamsutter

8 Expansion Projects Overthrust Pipeline Expansions –Opal –Wamsutter Southern System Expansions to Greasewood and Meeker –Fidlar to Greasewood/Meeker –Divide Creek to Greasewood/Meeker Southern System Expansion II

9 Overthrust Pipeline Expansions Overthrust Pipeline Questar Pipeline Other Pipelines Utah Wyoming

10 Overthrust Pipeline Expansion to Opal Up to 500,000 Dth/d of capacity to Opal (West deliveries) –New 27.1 mile pipeline extension to Opal –Deliveries to Kern River at Opal 300,000 Dth/d capacity subscribed January 1, 2007 in-service date No fuel charge, lost and unaccounted for only

11 Opal Project

12 Opal Project

13 Overthrust Pipeline Expansion to Wamsutter Capacity of 750,000 Dth/d -fully subscribed 77.3 mile extension from Kanda to Wamsutter –Two new compressor stations at Roberson Creek and Kanda Deliveries to Rockies Express and WIC New receipt points: Williams Opal Plant, Enterprise- TEPPCO Pioneer Plant and QGM Blacks Fork Plant January 1, 2008 in-service date Fuel rate anticipated to be less than 1% (high load factor) FERC Notice to Proceed received 5/10/07

14 Fidlar Compressor Meeker Delivery Greasewood Delivery WIC REX 2 2 DIVIDE CREEK TO GREASEWOOD In Service:11/1/09 Volume:200 MDth/d Distance: 37 miles Other Pipelines 1 BONANZA TO GREASEWOOD/MEEKER In Service:11/1/09 Volume:Up to 540 MDth/d Distance: 60 miles Divide Creek Receipt Sand Springs Delivery 1 Questar Pipeline Other Pipelines Expansions to Greasewood/Meeker Hub

15 Potential Expansion for Deliveries to Greasewood/Meeker Hub Potential expansion to provide deliveries of up to 540,000 Dth/d Receipt points at Fidlar Station (Uinta Basin) Delivery to Greasewood/Meeker hub to Rockies Express, WIC and TransColorado Approximately 60 miles of 24-inch diameter pipeline from Bonanza to Greasewood/Meeker for large volume requirements Various volume options have been evaluated Proposed in-service date November 1, 2009

16 Deliveries to Greasewood/Meeker- continued Initial project is minor line looping and compression: –Compression at Greasewood –High pressure Interconnection with REX at Meeker –New hub pipeline between Greasewood and Meeker Capacity of 50,000 Dth/d available on a first-come, first-served basis. QPC currently negotiating with several parties Maximum rate and 15-year term required to acquire capacity Delivery to Greasewood/Meeker hub to Rockies Express, TransColorado, and possibly WIC Proposed in-service date November 1, 2008

17 Divide Creek to Greasewood/Meeker Expansion of 200,000 Dth/d from Piceance Area to Greasewood Receipt points: –Divide Creek - 100,000 Dth/d –Clough/Rulison - 100,000 Dth/d New facilities include 37 miles of 24-inch diameter pipe and compression Target November 1, 2009 in-service date Smaller project of 25,000 Dth/d expansion recently subscribed. Can be provided with compression by 11/1/08. Additional processing at Greasewood allows increased volumes from the Divide Creek Area

18 Case Study: Southern System Expansion II Oak Springs Compressor Price Fidlar Compressor Southern System Expansion II In Service:11/1/07 Volume:175 MDth/d Distance: 59 miles Blind Canyon Compressor Questar Pipeline Other Pipelines Goshen Delivery Payson Delivery Thistle Compressor ML104 Ext ML104 Loop

19 Construct 59 miles of 24-inch diameter pipe in Carbon, Duchesne and Uintah Counties, Utah –ML104 Ext – 53.9 miles east from Soldier Creek to Green River BV on ML 40 –ML104 Loop miles between Fausett Junction and Oak Spring Interstage –53% BLM, 43% Private, and 4% State –15 landowners No new compressor stations – modifications at existing Oak Springs and Blind Canyon stations FERC 7(c) application filed on November 21, 2006 Anticipated Start of Construction: May 1, 2007 In-service date: November 1, 2007 Estimated capital cost: $108 Million, a 49% increase from $73 Million estimate in March 2006 Case Study: SSXP II Project Description

20 Case Study: SSXP II Proposed Route

21 Black Diamond Slope in Water Canyon (SSXP II) One of the steepest slopes on the QPC system. Drop is over 900 ft. Average Slope is almost 30%.

22 Backside of a Slope in Water Canyon (SSPX II)

23 Case Study: Finding Resources for Expansions—SSXP II Pipeline contractors –Had to do two job showings –Evaluated 30 contractors –13 contractors reviewed the job –Only 3 provided bids/proposals –Contractor concerns Lack of resources (manpower and equipment) Difficult terrain Materials –24 inch pipe has a lead time of 9 to 12 months –24 inch valves have a lead time of at least 6 months

24 Case Study: Paying for Expansions—SSXP II 49% increase in Capital cost: –$73 Million (March 2006 Estimate) Pipeline construction contractor costs based on $87 / ft (Almost 1½ times the SSXP I contractor costs which was constructed Fall 2005.) –$108 Million (November 2006 Estimate) Pipeline construction contractor costs based on $190 / ft (Almost 3½ times the SSXP I contractor costs.)

25 Case Study: Covering the Costs—SSXP II Need for longer term contracts (15 years) Increased rates (SSXP I and SSXP II are priced at $0.26/Dth/day vs. system maximum of $0.18) Expectations of delays in completion due to many factors including but not limited to: regulatory delay, environmental issues, backorder or unavailability of parts, skilled labor going to easier projects, etc.

26 Storage Update At Clay Basin Storage at Clay Basin continues to be an integral part of natural gas markets in the Rockies Temperatures well below normal in the Great Basin area in January demonstrated the importance of Clay as a source of supply Pipeline capacity constraints during the summer demonstrated the importance of Clay as market

27 Clay Basin Activity Injections and Withdrawals June 5, 2006 to Feb. 7, 2007

28 Clay Basin Yearly Comparisons

29 Other Potential Storage Opportunities Southwest Wyoming Salt Cavern –Located near Evanston, WY –Ultimate capability 12.5 Bcf working gas – initially 5 Bcf –Potential deliverability of 500 MMcf/day associated with 5 Bcf of storage –Increased interest due to new electrical generation and eastern markets –Interconnects with QPC and Kern River with potential tie to Overthrust Pipeline –Potential storage of liquids and compressed air Other Potential Storage Projects

30 Summary Questar Pipeline along with other pipeline companies is trying to keep up with production growth in the Rockies by pursuing major expansion projects. The path to complete these projects is arduous in many ways with geography, regulatory and environment, manpower, materials and cost challenges to overcome. Questar Pipeline greatly appreciates its customers in their willingness to support projects.