Alaska Natural Gas Transportation System A North American Energy Solution Alaska Natural Gas Transportation System A North American Energy Solution November 30, 2001 Marty Heeg Vice President, Business Development

Agenda u Overview of Foothills Pipe Lines u A short history of the certificated Alaska Natural Gas Transportation System u ANGTS assets and readiness u Benefits to Alaska and Canada u Pipeline options u Our view of northern development and supply/demand

Who is Foothills? u Sponsor of Alaska Natural Gas Transportation System u Privately held corporation owned by TransCanada PipeLines and Westcoast Energy u Owner and operator of the Phase I portions of the ANGTS in Canada > Phase I currently delivers 3.3 Bcfd of natural gas to United States u Active in developing northern pipeline projects since 1970s

Acronyms u AHPP -- Alaska Highway Pipeline Project u ANGTS -- Alaska Natural Gas Transportation System u ANGTA -- Alaska Natural Gas Transportation Act u NPA-- Northern Pipeline Act u ANNGTC -- Alaska Northwest Natural Gas Transportation Company

A Short History of ANGTS u ANGTA passed to expedite the pipeline to take Alaska gas to southern markets u After extensive review of three alternatives, ANGTS is selected as the best project u NPA established in Canada as ANGTA counterpart u FERC/NEB approves building of Phase I of ANGTS u Phase I in service --Phase I portion of ANGTS has delivered 11 Tcf of Canadian gas to U.S. markets

ANGTS Flexible Framework u The ANGTA/NPA framework > Provides for expediting the delivery of Alaskan gas to the Lower 48 > Is tested and accepted framework > Allows for updates > Allows Project to be modified to the required capacity and pressure and the use of updated technology

ANGTS Status u ANNGTC/Foothills was selected by the United States and Canada to construct and operate the ANGTS u Significant assets have been secured > FERC and NEB Certificates > U.S. Corps 404 Permits > Significant development work completed > 94% of right-of-way acquired, reserved or under application

YUKON NWT B.C. NUNAVUT ALBERTA SASKATCHEWAN Whitehorse Prudhoe Bay Inuvik Kingsgate Monchy Fort Nelson Fairbanks Boundary Lake Beaver Creek Gordondale Caroline ALASKA > Federal Grant 434 miles have been acquired. > State Application 200 miles under active application. > Other Lands 110 miles to be acquired. YUKON > Grant of easement for the entire ROW in Yukon. > Recognized in the Umbrella Final Agreement. NORTH B.C. > Foothills holds Map Reserves within this segment ANGTS Land Tenure

ANGTS is Ready Today u Extensive field testing and technology work u Computerized Soils Database u Technical and Environmental Plans filed with FERC/NEB u Tariffs filed with FERC and NEB Foothills and its shareholders have invested time, money and considerable effort to keep the Alaska Natural Gas Transportation System in an advanced state of readiness.

ANGTS is the Best Alternative u Has been extensively reviewed u Follows existing infrastructure u Will minimize adverse environmental effects u Easily accessible for maintenance and operations u Lowest capital cost option u Quickest to market

Alaska Nunavut Yukon Alberta B.C. Northwest Territories Project Description Size / Operating Pressure 42” diameter / 2050 psi Capacity Initial 2.5 Bcf/d Ultimate 4.0 Bcf/d Capital Cost Initial US$7.6 Billion Ultimate US$9.7 Billion Alaska Natural Gas Transportation System Lowest Cost, Quickest to Market for ANS Gas

Alaskan Benefits u Increase in Gross State $55 billion Product u Increase in Employment26,000 person years u Increase in State and Local $12 billion Government revenues Based on $3 MMbtu gas price over 25 years

Canadian Benefits u Increase in Gross Domestic $19 billion Product u Increase in Employment11,000 person years u Increase in Government $ 5.2 billion revenues Based on $3 MMbtu gas price over 25 years

ANGTS Advantages u Earliest Timing > Three-year head start on a green field project u Land Tenure > Extensive right-of-way acquired, reserved or under application u Flexible Framework > Treaty between the U.S. and Canada u Best Route > Follows existing transportation corridors u Benefits > Extensive benefits to Alaska and Canada

Progress Report and Next Steps u MOU with withdrawn partners from ANNGTC u Formal proposal to the North Slope Producers u Producer decision on the project expected in the 1st Quarter of 2002

Our Perspectives on Northern Gas Development 4 Strong gas demand is here to stay 4 Two separate pipelines will be built from Alaskan North Slope and Mackenzie Delta - Producers - Pipelines - First Nations- Local communities - Governments- NGOs 4 Collaboration is critical to early project execution 4 Optimization of South of 60 takeaway capacities required

Northern Gas Pipeline Development South of 60 Takeaway Capacities o Options  TransCanada  Alliance  Foothills / ANG / PGT  Foothills / Northern Border  Westcoast Energy  New greenfield Issues  Western Canada supply  Market pull  Tolling structures  Shipper netbacks  Point of NGL extraction