1. Society of Petroleum Engineers ASAP Project Overview January 9, 2014

2. Todays Presentation Alaska Gasline Development Corporation Enabling Legislation – HB4 Alaska Stand Alone Gas Pipeline Project Scope Line Pipe Material Work Plan 2

3. ASAP The In-state Pipeline Project April 2010: HB 369 mandated that Alaska Housing Finance Corporation (AHFC) facilitate development of a plan for an in-state pipeline project. July 2010: AHFC established the Alaska Gasline Development Corporation (AGDC) as a subsidiary corporation to take over project planning and execution. ASAP is that project: the Alaska Stand Alone Pipeline. Also known as the in-state pipeline. April 2013: HB 4 mandates AGDC to advance an in-state gas pipeline from North Slope to Fairbanks and Southcentral to an open season and sanction. 3

4. Alaskas Energy Situation North Slope energy rich 30+ Trillion cubic feet of natural gas Cook Inlet Basin in decline Creating uncertainty as early as 2018 Cost of residential heat Fairbanks heating oil ~$30/MMBTU Cook Inlet natural gas $9 - $10/MMBTU 4

5. 2013 Legislative Action – AGDC & HB4 Authorizes AGDC to construct gas pipeline from Prudhoe Bay to Fairbanks and Southcentral Alaska Established a new public corporation Authorizes AGDC to work on ASAP plus other projects, issue bonds, and determine ownership model Established a 7-member Board of Directors Authorizes AGDC to issue revenue bonds Creates new regulatory framework for contract carriers Requires all state departments, agencies, and public corporations to work expeditiously with AGDC on permits and authorizations Provided $355 million in 2013 to advance the ASAP project to open season and sanction 5

6. Cook Inlet Basin Production Forecast 6

7. ASAP Project Scope Mainline 36 diameter pipe 737 miles long 1,480 psi max operating pressure Fairbanks Lateral 12 diameter pipe 35 miles long Tie-in w/mainline at MP 458 500 Mmscf/day – AGIA limit North Slope Gas Conditioning Facility (GCF) at Prudhoe Bay More off-takes possible 7

8. Stage Gate Approach 8

9. ASAP Work Underway Preparing for new AGDC organizational structure Project Execution Plans First board meeting held October 30, 2013 Program Management Contractor (PMC) on board 2013 major work activities Advancing FEL-2 (Pre-FEED) facilities and pipeline engineering – Open season management contractor selected – Construction planning and logistics – Regulatory engagement – PHMSA special permit – 2013 winter field programs 9

10. Field Program Continues Winter 2013-14 Hundreds of geotechnical boreholes from Yukon River to Point Mackenzie Geohazard investigation Stream crossing surveys Air monitoring: 18-month duration Terrain unit mapping Cultural resource surveys Routing surveys 10

11. Preliminary Design – Phase I Tasks Task 1 – Geothermal Methodology Task 2 – Initial Frost Heave Analysis Task 3 – Geo-database Development Task 4 – Field Program Development Task 5 – Line Pipe Materials Research 11

12. Design Approach Flowchart 12

13. Line Pipe Materials Research Research material specifications for arctic applications Develop schedule for line pipe material development Identify and contact potential suppliers and review Line Pipe requirements Acquire material samples for small-scale testing Complete small-scale material tests 13

14. 14 ASAP System Schematic

15. 15 Gas Processing North Slope Gas Conditioning Facility

16. ASAP - Composition 16 ComponentMole % Methane (C 1 ) 88.75 Ethane (C 2 ) 5.93 Propane (C 3 ) 1.83 i-Butane (i-C 4 ) 0.09 n-Butane (n-C 4 ) 0.14 Pentanes+(C 5 +) 0.07 Carbon Dioxide (CO 2 ) 2.50 Nitrogen (N 2 ) 0.69 Hydrogen Sulfide (H 2 S) 0.00

17. ASAP – Pipeline Pressure Profile 17

18. ASAP – Pipeline Temperature Profile 18

19. ASAP – Pipeline Materials 19 Design ParameterASAP MainlineFairbanks Lateral Nominal Pipeline Diameter 36 inches12 inches Maximum Allowable Operating Pressure 1,480 psig Yield Strength (SMYS) 70.0 ksi52.0 ksi Pipe Specifications API 5L PSL2 Manufacturing Process DSAWDSAW or HFERW Maximum Operating Temperature 60 F Minimum Design Temperatures (for ductility analyses) –50 F for Aboveground 0 F for Buried 0 F Wall Thickness, Weight per Foot Location Class 1 F = 0.72 0.527 inches, 199.4 lb/ft0.330 inches, 43.7 lb/ft Location Class 2 F = 0.60 0.632 inches, 238.5 lb/ft0.330 inches, 43.7 lb/ft Location Class 3 F = 0.50 0.758 inches, 285.0 lb/ft0.330 inches, 43.7 lb/ft Location Class 4 F = 0.40 0.947 inches, 354.5 lb/ft0.375 inches, 49.5 lb/ft

20. ASAP –Arctic Geohazards 20

21. Maximum Curvature vs. Time 21

22. ASAP –Planned Material Tests 22 Working with Potential Material Vendors Expecting Pipe to be Tested by Summer Planning both small scale and full scale tests Small scale tests to fully identify material inputs to project predictive models Full scale tests to validate the project predictions

23. Typical Pipeline Construction 23

24. 24 Almost entirely buried except: North Slope Fault Crossings Some Major waterways Mainline

25. Scale of Construction Activities Considerable construction workforce Over 8,000 direct jobs Over 15,000 indirect jobs 335,000 tons of steel for the pipeline 9,000 truckloads of pipe travelling 4 million miles 10 million cubic yards of earthwork 15 construction camps 6 construction spreads 3 years to construct – winter and summer construction 25

26. ASAP Schedule 26

27. ASAP Cost to Consumers 27 Heating Cost Comparison Fairbanks NowFairbanks ASAP Estimate Natural Gas - $23.35Natural Gas - $8.25-$10 Diesel - $30.00 Anchorage NowAnchorage ASAP Estimate Natural Gas - $9.65Natural Gas - $9 - $11.25 Price listed per 1 MMBtus (1,000,000 btus) in 2012 dollars. Estimated cost of gas to consumers at the burner tip.

28. Questions? Alaska Gasline Development Corporation 3201 C Street, Suite 200 Anchorage, Alaska 99503 (907) 330-6300 www.agdc.us 28 Frank Richards, P.E. ASAP Pipeline Engineering Director Keith Meyer, P.E., Ph.D. ASAP Pipeline Engineering Manager