1. Overview & Status
July 18, 2001

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

3. 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

4. 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

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

6. 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

7. 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

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

9. 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

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

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

12. 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

13. 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

14. 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