1. Creating Energy Sustainability in a Global Context Lessons Learned Jamie Sawchuk, Partner The Pacific Northwest Gateway to Asia Energy: Asia Demand – Canadian Response Canadian International Council Conference October 28 th, 2014

2. © Deloitte LLP and affiliated entities. Permission, Copyright and Warranty Permission –The information, in whole or in part, contained in this presentation can not be used without the expressed written consent of an authorized official of Deloitte LLP (“Deloitte”). Copyright Notice –All ownership rights, title, and other property rights to all text, image and other materials contained or displayed in this Deloitte document, belong to Deloitte and constitute valuable intellectual property. Warranty –The data contained in this presentation, although believed to be accurate, is not warranted or represented by Deloitte to be so. 1Deloitte Confidential - CIC Energy-Asian Demand-Cdn Response, October 28th, 2014

3. © Deloitte LLP and affiliated entities. Global Context 1. Liquefied Natural Gas (LNG) has the potential to become integral to Canada’s natural gas future 2. Asia is interested in Canadian LNG Diversity of Supply Canada’s History as an Natural Gas Exporter Cleaner, Energy Supply Large natural gas reserves Friendly, Stable Country Cold Weather (lower cost to liquefy) 3. Canada, including industry, government – and importantly First Nations – are looking to safely and sustainably export LNG to Asia 2Deloitte Confidential - CIC Energy-Asian Demand-Cdn Response, October 28th, 2014

4. © Deloitte LLP and affiliated entities. Global Context Competing in a global marketplace Deloitte Confidential - CIC Energy-Asian Demand-Cdn Response, October 28th, 20143 4. Multiple consortiums are considering making billions of dollars of investments in Canada and specifically British Columbia 5. Facing global competition from US brownfield as well as Africa, Australia, S.E. Asia, Qatar and Russia

5. © Deloitte LLP and affiliated entities. Global Context Canadian energy projects compete for global capital 4Deloitte Confidential - CIC Energy-Asian Demand-Cdn Response, October 28th, 2014 The economic benefits to the region getting the capital investment are enormous. For some regions – like Mozambique – the potential investment is massive relative to the existing economies 20% 17%50% 68% 123% 467% $ billions (not to scale) Megaprojects as a share of GDP Megaprojects capex versus 2012 GDP

6. © Deloitte LLP and affiliated entities. Canada’s LNG – Will we go through the “Hype” lifecycle? 5 Illustrative LNG Hype Lifecycle ? Time Is the Hype Here? Growing MomentumOvercoming BarriersBuild-out & Operations Expect consolidation over the next two years as consortiums sell down equity positions to reach Final Investment Decision (FID) Hype Companies will spend hundreds of millions getting to FID Companies will spend billions post-FID FID Long Term Trend Investment requires a more pragmatic view A challenge…or an opportunity? Deloitte Confidential - CIC Energy-Asian Demand-Cdn Response, October 28th, 2014 … or here?

7. © Deloitte LLP and affiliated entities. A challenge…or an opportunity? Social License is setting the bar Source: Urban Institute — National Center for Charitable Statistics, “Foundation Giving Trends, 2009” (Foundation Center), Legal Social Time Investigate / Posit Publish Monitor Activist Action Cycle Level of Expectation Gap 6Deloitte Confidential - CIC Energy-Asian Demand-Cdn Response, October 28th, 2014

8. © Deloitte LLP and affiliated entities. 7Deloitte Confidential - CIC Energy-Asian Demand-Cdn Response, October 28th, 2014 28% Economic Trends | Competition 32% Business Model 40% Reputation Today 26% Reputation 28% Economic Trends 41% Brand 2010 Deloitte: Exploring Strategic Risk: A Global Survey, 2013 A challenge…or an opportunity? Businesses now cite reputation as the No. 1 risk

9. © Deloitte LLP and affiliated entities. A challenge…or an opportunity? Can we learn from Australia’s LNG experience or are we destined to repeat it? Moving from a “high speed, high cost” mentality to a “low cost / operational excellence” approach 8Deloitte Confidential - CIC Energy-Asian Demand-Cdn Response, October 28th, 2014

10. © Deloitte LLP and affiliated entities. Gas market A challenge…or an opportunity? New models for collaborative competition are emerging 9Deloitte Confidential - CIC Energy-Asian Demand-Cdn Response, October 28th, 2014 Increasing complexity and formality of structure Asset value Industry value Operations Value Regulatory/ Infrastructure Basic communications E.g., APPEA “Our natural advantage” E.g., Queensland Resources Council APPEA Surplus goods disposal and Shared services outsourcing JVs and Common Engineering

11. © Deloitte LLP and affiliated entities. A challenge…or an opportunity? Key lessons on creating meaningful engagement BC United States Nigeria Papua New Guinea Kazakhstan Colombia Australia 10 Denmark Norway Deloitte Confidential - CIC Energy-Asian Demand-Cdn Response, October 28th, 2014 El Salvador