1. THE NORTH AMERICAN LNG OPPORTUNITY APEGGA, Calgary, Alberta
Andrew Stephens
Vice President, Planning and Corporate Communications
October 13, 2005

2. Disclaimer
LEGAL NOTICE - FORWARD LOOKING INFORMATION/RESERVES ESTIMATES
This presentation contains forward-looking statements. Such statements are generally identifiable by the terminology used, such as “plan,” “anticipate,” “intend,” “expect,” “estimate,” “budget” or other similar wording. Forward-looking statements include, but are not limited to, references to future capital and other expenditures, drilling plans, construction activities, the submission of development plans, seismic activity, refining margins, oil and gas production levels and the sources of growth thereof, results of exploration activities and dates by which certain areas may be developed or may come on-stream, retail throughputs, pre-production and operating costs, reserves estimates, reserves life, natural gas export capacity and environmental matters. These forward-looking statements are subject to known and unknown risks and uncertainties and other factors which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements. Such factors include, but are not limited to: general economic, market and business conditions; industry capacity; competitive action by other companies; fluctuations in oil and gas prices; refining and marketing margins; the ability to produce and transport crude oil and natural gas to markets; the effects of weather conditions; the results of exploration and development drilling and related activities; fluctuation in interest rates and foreign currency exchange rates; the ability of suppliers to meet commitments; actions by governmental authorities including increases in taxes; decisions or approvals of administrative tribunals; changes in environmental and other regulations; risks attendant with oil and gas operations; expected rates of return; and other factors, many of which are beyond the control of Petro-Canada. These factors are discussed in greater detail in filings made by Petro-Canada with the Canadian provincial securities commissions and the United States (U.S.) Securities and Exchange Commission (SEC).
Readers are cautioned that the foregoing list of important factors affecting forward-looking statements is not exhaustive. Furthermore, the forward-looking statements contained in this presentation are made as of the date of this presentation, and Petro-Canada does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this presentation are expressly qualified by this cautionary statement.
Petro-Canada’s staff of qualified reserves evaluators generates the reserves estimates used by the Company. Our reserves staff and management are not considered independent of the Company for purposes of the Canadian provincial securities commissions. Petro- Canada has obtained an exemption from certain Canadian reserves disclosure requirements to permit it to make disclosure in accordance with SEC standards in order to provide comparability with U.S. and other international issuers. Therefore, Petro- Canada’s reserves data and other oil and gas formal disclosure is made in accordance with U.S. disclosure requirements and practices and may differ from Canadian domestic standards and practices. Where the term barrel of oil equivalent (boe) is used in this release it may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet (Mcf): one barrel (bbl) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. The use of terms such as “probable, “possible,” “recoverable” or "potential” reserves and resources in this presentation does not meet the guidelines of the SEC for inclusion in documents filed with the SEC.

3. Agenda
Who is Petro-Canada
Natural gas supply/demand outlook
LNG value chain components and economics
Cacouna Energy project
Conclusion and questions

4. Five Core Businesses East Coast Oil Oil Sands
North American Natural Gas
Petro-Canada
One of Canada’s largest integrated oil and gas companies
A significant international player
Five world-class core businesses
2004 production of 305,700 Bbl/d of liquids and 873 MMcf/d of gas (before royalties)
Petro-Canada shares trade on the Toronto (PCA) and New York (PCZ) stock exchanges
Market capitalization of CAD $23.5 Billion
Corporate headquarters in Calgary (North America) and international headquarters in London (England)
Petro-Canada’s Gas Business
Focus
Explore for, produce and market natural gas and associated liquids
Strategy
Maximize profitability in Western Canada and U.S. Rockies through focused exploration and development
Pursue high-potential exploration plays in North America (Mackenzie Valley, East Coast offshore, Alaska and Unconventional Gas)
Expand role in global LNG business beyond Trinidad with a proposed re-gas terminal in Quebec
Lever position as one of Canada’s largest gas exporters
Maximize value from Natural Gas Marketing in Canada and the United States
International
Downstream

5. Supply/Demand Outlook
Natural Gas
Supply/Demand Outlook

6. U.S. Gas Demand > Domestic Supply
Tcf/year 30 25
Consumption
Net imports
Net imports 20
Production 15
Natural Gas Net Imports, 2003 and 2025 (Tcf)
Natural Gas Net Imports, 2003 and 2025 (Tcf) 10 5
Pipeline
LNG
Pipeline
LNG
1960
1970
1980
1990
2000
2010
2025
Source: EIA’s Annual Energy Outlook 2005

7. What’s Driving U.S. Gas Demand?
U.S. Electricity Generation by Fuel, 2003 and 2025
(billion kilowatthours)
U.S. Electricity Generation By Fuel, 2003 and 2025
billion kilowatt
hours
Share of Gas-Fired
Generation increases 50%
Share of Gas-Fired
Generation Increases 50%
Source: EIA’s Annual Energy Outlook 2005

8. LNG Helps Fill U.S. Supply Gap
TCF/Y 15 20 25 30
2005
2010
2015
2020
2025
Growth in Alaskan production
Growth in
non- -
associated unconventional
Growth in LNG imports
Base production (all sources)
Source:
Source:
EIA’s Annual Energy Outlook 2005

9. Global Gas Supply And Consumption57 72 79 50 30 18 76 73 10
Russia & FSU 23 27
261
Europe
N. America 36 31 44 7 14 97 11 13 55
Middle East
Asia Pacific
C & S America
Africa
Consumption
(BCF/D)
Production
(BCF/D)
R/P Ratio
(Years)
Source: BP Statistical Review of World Energy

10. Testimony to U.S. House Energy Committee
The Importance Of LNG
“Access to world natural gas supplies will require a major extension of LNG terminal import capacity…. Without the flexibility that such facilities impart, imbalances in supply and demand will engender price volatility.”
Alan Greenspan
Testimony to U.S. House Energy Committee
June 10, 2003

11. Components And Economics
LNG Value Chain
Components And Economics

12. Typical Investment (500 MMcfd / 3.5 Mt/yr)
LNG Value Chain
Typical Investment (500 MMcfd / 3.5 Mt/yr)
Capex $ MM
Upstream LNG
Marketing
Regas
Transport
Liquefaction
Upstream

13. LNG Block Flow Diagram Natural Gas Acid Gas Removal Dehydration
Mercury
Gas
Wells
Reception
Liquefaction
Condensate
Stabilisation
Fractionation
Utilities
Storage
and
Loading
LNG
LPG
Treatment

14. The Liquefaction Process

15. Heat Exchanger

16. Photos courtesy of CH-IV International
LNG Carriers
Tanker Details
The standard LNG tanker size is 138,000 m3, carries about 2.9 bcf of gas after regasification, travels at knots, has an unloading rate of 8,000-12,000 m3 per hour (taking hours to unload), and has an average cool-down time of hours
Since 2000, the number of ships has increased from 127 to 175, resulting in a glut of 5-10 vessels on the current spot market
Approximately 65 ships are on order
New LNG carriers typically cost in the range of $150-$200 million (US) depending on size
Ships as large as 250,000 m3 are being planned, but will require compatible terminals
Only 8 shipyards in the world build LNG tankers: 3 in Japan, 3 in Korea and 2 in Europe
New ships typically take 2 years to build, but orders are often placed 4-5 years in advance of delivery to secure a berth at a shipyard
Source: EIA
Photos courtesy of CH-IV International

17. Shipping - A Critical Cost Factor
DISTANCES
(in nautical miles from Dataloy AS)
Quebec Gulf of
Mexico
Baltic 3,784 6,076
Nigeria 4,924 5,936
Qatar 8,113 9,753
Trinidad 2,684 2,232
Differentials:
Baltic – Cacouna is 2,292 miles closer than GOM
Nigeria – Cacouna is 1,072 miles closer than GOM
Qatar – Cacouna is 1,640 miles closer than GOM
Trinidad – GOM is only 452 miles closer than Cacouna
Trinidad
Shipping costs for Quebec LNG regasification terminals will be $0.15 to $0.25 lower than the Gulf of Mexico

18. Re-gasification Process

19. Existing And Proposed LNG Terminals In North AmericaB C D E
Source: FERC

20. Potential LNG Terminals In North America
Source: FERC

21. At What Market Price Is LNG Economical For North America?
The graph shows prices at which terminals in these areas return a fair cost of capital to LNG value chain participants. Given that today’s market prices are much higher, LNG is a very economical source of gas.
These prices are for pipeline gas downstream of the regasification facility.
In order to get current $ prices, you can probably add $ /mcf (assumes 3% inflation).
Source: EIA’s 2005 Annual Energy Outlook

22. The Cacouna Energy Project

23. Project Overview Average send out capacity of about 500 MMcf/d
TransCanada and Petro-Canada share construction costs of about $660 million
TransCanada: facility operator with transportation expertise
Petro-Canada: LNG supplier with marketing experience and international upstream supply business

24. Gros-Cacouna Terminal And Ship
The Cacouna Energy Project
Joint development by Petro-Canada and TransCanada
LNG import terminal with capacity for regasification of 500 mmcf/d
Two LNG storage tanks with total capacity for 7 bcf of LNG (320,000 cubic metres)
Estimated capital cost of C$ 660 Million
Approximately one LNG cargo each week
The terminal will be designed to accommodate LNG carriers with capacities up to 216,000 cubic metres of LNG
Siting based on water depth and berthing capabilities,
storage capacity and take-away pipeline capacity.
Artist’s Rendition

25. Stakeholder Relations
Direct employment of 500 to 1,000 people during construction
30 to 50 long-term positions to operate facility
Regulatory approval process to take two years
Environmental impact statement filed in spring 2005
Public hearings in 2006
Community referendum supports project in September

26. Northeastern Canada and United States
Market Advantage
Absorption Advantage
Northeastern Canada and United States
Ontario, Quebec, New England and Mid-Atlantic Market Demand
New England Market Demand
Gros-Cacouna LNG easily absorbed: limited price ramification
Other Canadian LNG has major impact: prices spiral down
Impact of 10 Bcm/yr LNG into Each Market 7%
40% 20 40 60 80
100
120
140
160
Bcm/yr
The Gros-Cacouna site has significant advantages over other potential Canadian Regasification sites with respect to arket absorption.
Whereas other potential Canadian re-gasification sites are limited to serving the much smaller New England Market, Gros-Cacouna has the advantage of being able to serve markets in Ontario, Quebec, New England and the Mid-Atlantic US.
Given their combined size, the markets we are targeting can more easily absorb incremental LNG volumes from Gros-Cacouna.
Because other Canadian sites are targeting much smaller markets, there is a potential to cause a major downward pressure on prices in those markets.

27. Progress On Russian LNG Project
Gas grid to feed LNG export
Progress
MOU – Oct. 2004
Feasibility report – May 2005
Commercial proposal – June
Discussing Interim Development Agreement
Risk mitigation
Project financing
Gazprom partnership
Reciprocal investment
Vyborg
Primorsk
We have been making progress on importing gas from Russia – through a joint LNG project with Gazprom. We call this Baltic LNG.
Our strategic goal is to lever off high US gas prices by supplying NW US with Russian gas supply.
We are developing an LNG project opportunity in the St. Petersburg oblast (region) with the aim of exporting 3.5 to 5 mmtpa (or 500 to 700 MMcf/d). The project has the potential to produce at this constant level for 30 plus years.
Gas would be supplied from the vast Russian gas grid and has the potential to come on stream five years or more ahead of LNG from the Barents sea or Yamal peninsular.
Recent progress has been encouraging. We signed an MOU with Gazprom in October of 2004, developed a feasibility report by May of this year and recently put forward a commercial proposal for the project.
We are currently undergoing discussions with Gazprom with the goal of signing an Interim Development Agreement to progress this project.
This project is well positioned with respect to risk mitigation and management:
it entails project financing
our partner - Gazprom – has significant control over domestic gas supplies and transportation links, and
the project envisions reciprocal investment by Gazprom throughout the LNG value chain. – we and Gazprom want good alignment all throughout the value chain.
This is a ground breaking project for Petro-Canada and Gazprom where we could gain first mover advantage in supplying Russian gas to US markets.

28. Project Schedule
Sept 2004 – June Prepare and file regulatory applications
July 2005 – Q Application review and approval process
2007 – Design and construction
Q Facility start-up

29. Petro-Canada’s Capabilities
Solid operator of large projects
Track record of successful stakeholder relations
Relationships with suppliers around the world
Marketing expertise through upstream and downstream business
Strong partners with TransCanada Pipelines and potential suppliers like Gazprom

30. Conclusions
LNG will be a critical supply source to meet growing North American demand
Siting of re-gasification facilities is based on economics and community acceptance
A Quebec LNG facility has better access to markets and lower shipping costs
Petro-Canada has the experience, capability and partners to bring LNG to North America