1. 1 TAPS 2013 Overview Presentation to 32 nd USAEE/IAEE North American Conference July 29, 2013 Tom Barrett, President

2. 2 Abundant resources OFFSHORE ARCTIC o 27 bbo o 132 tcf gas o Est. 54,000 jobs (nationwide) COOK INLET o 599 mbo o 19 tcf gas ANWR o 10 bb0 o 3.5 tcf gas NPR-A o 896 mbo o 53 tcf gas ONSHORE NORTH SLOPE o Conventional: 5 bbo, 35 tcf gas; o Heavy/Viscous: 24-33 bbo; o Unconventional: 2 bbo,12 tcf gas mbo = million barrels of oil bbo = billion barrels of oil tcf = trillion cubic feet

3. 3 TAPS background Designed as hot pipeline in an arctic environment 48-inch diameter 800 miles long – 420 miles above ground, 380 miles below ground Overcame operational challenges – Remote locations – Permafrost – Large river crossings – Extreme weather – Three mountain ranges – Seismically active regions (safely withstood 7.9 earthquake in 2002)

4. Steadily declining throughput 2014 32° F with 18 Day Transit from Prudhoe Bay To VMT 1988 100° F+ with 4 Day Transit from Prudhoe Bay to VMT Issues & urgency – Water dropout – Ice formation – Wax deposition – Frost heaves – Snow accumulation

5. Greatest economic threats to Alaska

6. 6 AOGA: 1/3 of all Alaska's jobs, about 110,000, are attributed to the oil and gas industry. Fuels 1/3 of Alaska’s economy. 95% of Alaska’s general fund revenues. Annual tax payments to municipalities throughout Alaska. Permanent Fund. Continued production decline. TAPS economic impacts

7. 7 Cold weather operations

8. 8 Warm weather operations

9. 9 Strong safety culture The target: flawless operations, nobody gets hurt Incident and hazard reporting Proven safety tools and processes Anyone can stop work “Speak up, step up”

10. 10 Integrity Management Program Digs & inspections Cleaning pigs In-line Inspection tool Above-ground piping $75-$100M per year in ongoing maintenance and integrity programs.

11. 11 TAPS scraper pigs Low throughput leads to greater wax, slower pig velocities. Ongoing adjustment of pig design and protocol.

12. 12 2013 ILI “smart pig” run 2013 “smart pig” run launched on March 15. Low flow challenges addressed: wax build up, slack line, slow velocity.

13. 13 Committed to conservation

14. 14 Commitment to environment SERVS Ship Escort/Response Vessel System (SERVS) Tanker escorts, spill prevention and response World-class Fleet includes enhanced tractor tugs, barges and work boats 300+ privately owned vessels contracted to assist in an incident Dozens of drills/exercises annually

15. 99.8 % reliability delivered for the State of Alaska

16. Determination, ingenuity, partnership