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DELAWARE RIVER. Wharton Storage. National Fuel. TGPL-Leidy Interconnects. 24". Greenlick Storage. 24"-24"-30". Dallas. Wyoming. Muncy. Hughesville. Tamarack. Saylor. 520. 36". 24". 517. Wyoming. Monument. Young Women's. 24"-24"-36". Avis. Old Lycoming. Creek. 515. Hazelton.

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  1. DELAWARE RIVER Wharton Storage National Fuel TGPL-Leidy Interconnects 24" Greenlick Storage 24"-24"-30" Dallas Wyoming Muncy Hughesville Tamarack Saylor 520 36" 24" 517 Wyoming Monument Young Women's 24"-24"-36" Avis Old Lycoming Creek 515 Hazelton 24"-24"-36" 24"-36" Rivervale Rivervale Shickshinny Fairlawn Humboldt E. Rutherford Paterson Paramus Clifton 30" DELAWARE RIVER 36" Ridgefield Palmerton Roseland Central Manhattan Chatham SUSQUEHANNA RIVER Martin's Creek Harrison North Av. 12" Essex Gillette New Village P A Allentown Piles Creek Hoechst Spruce Run Erie St. Celanese 30" 30"-36" 36" Richmond 26" Sewaren Bridgewater Narrows Clinton Cloverleaf Grasmere 505 Centerville 36" Grandview Ford Motor Lambertville 42" 30"-42" Sayreville Long Beach PRINCETON JUNCTION 205 Ivyland Pennington 24" 30"-36"-42" Pottstown 16" U.S. Steel Warner Lime Coventry 30"-36"-42" 6" 16" 8" 12" Somerton Oreland Hamilton, 200 8" 8" Hamilton Mercer LNG Ashmead Rd. 16" Westampton 20"-30" LNG Burlington 30"-36"-36" W. Conshohocken Parkesburg Pennsauken Richmond Downingtown Coatesville Mt. Laural N J Camden Nolte Chelton Rd. 14" W. Parkesburg Shell Chemical Brooklawn Cogen Lawnside Kennett Square 20" Chester MarketLink Expansion Project Zone I - Zone II - Zone III - 10 Yr - $ 0.18 10 Yr - $ 0.30 10 Yr - $ 0.35 15 Yr - $ 0.17 15 Yr - $ 0.29 15 Yr - $ 0.34 NORTH PENNSYLVANIA GAS CO. PENNSYLVANIA GAS & WATER CO. ORANGE & ROCKLAND CO. ELIZABETHTOWN GAS CO. UGI GAS SERVICE CO. N. J. NATURAL GAS CO. COLUMBIA GAS OF Windgap PENNSYLVANIA LNG R 30"-36" Montclair St. Hudson Marion R R R Linden Regulator Squibb Belle Morgan Mead PECO ENERGY. UGI GAS SERVICE CO. Hydrocarbon Research Trenton NEW JERSEY NATURAL GAS CO. R Whitman SOUTH COLUMBIA GAS OF JERSEY GAS PENNSYLVANIA CO.

  2. MarketLink Expansion Project • Opportunity • Overview • ENA MarketLink Position • Market Analysis • Economics • Exit Strategy • Background Information • Competition • Generating Plants

  3. Opportunity • Acquire capacity in constrained Transco Zone 6 New York market • Premium priced pipeline • Limited expansion of a highly utilized pipe (85+%) with high potential for demand growth • Critical segment of market-area pipeline without long-haul cost risk

  4. Pipeline Network Canada Alliance Pipeline New York City Leidy, PA Defiance, OH Transco MarketLink Independence Pipeline Chicago ANR SupplyLink Linden Regulator Princeton Junction Leidy Interconnects with: Columbia Gas Dominion (CNG) Independence National Fuel Tennessee Gulf Coast Transco Mainline All Projects Have Received FERC Certificates. No Regulatory Risk

  5. MarketLink Overview • Transco expansion from Leidy, PA to New York City by looping and adding compression approved by FERC on 4/26/00 • 700,000 Dthd total capacity increase in two phases • Precedent Agreements with 7 shippers totaling 770,600 Dthd Engage (NY) Enron (NY) LFG Energy Dynegy Amerada Hess (NY) Sunset Energy Williams (NY) • Tiered demand pricing structure • $0.18/Dth 100% load factor rate for deliveries south of Princeton Junction • $0.30/Dth south of Linden • $0.35/Dth north of Linden (Transco Zone 6 New York) • First phase begins service 11/2001 with 280,000 - 370,000 Dthd depending upon final service agreements • Only 200,000 Dthd primary into Transco Zone 6 New York market in first phase. Zone 6 NY volume limited by FERC filing to 394,000 Dthd.

  6. ENA MarketLink Position • Precedent Agreement executed 5/7/98 • 30,000 Dthd MDQ • 10 year term starting in 11/2001 • Primary delivery points as proposed • 10,000 Con Ed (Z6 New York) • 10,000 PSEG (Z6 New York) • 10,000 Brooklyn Union (Z6 Non-New York)

  7. Market Analysis • Transco has high load factor • 85%+ 1999 • 84% 1998 • 85% 1997 • 82% 1996 • 92% 1995 • Transco allocated at the Linden regulator 92 days during the last winter and only allowed primary deliveries on 29 days • NYISO condition that 80% of total load requirements must be sourced from in-City installed capacity (Locational Installed Capacity requirement) • NYISO Locational Installed Capacity requirement for Long Island is 93%

  8. Economics Mark to Market Value: • $5.325 MM Basis Spread NPV ($0.0747/Dth) • $135K - $1.884 MM Spread Option NPV ($0.0025 - $0.025/Dth) • Based on $0.3004/Dth 100% load factor demand, $0.0041/Dth demand & commodity surcharges and 0.84% fuel

  9. Additional Value Opportunity • Cumulative intra-month balancing on contract up to 5% of volumes transported (up to 46,500 Dth on ENA volume) • Intra-day balancing on contract up to 10% of MDQ • Ability to segment capacity and transport from Non-New York pooling point to deliveries south of Princeton Junction • Backhaul to Transco Zone 5 or Zone 4 during periods of forward haul constraint within these zones

  10. Exit Strategy MTM economics are positive for entire term, but potential risk mitigation for out years: • Utilize capacity during first three to five years of contract and flip to an Enron or third party electric generation project • Leverage contractual asset into New England delivery through asset management of New York player with Iroquois capacity or other New England deliveries • Release capacity or make delivery to retail marketer who requires firm delivery into Transco Zone 6 New York market

  11. Competition - Iroquois • Eastchester Extension Project filed with FERC on 4/28/00 expands Iroquois by 220,000 Dthd • Expands mainline capacity and extends system from Northpoint, Long Island through the Long Island Sound to connect with Con Ed in the Bronx • Additional supplies to come from Waddington • Two phase project in which first phase supplies 70,000 Dthd to Orion’s Astoria Generating project by 4/2002 • Remaining capacity would be in place by 11/2002 • Executed Precedent Agreements with Astoria, Con Ed, Keyspan Ravenswood, Engage Energy and Riverbay Corporation

  12. Competition - Millennium • Columbia/MCN/TCPL/Westcoast partnership project filed with FERC on 12/22/97 for 700,000 Dthd • Pipeline would transport from Dawn to New York City • Project in jeopardy due to NiSource acquisition of Columbia and right-of-way problems in New York • Project may not get approvals for deliveries into NYC • Scheduled to access electric generation projects above NYC

  13. NYC Generation Plants Pending NYC Electric Generating Facility Applications before the New York State Siting Board Estimated MW Developer In-Service Date Astoria Energy 1000 SCS Energy 3Q 2003 East River Repowering 360 Con Ed 2Q 2002 Poletti Station Expansion 500 NYPA 3Q 2002 Ravenswood Cogen 250 Keyspan 3Q 2002 Sunset Energy Fleet, LLC 520 SEF 2002 Oak Point Energy 1075 Oak Point, LLC 4Q 2003

  14. Regional Generation Plants Planned Generation Capacity Additions in the NPCC and PJM regions close to Transco Estimated MW Developer In-Service Date Linden 125 Cogen Tech 2001 Linden 1100 PG&E 2Q 2003 Linden 1100 PSEG 2Q 2003 Mantua Creek 800 PG&E 2Q 2002 Eden Township 90 PPL Global 2Q 2002

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