Carbon Capture and Storage EOR in the Rockies

1. Wyoming Pipeline Authority Carbon Capture and Storage EOR in the Rockies May 15, 2007 Michael Hollein Principal Financial Analyst (619) 696-2461 mhollein@sempra.com Richard Vaccari VP Mergers & Acquisitions (619) 696-1815 rvaccari@sempra.com

2. Sempra Utilities Sempra Global Sempra Generation Sempra LNG Sempra Pipelines & Storage Sempra Commodities SouthernCalifornia Gas San Diego Gas & Electric Sempra Energy

3. Sempra Energy Profile • 2006 • Net Income $1.4 billion • Total Assets $28.9 billion • Market Value $17.2 billion* • CAPEX $2.6 billion • Cash Flow from Operations $1.6 billion • Credit Rating (Unsecured) BBB+/Baa1 * At 4/24/07

4. Growing Leadership Position TRANSPORTATION & STORAGE DISTRIBUTION MARKETING NEW SUPPLIES Largest gas utility in the U.S. Leading developer of LNG receipt facilities Rockies Express is the largest pipeline built in 20 years No. 1 non-E&P, natural gas marketer in North America Serving 29 million consumers 150 Bcf of natural gas storage

5. Energia Costa Azul • 2006 Accomplishments • Construction 68% complete and initial capacity fully sold (100% ownership and 1.0 Bcf/d capacity) • Completed open season and filed for expansion permits • 2007 Goals • Prepare for commissioning by Q1 2008 • Obtain capacity commitments and permits for expansion (Expansion operational beyond 2012)

6. Liquefaction Capacity Pacific Uncommitted Committed Atlantic Middle East Source: Internal Assessment

7. Global Pricing NYMEX Oil NYMEX Gas Source: NYMEX, 1 bbl = 5.82 MMbtu

8. Fundamental Drivers Supply-demand imbalances in energy markets Globalization of energy markets Infrastructure requirements in North America Climate change agenda

10. The Perfect Storm for EOR in the Rockies Policy, legislative and public opinion are driving companies to reduce their CO2 footprint Prices for CO2 credits will rise dramatically High, sustained oil prices are a reality Rocky Mountain reserve base is increasing providing a strong foundation Electric prices are relatively low/reserve margins are good Numerous research groups such as Big Sky Regional Partnership, Enhanced Oil Recovery Institute, etc. provide valuable support Clean coal projects are moving forward – huge reliable CO2 sources

11. Reduction target Measures and costs Global GHG abatement cost in 2030 €/metric ton CO2-equivalent Global GHG emissions Billion metric tons CO2-equivalent 150 100 50 Average = ~4 0 -50 -100 Abatement potentialBillion metric tons CO2-equivalent per year -150 Mitigation - Targets, Measures and Costs • Typical “business-as-usual” (BAU) forecasts project a doubling of GHG emissions from today’s 42 Gt1 CO2e over the next 50 years. This corresponds to ~68 Gt in 2030 • The atmospheric concentration of CO2 needed to prevent most damaging climate change is generally believed to be 500±50 ppm, or less than double the pre-industrial level of 280 ppm. The current concentration is 375 ppm. Very roughly, stabilization at 500 ppm requires emissions to be held near the present level • The target reduction of ~25 Gt CO2e can be achieved with today’s technology at a marginal cost of ~$50/mt2 • Negative-cost energy efficiency accounts for ¼ of the reduction, significantly reducing the average cost to society to just $5/mt • The gross total of $125 billion/year ($5/mt x 25 Gt) works out to ~0.2% of expected global GDP, or less than $15/person, before accounting for any potential benefits from GHG (and other) emission reductions • Assuming 1.5% annual global per-capita GDP growth through 2030, per-capita income would be ~2% lower than in the absence of any climate-change regulation 1 Gt: giga-ton (billion tons) 2 €1 = $1.25 Source: World Resources Institute; McKinsey & Co.; American Academy for the Advancement of Science

12. California AB32 overview California GHG emissionsMillion metric tons CO2e • Key provisions • Reduce California’s GHG emissions to 1990 levels by 2020 (176 Mmt, or 14% from current; 30% from 2020 “business-as-usual”) • Mandatory GHG emission reporting for significant emission sources • Market mechanisms (e.g., cap-and-trade) allowed, but not required; if implemented, reductions required by law or regulation, or that would otherwise occur, are not creditable • Regulations must achieve “maximum technologically feasible and cost-effective” emission reductions • CARB to be lead regulatory authority • Sector- and firm-level emission targets remain to be determined, but are not likely to be based on a sector-by-sector (or firm-by-firm) return to 1990 levels • Governor may adjust deadlines for “extraordinary circumstances, catastrophic events or threat of significant economic harm” “Business-as-usual” 176 Mmt AB32 target • Timeline • 6/30/07 Early-action measures released • 1/1/08 Reporting rules adopted • 1/1/09 Regulation scoping plan adopted • 1/1/10 Early-action measures take effect • 1/1/11 Emission-reduction regulations adopted • 1/1/12 Emission-reduction regulations take effect

13. European CO2 Pricing Source: Bloomberg

14. Sempra’s Role in the Carson Project • Steady source of relatively pure CO2 stream (pre-combustion sequestration) • Multiple sinks (miscible flood candidates) in Southern California

15. CO2 —EOR: Sempra’s National Vision * BP-CARSON project broadly overlays existing refineries (moved for pictorial clarity)

16. Supply Growth in the Rockies

18. 760 MMbbls 3.0 TCF 1,050 MMbbls 4.2 TCF 20 MMbbls 0.08 TCF 1,090 MMbbls 4.36 TCF 810 MMbbls 3.24 TCF 740 MMbbls 2.96 TCF Why Wyoming? Significant Opportunity • 4.5 Bbbls of technically recoverable reserves • 18 TCF of sequestered CO2 Naturally Occurring CO2 • CO2 reservoirs in CO, UT, WY, and MT • High concentration of CO2 in oil and gas reservoirs (anthropogenic CO2 from processing) Industry Knowledge • Successful CO2 Operations in CO, ND, UT, and WY 4,470 MMbbls of Technically Recoverable through EOR 17.9 TCF of CO2 Sequestration Potential

19. Rocky Mountain Anthropogenic CO2 System

20. Sempra Vision CO2 Sequestration Best long-term CO2 mitigant Large volumes possible EOR Sinks Most economic vehicles Numerous opportunities in the Rockies Only way to reduce footprint Gasifiers most attractive but will take time to build Refineries, chemical facilities, ammonia plants and large gas processing facilities attractive now! Anthropogenic Sources Open Access Pipeline Construct trunkline CO2 pipeline system Gather new sources over time AB32 Climate Action Partnership EU Standards Next election CO2 Sequestration On the Horizon

21. Why Sempra? Financial Strength Credibility Anthropogenic Focus CO2 Trading / Structuring Vision