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Red Lake Gas Storage Project Update

Red Lake Gas Storage Project Update. ACC Workshop Arizona Natural Gas Infrastructure February 2004. Red Lake Project Update. Red Lake project is moving forward Aquila is looking for investors and/or a buyer of the Red Lake Project

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Red Lake Gas Storage Project Update

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  1. Red Lake Gas StorageProject Update ACC Workshop Arizona Natural Gas Infrastructure February 2004

  2. Red Lake Project Update • Red Lake project is moving forward • Aquila is looking for investors and/or a buyer of the Red Lake Project • Aquila has received significant interest in the Red Lake project from the industry and the financial community • Due diligence is in process and should be concluded within the next 90 to 120 days • Red Lake decided to withdraw the ADEQ – Aquifer Protection Permit and Plant Site Air Permit. The reason was administrative, cost and timing for the issuance of the permit – the permit will be re-filed as soon as the new owner of Red Lake is known. • Red Lake is the right asset at the right time: • Recent FERC decision may allow Red Lake to receive Market Based Rate • The Commission has retained the maps and environmental materials prepared in support of Red Lake’s terminated certificate application to facilitate future applications. • Aquila has made a concerted effort to minimize the footprint of the operating facility. The location is away from airport, school or cities and will have a minimal impact on the environment.

  3. Red Lake Project Update Red Lake Gas Storage: • Location: Mohave Co., Arizona – 30 miles north of Kingman • Type of Storage: Salt cavern storage • Size: 12 to 16 Bcf working gas* • Withdrawal Rate: 900,000 to 1,200,000 Dth/d* • Injection Rate: 450,000 to 600,000 Dth/d* • Compression: 34,000 Hp* • Pipeline Connections: El Paso, Transwestern, Southern Trails, (Kern River, SoCal, PG&E) Proposed new El Paso Southern Mainline between Phoenix and Southern California • Anticipated In-Service Dates: Phase I (6.0 Bcf) June, 2006* Phase II (12.0 Bcf Total) June, 2007* Phase III (16.0 Bcf Total) June, 2008* * As proposed

  4. Red Lake – a unique geological salt structureaquifer and brine disposal formation

  5. Red Lake Gas Storage 36” Header System Southern Trail Interconnect El Paso Interconnect Needles Delivery Point Transwestern Interconnect Topock Delivery Point Red Lake Project Update • Red Lake Interconnects: • El Paso Natural Gas Northern Mainline • Transwestern Pipeline • Southern Trails • Future Interconnects: • El Paso Natural Gas Southern Mainline • Kern River • PG&E near Topock • SoCal Gas near Topock • Southwest Gas

  6. Red Lake Project Update Summary • Red Lake Next Steps: • Aquila will complete the sale process within 90 to 120 days • Drill brine disposal test well and core the Red Lake salt mass at the proposed facility location • Re-file FERC certificate of public convenience and necessity, section 7(c), requesting Market Base Rate treatment. • The Commission has retained the maps and environmental materials prepared in support of Red Lake’s terminated certificate application to facilitate future applications. • Re-file ADEQ – Aquifer Protection Permit and Plant site air permit using site specific test well data. • New Interconnects: • Open season for Red Lake’s El Paso Natural Gas Southern MainlineInterconnect between Phoenix and Southern California

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