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Western Conference of Public Service Commissioners

Western Conference of Public Service Commissioners Natural Gas and the Provision of Electricity: Is there enough?. North America Market Growth: Forecasted to Reach 30Tcf by 2015. ANNUAL (Tcf). Key Drivers: North American economic growth Electric Power Generation e-world power requirements

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Western Conference of Public Service Commissioners

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  1. Western Conference of Public Service Commissioners Natural Gas and the Provision of Electricity: Is there enough?

  2. North America Market Growth:Forecasted to Reach 30Tcf by 2015 ANNUAL (Tcf) Key Drivers: • North American economic growth • Electric Power Generation • e-world power requirements • Clean Air Initiatives • Climate Change • Natural Gas is the Preferred Fuel

  3. The Canadian Oil and Natural Gas Industry Industry Profile

  4. Canada’s Oil andNatural Gas Industry • World’s 3rd largest natural gas producer • World’s 13th largest crude oil producer • Oil & gas trade surplus accounts for: • Close 50% of Canada’s trade balance • Employment near 500,000 in Canada • Invest close to $25 billion in 2001 • Largest single private sector investor in Canada

  5. Approximately 45% Of New Gas Supply To Come From Canada - Major New Pipe Needed Basin Supply Growth: 2000 - 2005 (bcf/d) + 0.10 + 2.7 Canada: 2.8 bcf/d US: 3.75 bcf/d Total: 6.55 bcf/d +1.4 + 0.3 - 0.10 Alaska and MacKenzie Delta gas assumed to come on beyond 2005. - 0.55 + 2.5

  6. Ultimate Potential of Natural Gas Other Frontier* 89 Tcf includes other regions offshore east coast & west coast Remaining North of 60 175 Tcf Produced Grand Banks and Scotian Shelf 63 Tcf British Columbia 50 Tcf Alberta 270 Tcf Saskatchewan 9 Tcf Source: NEB

  7. Western Canada - Gas Wells Drilled & Natural Gas Price 2001 Source: CAPP & ARC Financial forecast

  8. Northeast B.C. Supply Basin:Record Year for Wells Drilled Wells Drilled • 50 Tcf Ultimate Potential • 754 wells drilled • 1,204,000 metres drilled • Oil & Gas Incentive Initiatives

  9. Yukon Fort Liard N.W.T. Legend B.C. Westcoast Gas Services Helmet/ Plant (unregulated) Peggo/Pesh Gathering Fort Nelson Westcoast Energy Gathering Plant (regulated) Compressor Stn. Fort Nelson Fort Nelson Pipeline Fort Nelson Gathering Plant Alberta Fort St. John Gathering Buckinghorse Nova Jedney Plant Plant s Highway Sikanni Plant Plant Aitken Ck. Plant YUKON N.W.T. Fort St. John Boundary Lake BRITISH Plant COLUMBIA Fort St. John McMahon Plant ALBERTA CS 2 Chetwynd Pine Pine River River Plant U.S.A. Northeast British Columbia Supply:Supply Numbers Reaching Record Levels • Fort Nelson and southern NWT Area • very strong supply response • Fort Liard growth • Fort St. John Area • ample processing capacity • shallow finds • growing interest • Pine River Area • deep gas is economic • acid gas injection project • Plant full

  10. Top Natural Gas Wells in 2000/ 2001 2001 Wells:  Murphy/Apache @ Ladyfern - 100 mmcf/d  AEC @ Ladyfern - 60 mmcf/d Anderson - 27 mmcfd  Tethys/PetroCan @ Townsend- 11 mmcf/d  Anderson - 19 mmcfd  Talisman - 13 mmcfd Mobil - 18 mmcfd Petro-Canada - 15 mmcfd   Mobil - 15 mmcfd  Burlington - 15 mmcfd  NAL - 17 mmcfd  Petro-Canada - 14 mmcfd  Can 88 - 14 mmcfd  Source: First Energy

  11. Frontier Supplies:Potential B.C. Terminus Mackenzie Delta+1 Bcf/d - 2007/2008 Prudhoe Bay+2.4 Bcf/d - 2007/2008 Gordondale/Boundary Lake area 11

  12. The Alaska Highway Pipeline Project:Incremental Supplies by 2007/2008 31 Tcf Proven 99 Tcf UltimatePotential • 2700 km (Prudhoe Bay to Boundary Lake) • 2.5 Bcf/d increasing to 4 Bcf/d • Approval in-place • In-service 2007/2008 • Producers: • BP • ExxonMobil • Phillips Currently -- 8 Bcf Production - 7 Bcf Reinjection

  13. Mackenzie Delta:Incremental Supplies in 2007 to 2008 • 1760 km (Delta to Boundary Lake) • 1.0 Bcf/d to 2.0 Bcf/d • No Current production • Producers: • Imperial • Gulf • Shell • Burlington • Petro-Canada • AEC • Anderson 9 Tcf Proven (3 Tcf Off-shore) 64 Tcf UltimatePotential

  14. Natural Gas Supply Challenges • Access to the resource • Timely approval processes • Rising costs - tax, F&D, land, power • High decline rates • Move to deeper areas - Shorter drilling season - Higher risk - Size and availability of deep rig fleet - Gas plants constraints in deeper areas - More sour gas

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