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Transwestern Pipeline Company

Transwestern Pipeline Company. 2002 Plan Review October 12, 2001. Transwestern Pipeline Company Overview. 2002 Plan Market Environment Upside/Downside Projects. Transwestern Pipeline Company Commercial Group 2002 Operating Plan Commercial Contribution (Millions).

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Transwestern Pipeline Company

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  1. Transwestern Pipeline Company 2002 Plan Review October 12, 2001

  2. Transwestern Pipeline CompanyOverview • 2002 Plan • Market Environment • Upside/Downside • Projects

  3. Transwestern Pipeline CompanyCommercial Group 2002 Operating PlanCommercial Contribution(Millions)

  4. Transwestern Pipeline CompanyCommercial Group 2002 Operating PlanReconciliation of 2001 Plan to 2001 3CENet Commercial Contribution

  5. Transwestern Pipeline CompanyCommercial Group 2002 Operating PlanReconciliation of 2001 3CE to 2002 PlanNet Commercial Contribution

  6. Transwestern Pipeline CompanyCommercial Group 2002 Operating PlanNet Commercial Contribution Accountability(Millions)

  7. Transwestern Pipeline Company Capacity Subscription Level (including Red Rock)

  8. PGT Kern Southern Trails EPNG TWPL Transwestern Pipeline Company Expansions to California Filed With the FERC WA 200,000 MMBtu/d OR ID WY NV 1,010,000 MMBtu/d UT CO CA 120,000 MMBtu/d OK 150,000 MMBtu/d AZ NM TX 230,000 MMBtu/d

  9. Transwestern Pipeline CompanyExpansions to CaliforniaFiled With the FERC

  10. Transwestern Pipeline CompanyAdditional ExpansionsAnnounced

  11. Transwestern Pipeline Company NYMEX Prices ($/MMBtu)

  12. Transwestern Pipeline Company Basin Prices, Border Prices & Transport Rates * ($/MMBtu) average $0.236 average $0.057 * Transport Rates are net of fuel.

  13. 2001 Actual prices 107% of plan prices Actual unhedged volumes 213% of plan volumes 2002 Volumes to be significantly impacted by Red Rock outages (180,000/d April-May) I to I deals reduce volumes received in-kind Transwestern Pipeline CompanyUnhedged Fuel

  14. Transwestern Pipeline Company Fuel Prices 2001 vs. 2002 ($/MMBtu) 15,000/d @ $3.96 20,000/d @ $3.55

  15. Transwestern Pipeline Company Fuel Revenues 2001 vs. 2002 20,000/d @ $3.55 15,000/d @ $3.96 9,900/d @ $2.63 8,200/d @ $3.82

  16. Upside Negotiated rate proceeding: $10MM SoCal rate dispute: $2.2MM Downside Red Rock in-service delay: $1.1MM/month Gas prices: $.4MM/year (per $.10 variance) Agave & Amoco options to reduce MAXDTQ: $1.3MM Transwestern Pipeline CompanyPotential Impacts 2002 Plan

  17. Transwestern Pipeline CompanyLoad Factor Upside/Downside(Millions) • 92% load factor assumption • 1,065,000/d average throughput with Red Rock outages excluded * Red Rock outages included

  18. Transwestern Pipeline Company2002 Strategy • Risk Management • Further develop & implement current fuel hedging activities to meet financial targets • Analyze current fuel hedges & I to I transport deals for opportunity to profitably unwind • Continue to develop the tools (ie. Daily Balance Report) to optimize operational & financial management of physical risk (gas inventory) • Market Unsubscribed Capacity • Actively negotiate rollover of ROFR contracts • Maximize opportunities for incremental 50,000/d at Needles • Identify expansion projects to enhance supply/market access • Develop Strategic Business Partnerships • PG&E • Red Cedar • SoCal/Southern Trails

  19. Transwestern Pipeline CompanyProjects • Trans Pecos • Southern Trails • Caithness/Big Sandy

  20. Transwestern Pipeline Company TransPecos Project Nevada Utah Colorado NNG California Kansas New Mexico Oklahoma TWPL Arizona Texas • TW/KM LOI executed • TP/Pemex LOI tendered: • 250,000/d @ $.2950/MMBtu • Pemex counter-offer: • 240,000/d @ $.25/MMBtu NGPL TransPecos

  21. Transwestern Pipeline Company Southern Trails Project Nevada Utah Colorado NNG California Kansas Southern Trails New Mexico Oklahoma TWPL Arizona • RFP to purchase • West leg, due Oct 15th • In-service 7/2002 • “East” San Juan to CA border: • 87,500 MMBtu/d • “West” CA border to Long Beach: • -120,000 MMBtu/d Texas

  22. Transwestern Pipeline Company Caithness/Big Sandy Project Nevada Utah Colorado NNG California Kansas New Mexico Arizona Oklahoma TWPL Big Sandy Texas • Caithness will build 41 miles to TW • Interconnect cost to TW, $550 K • 780 MW baseload generating plant • Phase I: 520 MW, 90,000/d, Q4 2003 • Phase II: 260 MW, 40,000/d, Q3 2004

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