Transcript Alaska Natural Gas Transportation System A North American Energy Solution November 30, 2001 Marty Heeg Vice President, Business Development.

Alaska Natural Gas
Transportation System
A North American
Energy Solution
November 30, 2001
Marty Heeg
Vice President, Business Development
Agenda
 Overview of Foothills Pipe Lines
 A short history of the certificated
Alaska Natural Gas Transportation System
 ANGTS assets and readiness
 Benefits to Alaska and Canada
 Pipeline options
 Our view of northern development and
supply/demand
Who is Foothills?
 Sponsor of Alaska Natural Gas Transportation
System
 Privately held corporation owned by
TransCanada PipeLines and Westcoast Energy
 Owner and operator of the Phase I portions of
the ANGTS in Canada
Phase I currently delivers 3.3 Bcfd of natural
gas to United States
 Active in developing northern pipeline projects
since 1970s
Acronyms
 AHPP
-- Alaska Highway Pipeline Project
 ANGTS
-- Alaska Natural Gas Transportation
System
 ANGTA
-- Alaska Natural Gas Transportation
Act
 NPA
-- Northern Pipeline Act
 ANNGTC -- Alaska Northwest Natural Gas
Transportation Company
A Short History of ANGTS
 1976
- ANGTA passed to expedite the pipeline
to take Alaska gas to southern markets
 1977
- After extensive review of three alternatives,
ANGTS is selected as the best project
 1978
- NPA established in Canada as ANGTA
counterpart
 1980
- FERC/NEB approves building of Phase I of
ANGTS
 1981
- Phase I in service
--Phase I portion of ANGTS has delivered
11 Tcf of Canadian gas to U.S. markets
ANGTS Flexible Framework
 The ANGTA/NPA framework
Provides for expediting the delivery of
Alaskan gas to the Lower 48
Is tested and accepted framework
Allows for updates
Allows Project to be modified to the required
capacity and pressure and the use of
updated technology
ANGTS Status
 ANNGTC/Foothills was selected by the United
States and Canada to construct and operate the
ANGTS
 Significant assets have been secured
FERC and NEB Certificates
U.S. Corps 404 Permits
Significant development work completed
94% of right-of-way acquired, reserved or
under application
ANGTS Land Tenure
Prudhoe
Bay
ALASKA
Federal Grant
•434 miles have been acquired.
State Application
•200 miles under active application.
Other Lands
•110 miles to be acquired.
ALASKA
Fairbanks
YUKON
Grant of easement
for the entire ROW in Yukon.
Recognized in the Umbrella
Final Agreement.
Inuvik
NUNAVUT
Beaver Creek
YUKON
Whitehorse
B.C.
NWT
Fort Nelson
ALBERTA
NORTH B.C.
Foothills holds Map Reserves
within this segment
Boundary Lake
Gordondale
SASKATCHEWAN
Caroline
ANGTS is Ready Today
Foothills and its shareholders have invested
time, money and considerable effort to keep
the Alaska Natural Gas Transportation
System in an advanced state of readiness.
 Extensive field testing and technology work
 Computerized Soils Database
 Technical and Environmental Plans filed with
FERC/NEB
 Tariffs filed with FERC and NEB
ANGTS is the Best Alternative
 Has been extensively reviewed
 Follows existing infrastructure
 Will minimize adverse environmental effects
 Easily accessible for maintenance and
operations
 Lowest capital cost option
 Quickest to market
Alaska Natural Gas Transportation System
Lowest Cost, Quickest to Market for ANS Gas
Project Description
Size / Operating Pressure
42” diameter / 2050 psi
Capacity
Initial
2.5 Bcf/d
Ultimate 4.0 Bcf/d
Capital Cost
Initial
US$7.6 Billion
Ultimate US$9.7 Billion
Alaska
Nunavut
Northwest
Territories
Yukon
Alberta
B.C.
Alaskan Benefits
 Increase in Gross State
$55 billion
 Increase in Employment
26,000 person years
 Increase in State and Local
$12 billion
Product
Government revenues
Based on $3 MMbtu gas price over 25 years
Canadian Benefits
 Increase in Gross Domestic
$19 billion
 Increase in Employment
11,000 person years
 Increase in Government
$ 5.2 billion
Product
revenues
Based on $3 MMbtu gas price over 25 years
ANGTS Advantages
 Earliest Timing
Three-year head start on a green field project
 Land Tenure
Extensive right-of-way acquired, reserved or
under application
 Flexible Framework
Treaty between the U.S. and Canada
 Best Route
Follows existing transportation corridors
 Benefits
Extensive benefits to Alaska and Canada
Progress Report and Next Steps
 MOU with withdrawn
partners from ANNGTC
 Formal proposal to the
North Slope Producers
 Producer decision
on the project
expected in the
1st Quarter of 2002
Our Perspectives on
Northern Gas Development
 Strong gas demand is here to
stay
 Two separate pipelines will be
built from Alaskan North Slope
and Mackenzie Delta
 Collaboration is critical to early
project execution
- Producers
- Pipelines
- First Nations - Local communities
- Governments - NGOs
 Optimization of South of 60
takeaway capacities required
Northern Gas Pipeline Development
South of 60 Takeaway Capacities
o
Options
 TransCanada
 Alliance
 Foothills / ANG / PGT
 Foothills / Northern Border
 Westcoast Energy
 New greenfield
Issues
 Western Canada supply
 Market pull
 Tolling structures
 Shipper netbacks
 Point of NGL extraction