Shell Canada Energy Response to NEB Information Request No. 1.1 Jurisdiction Over the Coastal Gaslink MH-053-2018 Pipeline Project

Shell Canada Energy Response to NEB Information Request No. 1.1 Jurisdiction over the Coastal GasLink MH-053-2018 Pipeline Project

IR Number: NEB 1.1

Topic: Shell Canada Energy Commercial and functional integration of the Coastal GasLink Pipeline (CGL Pipeline)

Reference: i) A97945-2, Shell Canada Energy (Shell) Additional Written Evidence, PDF Page 12 of 33

ii) A97945-2, Shell, Additional Written Evidence, PDF Page 11 of 33

iii) A97945-2, Shell, Additional Written Evidence, PDF Page 12 of 33

iv) A97945-2, PetroChina Kitimat LNG Partnership, Additional Written, Evidence, PDF Page 23 of 33

Preamble: Reference i) states that Shell has significant natural gas production and holdings in the Groundbirch area of British Columbia (BC). Shell’s Groundbirch operations currently produce approximately 500 million cubic feet per day (MMcf/d) of natural gas from the Montney formation, and have an expected field life of more than 35 years.

Reference ii) states that Shell is currently developing plans to connect its Groundbirch gas supply directly to the CGL Pipeline. Shell has requested Coastal GasLink Pipeline Ltd. (CGL) to build a meter station at the inlet of CGL Pipeline, through which Shell intends to nominate and deliver its gas supply requirements to the LNG export Terminal. The details are still being finalized.

Reference iii) states that Shell’s plan is to source all its gas nomination requirements through a combination of Groundbirch production and other third-party supply sources. One supply option, among others, is expected to be an arrangement whereby Shell procures gas from the NOVA Gas Transmission Ltd. (NGTL) System. At this point in time, no arrangement has been concluded with NGTL. However, Shell’s plans, including those involving NGTL, will allow for ongoing “procure versus produce” decisions that would optimize Shell’s cost of supply over the LNG Canada project life, and would also help to provide for operational flexibility. Possible future connections to NGTL would serve to achieve these two goals, as a supplemental option, among others, to maximize this flexibility.

Reference iv) states that PetroChina has significant natural gas production and holdings in the Groundbirch area of BC, including a 20 per cent interest in a non-operated joint venture with Shell Canada Limited. The reference also states that PetroChina has requested CGL to build a meter station at the inlet of the CGL Pipeline, to allow it the option to directly connect its gas supply to the pipeline.

1 Shell Canada Energy Response to NEB Information Request No. 1.1 Jurisdiction over the Coastal GasLink MH-053-2018 Pipeline Project Request: a) Provide a detailed description of Shell’s natural gas supply portfolio in the Western Canadian Sedimentary Basin (WCSB). In your answer, include:

a.1) geographic location; a.2) current and forecast production profile; a.3) summary of all current transportation arrangements, including receipt and delivery points, volumes to be transported, and lengths of transportation contracts; and a.4) map(s) illustrating Shell’s production areas.

b) Provide a detailed description of what will happen to Shell’s natural gas production in the event the LNG Canada export facility does not require natural gas supply. In your answer, discuss whether in the event of a prolonged non-utilization of the LNG export facility (eg. maintenance, lack of demand), whether Shell would shut-in its natural gas production.

c) Provide a detailed description of Shell’s plans for its natural gas supply in the event that the economics are more favourable to deliver gas into another market in Canada or the United States (US) rather than to the LNG Canada’s export terminal in Kitimat.

d) Provide a detailed description of Shell’s plans to connect its Groundbirch gas supply directly to the CGL Pipeline, as referenced in ii). In your answer, include:

d.1) pipeline capacity (in cubic feet per day); d.2 pipeline length in kilometers; d.3) planned physical connection point with the CGL Pipeline; d.4) summary of regulatory authority(s) necessary for construction and operation of planned pipeline; d.5) clarification on whether supply from producing assets jointly owned with PetroChina (as referenced in iv) will use a shared physical connection to the CGL Pipeline; and d.6) to the extent details are not finalized, provide best information available, including anticipated timelines for when final decisions on necessary connections between Shell’s production and CGL Pipeline are expected to be made.

Response: a.1) Shell produces or otherwise sources gas from a number of assets in the WCSB. The primary source of gas supply to meet Shell’s gas nomination requirements for the LNG Canada facility will come from Shell’s Groundbirch asset in northeast British Columbia.

In addition to the Groundbirch assets, Shell currently produces gas from assets in the Fox Creek, Gold Creek and Rocky Mountain House

2 Shell Canada Energy Response to NEB Information Request No. 1.1 Jurisdiction over the Coastal GasLink MH-053-2018 Pipeline Project areas of northwest and west central Alberta (collectively referred to as the Alberta Light Tight Oil business).

Shell also currently produces natural gas liquids, gas and condensate from assets in the Caroline, Jumping Pound and Waterton areas of south west Alberta (collectively referred to as the Foothills business).

a.2) Shell’s Groundbirch operations currently produce approximately 500 million scf/day of natural gas from the Montney formation and have an expected field life of approximately 35 years. Future production forecasts for the Groundbirch asset, as well as Shell’s other WCSB gas producing assets referenced herein, depends on a number of operational and economic variables, including individual well performance and declines; production, processing and transportation infrastructure reliability, availability and investment, commodity prices and other related considerations, along with corporate capital allocation considerations and potential acquisition or divestment choices. However, as Shell’s Groundbirch asset will be the primary supply source for Shell’s gas nomination requirements, Shell will continue to examine investments in incremental production, gathering and processing capacity as appropriate.

Aside from the Groundbirch asset, in Fox Creek, Shell holds approximately 250,000 net acres in the Duvernay formation, and currently produces approximately 30,000 boe/day of oil, condensate and gas, from approximately 200 wells. In Gold Creek, Shell currently produces approximately 7,000 boe/day of oil, gas and condensate from 40 wells in the Montney formation. In Rocky Mountain House, Shell currently produces approximately 3,000 boe/day of oil, gas and condensate from 20 wells in the Duvernay formation.

The Caroline facility processes approximately 90 mmscf/d of Shell and 3rd party gas from approximately 40 wells. The Jumping Pound complex and field processes approximately 74 mmscf/d of Shell and 3rd party gas, from 90 wells. The Waterton Complex and field produces approximately 99 mmscf/d of Shell and 3rd party gas, from approximately 75 wells. Of note, Shell has publicly announced that it is exploring divestment options for the Foothills business, but as of date of filing, the Foothills business remains an active part of Shell’s WCSB portfolio.

As stated in Royal Dutch Shell’s most recent annual report, Shell’s total proved developed and undeveloped gas reserves in Canada as at December 31, 2017 are 1,272 thousand million scf.

a.3) Regarding Shell’s transportation arrangements for its WCSB gas, Shell currently holds firm transportation contracts on a number of pipelines which includes NGTL, TransCanada Mainline, Enbridge Westcoast Energy Inc.’s BC pipeline system and the Alliance pipeline system. More specifically Shell can access both NGTL and the

3 Shell Canada Energy Response to NEB Information Request No. 1.1 Jurisdiction over the Coastal GasLink MH-053-2018 Pipeline Project Enbridge Westcoast systems in northeast British Columbia to transport the gas produced from its Groundbirch.

For its Alberta production, Shell can access both the NGTL and Alliance systems for production from its Alberta Light Tight Oil assets and evacuates the gas produced by its Foothills assets to the NGTL system to other areas in North America. Shell also holds transportation on the TransCanada Mainline to transport gas into eastern Canada and other areas. The exact quantity of production on a given pipeline will fluctuate daily and the areas into which Shell sells gas are also subject to change depending on economic conditions and available transportation. Shell also looks to optimize the costs of its overall transportation portfolio and as such actively manages its contractual commitments on each pipeline to match its production.

Further, as indicated in its evidence, Shell currently has a confidential Transportation Services Agreement with CGL, which contemplates Shell transporting its full LNG Canada gas nomination requirements on CGL, as well as a connection with CGL from Shell’s Groundbirch asset. In conjunction with a possible CGL interconnection as referenced at paragraph 9 of Shell’s evidence [A97945-2 at PDF page 12 of 33], it is anticipated that this provides sufficient operational and supply flexibility to allow Shell to meet its LNG Canada gas nomination requirements.

a.4) The map below shows the totality of Shell’s WCSB gas production areas.

4 Shell Canada Energy Response to NEB Information Request No. 1.1 Jurisdiction over the Coastal GasLink MH-053-2018 Pipeline Project

b) In the event that Shell’s participating interest in LNG Canada does not require Shell’s gas, Shell would have the option of diverting all or a portion of its equity gas production elsewhere. Such a decision, including volumes, would depend on economic considerations involving domestic gas prices, as well as ability to access sufficient transportation service from NGTL or Enbridge. To the extent the foregoing would not be considered by Shell at that time to be

5 Shell Canada Energy Response to NEB Information Request No. 1.1 Jurisdiction over the Coastal GasLink MH-053-2018 Pipeline Project economically feasible, Shell could consider shutting in production as necessary in order to mitigate against additional value erosion.

In the foregoing scenario, Shell would not use CGL to access NGTL, Enbridge Westcoast or other delivery pipelines for its gas, as CGL is a dedicated line designed solely to transport gas to LNG Canada.

It should also be noted that in such a scenario as that contemplated in the foregoing request, due consideration would have to be given to the substantial investments having been made by Shell and the Joint Venture participants in the LNG Canada project, ongoing transportation commitments on CGL, and obligations arising from a portfolio of LNG supply contracts and associated commitments to LNG marine shipping capacity – all of which indicate a high likelihood that CGL would be kept full so as to maintain LNG exports, in order to cover operating costs.

c) In the event that economics were more favourable to deliver gas into another North American market rather than to the LNG Canada facility, subject to fulfilment of any LNG volume commitments, Shell could consider doing so. However, for similar reasons to those referenced in Response 1.b above, Shell is unlikely to do this. However, in specific scenarios, Shell may consider delivery into other areas in North American, via existing Shell direct connections to both NGTL and Enbridge.

Please also see Shell’s response to Request 1.b regarding considerations related to access to transportation infrastructure and economic considerations. Again, in the foregoing scenario Shell would not utilize CGL to access NGTL, Enbridge Westcoast or other delivery pipelines for its gas.

d.1-6) Shell has not finalized the design and configuration of the requested connection of its Groundbirch production to CGL, with pipeline capacity yet to be determined. The length will be approximately 1.3 kilometers. The connection point is currently anticipated to be at a Shell riser site located at 2-3-79-19 W6M and is anticipated to tie in at the Wilde Lake Compressor Station 6-33-78-19 W6M. Currently, the primary anticipated regulatory permit is an approval from the BC Oil and Gas Commission pursuant to the Oil and Gas Activities Act, which includes the necessary surface land and environmental approvals. There are currently no arrangements in place for a shared physical connection for the production derived from the assets jointly owned between Shell and PetroChina. Shell anticipates submitting the necessary applications for its CGL connection during the first half of 2019.

6 North Montney LNG Limited Partnership Response to NEB Information Request No. 1.2 and Petronas Energy Canada Ltd. MH-053-2018 Jurisdiction over the Coastal GasLink Pipeline Project

IR Number NEB 1.2

Topic: North Montney LNG Limited Partnership and Petronas Energy Canada Ltd. – Commercial and functional integration of the CGL Pipeline

Reference: i) A97945-2, North Montney LNG Limited Partnership and Petronas Energy Canada Ltd. Additional Written Evidence, PDF Page 21 of 33

ii) A97945-2, North Montney LNG Limited Partnership and Petronas Energy Canada Ltd. Additional Written Evidence, PDF Page 20-21 of 33

iii) A97945-2, North Montney LNG Limited Partnership and Petronas Energy Canada Ltd. Additional Written Evidence, PDF Page 21 of 33

Preamble: Reference i) states that from August to September 2018, PETRONAS Canada (formerly Progress Energy Canada Ltd. (PECL)) participated in an open season held by Westcoast Energy Inc. (Westcoast) in relation to an expansion of service on its Transportation Service – Northern (Zone 3) facilities. PETRONAS Canada was successful in obtaining approximately 500 million cubic feet per day (MMcf/d) of capacity on Zone 3 for a 40-year term. This capacity will enable PETRONAS Canada to supply its entire LNG Canada gas supply obligation. The use of Westcoast as the primary source of gas supply for the LNG Canada project was a commercial decision.

Reference ii) states that an NGTL interconnection with the CGL Pipeline may be pursued at some point in future, to provide security of gas supply to mitigate the risk of damages for non-delivery of LNG cargoes and match the high reliability factor associated with the LNG facilities.

Reference iii) states that PETRONAS Canada holds an estimated 62 trillion cubic feet (Tcf) of reserves and contingent resource and is the anchor shipper for the NEB- regulated North Montney Mainline pipeline (NMML). PETRONAS Canada (formerly PECL) entered into two Project Expenditure Agreements with NGTL for 700 MMcf/d of Firm Transportation - Receipt service at four receipt meter stations and for 700 MMcf/d Firm Transportation – Delivery. More recently, PECL acquired an additional combined Fixed Transportation – Delivery capacity of 500 MMcf/d at two of the NGTL’s Empress delivery points.

Request: (a) Provide a detailed description of PETRONAS Canada’s natural gas supply portfolio in the WCSB. In your answer, include:

a.1) geographic location;

a.2) current and forecast production profile;

a.3) summary of all current transportation arrangements, including receipt and delivery points, and lengths of transportation contracts; and

a.4) map(s) illustrating PECL’s production areas.

7 North Montney LNG Limited Partnership Response to NEB Information Request No. 1.2 and Petronas Energy Canada Ltd. MH-053-2018 Jurisdiction over the Coastal GasLink Pipeline Project (b) Provide a detailed description of what will happen to PETRONAS’ natural gas production in the event the LNG Canada export facility does not require natural gas supply. In your answer, discuss whether in the event of a prolonged non- utilization of the LNG Canada export facility (e.g. maintenance, lack of demand), PETRONAS would shut-in its natural gas production.

(c) Provide a detailed description of PETRONAS’ plans for its natural gas supply in the event that the economics are more favourable to deliver gas into another market in Canada or the US rather than to LNG Canada’s export terminal in Kitimat.

(d) What are the receipt and delivery points on the Westcoast system in the transportation arrangement referenced in i)?

(e) What is the start date of the transportation arrangement referenced in i)?

(f) Provide a detailed description of how transportation capacity on Westcoast pipeline referenced in i) will supply PETRONAS’ LNG Canada gas supply obligation.

(g) Provide clarification on whether an interconnection between NGTL and the CGL Pipeline would need to support bidirectional flow in order to support the needs outlined in reference ii). Additionally, provide the location of any potential proposed interconnection.

(h) Provide clarification on how the NMML pipeline may be used to supply the CGL Pipeline.

(i) Provide the status of the construction of the NMML and the in-service date(s) for all segment(s).

(j) Provide a discussion on whether PETRONAS can deliver natural gas to Aitken Creek Interconnect Meter Station via the NMML, and then deliver to CGL via the Westcoast pipeline using the transportation arrangement referenced in i).

Response: a.1) The geographic location of PETRONAS’ reserves in the WCSB that could supply LNG Canada can be found in Attachments to SFN-Progress 1.3(a) and 1.3(b) filed in proceeding GH-001-2014 and marked as Exhibit C29-6-5. They are included within the document assigned reference number A4A5T9 in the Board’s electronic filing system.

a.2) Current production remains in the same range provided in 2017 at page 1, A1 in the Written Evidence of Progress Energy Canada Ltd. in proceeding MH- 003-2017, and assigned reference numbers A88377-2 and A5X8W8 in the Board’s electronic filing system. Forecast production was provided in cross- examination of the Progress witness panel at Transcript Volume 3, paragraphs 4003 to 4010, assigned reference numbers A89536-1 and A5Z6A9 in the Board’s electronic filing system and has not changed.

a.3) A summary of transportation arrangements was filed in the MH-031-2017 proceeding as Information Response PECL-BFRN 1.03 (a) and (b) assigned 8 North Montney LNG Limited Partnership Response to NEB Information Request No. 1.2 and Petronas Energy Canada Ltd. MH-053-2018 Jurisdiction over the Coastal GasLink Pipeline Project reference numbers A89044-3 and A5Y9Y6 and at Transcript Volume 3, paragraphs 4071 and 4072, assigned reference numbers A89536-1 and A5Z6A9 in the Board’s electronic filing system and has not changed. This reflects a summary of in-service arrangements.

a.4) These maps are the document referenced in response a.1) above.

(b) What would happen depends on market circumstances at the time either CGL or LNGC is unable to accept natural gas deliveries. LNG Canada will be operating for decades and it is not possible to anticipate the strength of natural gas markets or pipeline capacity available to serve these markets over such a long period of time. If such an event were to occur in the near term following startup of LNG Canada, it would be possible to use PETRONAS’ Westcoast Zone 3 capacity to serve any available markets through Station 2. PETRONAS’ firm NGTL capacity would already be utilized to transport gas supply to North American markets and would not likely be available to market gas supply that had been destined for LNG Canada. Excess gas supply that could not be economically marketed through Station 2 or through access interruptible capacity on NGTL would likely have to be shut-in.

(c) PETRONAS does not have plans for such an event. PETRONAS is committed to supplying LNG Canada with twenty-five percent (25%) of its feedstock.

(d) The receipt points are Caribou South, Lily, Jedney #2, Town North, and Beg East. The delivery point is Sunset Creek Compressor Station.

(e) The first start date is September 1, 2023.

(f) Through a connector pipeline that will be approximately 2.4 km long. PETRONAS may construct and operate this line itself or have it constructed or operated by a third-party service provider.

(g) Bi-directional flow between NGTL and CGL is not how the CGL Pipeline is currently designed or permitted. This is not required to support gas supply as referenced.

(h) NGTL would have to develop a service that would facilitate this use and the Board would have to approve it. As stated in PETRONAS’ evidence in this proceeding, there is considerable uncertainty regarding such service. PETRONAS does not know NGTL’s plans for such a service, nor does it know the form of service the Board might consider approving.

(i) PETRONAS notes that the Board has requested this information from NGTL in Information Request NEB-NGTL 1.4 (a) and (b). PETRONAS defers to NGTL’s responses to these questions.

(j) This might be possible in the future, but PETRONAS does not have any current plans to use the NGTL and Westcoast service it has contracted in this way.

9 PetroChina Kitimat LNG Partnership Response to NEB Information Request No. 1.3 Jurisdiction over the Coastal GasLink MH-053-2018 Pipeline Project

IR Number: NEB 1.3

Topic: PetroChina Kitimat LNG Partnership– Commercial and functional integration of the CGL Pipeline

Reference: A97945-2, PetroChina Kitimat LNG Partnership Additional Written Evidence, PDF Page 23 of 33

Preamble: The reference states that PetroChina has significant natural gas production and holdings in the Groundbirch area of BC, including a 20 per cent interest in a non- operated joint venture with Shell Canada Limited, and, as such, a portfolio of commercial and equity gas options for PetroChina’s gas nomination requirements to the CGL Pipeline is planned. The reference also states that PetroChina has requested CGL to build a meter station at the inlet of the CGL Pipeline, to allow it the option to directly connect its gas supply to the pipeline.

Request: a) Provide a detailed description of PetroChina’s natural gas supply portfolio in the WCSB. In your answer, include: a.1) geographic location; a.2) current and forecast production profile; a.3) summary of all current transportation arrangements, including receipt and delivery points, and lengths of transportation contracts; and a.4) map(s) illustrating PetroChina’s production areas.

b) Provide a detailed description of what happens to PetroChina’s natural gas production in the event the LNG Canada export facility does not require natural gas supply. In your answer, discuss whether in the event of a prolonged non-utilization of the LNG export facility (e.g. maintenance, lack of demand), whether PetroChina would shut- in its natural gas production.

c) Provide a detailed description of PetroChina’s plans for its natural gas supply in the event that the economics are more favourable to deliver gas into another market in Canada or the US rather than to LNG Canada’s export terminal in Kitimat.

d) Provide a detailed description of PetroChina’s plans to connect its Groundbirch gas supply directly to the CGL Pipeline, as set out in the reference above. In your answer, include: d.1) pipeline capacity (in cubic feet per day); d.2) pipeline length in kilometers; d.3) planned physical connection point with the CGL Pipeline; d.4) summary of regulatory authority(s) necessary for construction and operation of planned pipeline; d.5) clarify whether supply from the non-operated producing assets jointly owned with Shell will use a shared physical connection to the CGL Pipeline;

10 PetroChina Kitimat LNG Partnership Response to NEB Information Request No. 1.3 Jurisdiction over the Coastal GasLink MH-053-2018 Pipeline Project

and d.6) to the extent details are not finalized, provide best information available, and anticipated timelines for when final decisions on necessary connections between PetroChina’s production and CGL Pipeline are expected to be made.

Response: a.1) Refer to Exhibit 1 - PetroChina Canada’s natural gas supply portfolio in the WCSB is geographically located in the provinces of British Columbia and Alberta and is produced from two assets (Groundbirch and Duvernay) as shown.

a.2) Current production is sourced as annual average daily gas rate (data source: Geoscout).

PetroChina Canada’s Groundbirch asset is a joint venture with Shell Canada who is the listed operator. PetroChina has a 20% working interest in the shared lands associated with this asset that has produced an annual average daily gas rate of ~1600 e3m3/d net production for the period of 2018.

PetroChina Canada’s Duvernay asset is a joint venture with Encana Corporation who is the listed operator. PetroChina has a 49.9% working interest in these assets that have produced an annual average daily gas rate of ~1800 e3m3/d net production for the period of 2018

Forecasts are difficult to predict and subject to several variables. As a result, PetroChina is not able to provide reliable forecasts at this time. However, PetroChina intends to rely on both its interest in the Groundbirch and the Duvernay assets as key components of its LNG Canada gas nomination requirements, and will consider investments as appropriate to ensure these assets continue to play this role.

a.3) Regarding PetroChina’s transportation arrangements for its WCSB gas, PetroChina currently holds firm transportation contracts on a number of pipelines which includes NGTL, TransCanada Mainline, Enbridge Westcoast Energy Inc. and the Alliance pipeline system.

PetroChina can access both NGTL and the Enbridge Westcoast systems in northeast BC to transport the gas produced from its Groundbirch asset. The Groundbirch area has NGTL receipt capacity (FTR) at the Groundbirch (1416.4 e3m3) and Saturn (1291.8 e3m3) receipt locations. The Groundbirch area also has Enbridge (WEI) Transportation North receipt capacity (T-North) at the Berkley Sunset (74.0 e3m3) and Groundbirch (78.3 e3m3) receipt locations.

PetroChina can access both the NGTL and Alliance systems for production from its Duvernay assets having NGTL receipt capacity (FTR) at the Ferrier (30.0 e3m3) and Willesden Green (16.5 e3m3) receipt locations. The Duvernay area also has Alliance transportation capacity (FRS,FFPS and FT- 1) capacity at the Little Crooked Lake (879.2 e3m3), Tony Creek (2304.4 e3m3) and Tony Tower (559.4 e3m3) receipt locations.

11 PetroChina Kitimat LNG Partnership Response to NEB Information Request No. 1.3 Jurisdiction over the Coastal GasLink MH-053-2018 Pipeline Project

Further, as indicated in its evidence, PetroChina currently has a confidential Transportation Services Agreement with CGL, which contemplates PetroChina transporting its full LNG Canada gas nomination requirements on CGL, as well as contemplating a connection with CGL from PetroChina’s Groundbirch asset. In conjunction with other possible interconnections as referenced in PetroChina’s evidence, it is anticipated that a direct connection to sales gas provides operational and supply flexibility to allow PetroChina to meet its LNG Canada gas nomination requirements.

a.4) Refer to Exhibit 1 map.

b) In the event that PetroChina’s participating interest in LNG Canada does not require PetroChina’s gas, PetroChina would have the option of diverting all or a portion of its equity gas production elsewhere or else shutting in production. This would depend on various economic and commercial considerations, including PetroChina’s ability to access the necessary gas transportation infrastructure.

c) While such a scenario is highly unlikely given the sunk capital costs, ongoing operational costs and likely obligations to LNG customers and transporters, in the event that economics were more favorable to deliver gas into another North American market rather than to the LNG Canada facility, subject to fulfillment of any volume commitments to LNG Canada, PetroChina could consider doing so. As in Response 1b) above, PetroChina would attempt to ship it gas to other areas in North America, as it currently does today, in order to receive the highest netback price possible, in order to mitigate against the aforementioned cost exposure.

d.1) To be determined. d.2) To be determined. d.3) To be determined. d.4) To be determined. d.5) To be determined. d.6) PetroChina is currently evaluating available options for connections to CGL, and expects that these options will be concluded and that the corresponding plans should be finalized in 2020.

12 PetroChina Kitimat LNG Partnership Response to NEB Information Request No. 1.3 Jurisdiction over the Coastal GasLink MH-053-2018 Pipeline Project

SUPPORTING EXHIBITS:

13 PetroChina Kitimat LNG Partnership Response to NEB Information Request No. 1.3 Jurisdiction over the Coastal GasLink MH-053-2018 Pipeline Project

14 Diamond LNG Canada Partnership Response to NEB Information Request No. 1.4 Jurisdiction over the Coastal GasLink MH-053-2018 Pipeline Project

IR Number: NEB 1.4

Topic: Diamond LNG Canada Partnership – Commercial and functional integration of the CGL Pipeline

Reference: i) A97945-2, Diamond LNG Canada Partnership (“DLC Partnership”) Additional Written Evidence, PDF Page 26 of 33

ii) A97945-2, DLC Partnership Additional Written Evidence, PDF Page 27 of 33

Preamble: Reference i) states that while considering other options, DLC Partnership’s current intention is to source its share of natural gas feedstock primarily from the substantial gas reserves held by the Cutbank Ridge Partnership (CRP) in the Montney lands of northeastern British Columbia. DLC Partnership’s affiliate Cutbank Dawson Gas Resources Ltd. (CDGR) owns a 40 per cent interest in CRP.

Reference ii) states that on 4 July 2017, the BC Oil and Gas Commission issued a permit to DLC Partnership’s affiliate Diamond LNG Canada Ltd. (DLC Ltd.) under the BC Oil and Gas Activities Act for the construction and operation of the Dawson – Groundbirch Pipeline (DG Pipeline). The DG Pipeline is planned to be an approximately 25 kilometer-long pipeline connecting the CRP Montney gas reserves to the inlet of the CGL Pipeline, where DLC Partnership has contracted with CGL for the construction of a meter station dedicated to DLC Partnership.

Request: a) Provide a detailed description of DLC Partnership affiliate CDGR’s natural gas supply portfolio in the WCSB. In your answer, include: a.1) geographic location; a.2) current and forecast production profile; a.3) summary of all current transportation arrangements, including receipt and delivery points, and lengths of transportation contracts; a.4) map(s) illustrating DLC Partnership affiliate CDGR’s production areas; and a.5) clarification on whether all of CRP production may be used to supply LNG Canada facilities, or only up to the 40 per cent interest owned by CDGR. If more production than CDGR’s 40 per cent interest may supply the CGL Pipeline, answer a.1 through a.4 for all CRP as well.

b) Provide a detailed description of what happens to DLC Partnership’s and/or CDGR’s natural gas production in the event

15 Diamond LNG Canada Partnership Response to NEB Information Request No. 1.4 Jurisdiction over the Coastal GasLink MH-053-2018 Pipeline Project

the LNG Canada export facility does not require natural gas supply. In your answer, discuss whether in the event of a prolonged non-utilization of the LNG export facility (eg. maintenance, lack of demand), whether DLC Partnership and/or CDGR would shut-in its natural gas production.

c) Provide a detailed description of DLC Partnership’s and/or CDGR’s plans for its natural gas supply in the event that the economics are more favourable to deliver gas into another market in Canada or the US rather than to LNG Canada’s export terminal in Kitimat.

d) What is the capacity (in cubic feet per day) of the DG Pipeline referenced in ii)?

e) What is the expected in-service date of the DG Pipeline referenced in ii)?

f) Describe the physical connection (including geographic location) between the DG Pipeline and the CGL Pipeline referenced in ii).

Response: a.1) Please see the map below.

a.2) CDGR holds a 40% interest in the CRP. It has no other gas holdings or interests in the WCSB. CRP’s current production is approximately 1.3bcf/d. CRP does not have a production forecast for when LNG Canada is in commercial operations; however, DLC Partnership anticipates that CDGR’s applicable percentage

16 Diamond LNG Canada Partnership Response to NEB Information Request No. 1.4 Jurisdiction over the Coastal GasLink MH-053-2018 Pipeline Project

share of the CRP production will be sufficient to meet DLC Partnership’s gas supply obligation to the LNG Terminal.

a.3) As stated in the referenced DLC Partnership Additional Written Evidence (page 26 of 33), DLC Partnership has entered into a transportation service agreement with CGL Partnership to transport DLC Partnership’s supply gas for the LNG Terminal on Coastal GasLink Pipeline from its inlet to the LNG Terminal. The term of the transportation service agreement is for 25 years.

CDGR, through its affiliates, also has transportation arrangements currently in place to ship its applicable percentage share of the CRP production; however, once the LNG Terminal is in commercial operation, it is intended that certain of these agreements may not be renewed to correspond with the gas supply to the planned DG Pipeline.

In addition to the foregoing, as set out in the DLC Partnership Additional Written Evidence (page 27 of 33), DLC Ltd. is planning to construct and operate the DG Pipeline, an approximately 25 kilometer long pipeline, which is planned to connect the CRP Montney gas reserves to the inlet of Coastal GasLink Pipeline. Further transportation options are also being explored. These further options include, but are not limited to, NGTL and other market-based supply infrastructure, in order to provide commercial and operational flexibility for delivery of capacity gas.

a.4) Please see the below enlarged version of the map provided in response to a.1). For context and reference for the below, please note that all of these assets are located within B.C.

17 Diamond LNG Canada Partnership Response to NEB Information Request No. 1.4 Jurisdiction over the Coastal GasLink MH-053-2018 Pipeline Project

a.5) Of the total CRP production, it is anticipated that only CDGR’s share of production will be used to supply the LNG Terminal.

b) The measures taken by DLC Partnership and/or CDGR in a scenario where the LNG Terminal does not require natural gas supply or there is a prolonged non-utilization of the LNG Terminal, would be entirely dependent on the applicable facts in any such scenario and how those facts impact relevant contractual terms and the commercial and operational realities at the time. If such a prolonged or long-term scenario were to exist, DLC Partnership and/or CDGR would explore options to divert gas to available markets or to reduce production.

c) Given the long-term and firm agreements in place for the supply and delivery of DLC Partnership’s share of LNG from the LNG Terminal, neither DLC Partnership, nor CDGR, have plans in the scenario described to divert gas into another market, rather than to the LNG Terminal.

d) Under current plans, the capacity of the DG Pipeline is expected to be 1137 mmscf/day.

18 Diamond LNG Canada Partnership Response to NEB Information Request No. 1.4 Jurisdiction over the Coastal GasLink MH-053-2018 Pipeline Project

e) The DG Pipeline is expected to be in service prior to the commercial operations of the LNG Terminal.

f) Please see the map below. As illustrated in the map, the DG Pipeline will physically connect to the inlet of Coastal GasLink Pipeline where there is a planned DLC Partnership dedicated meter station and whereby gas supplied from the DG Pipeline will be measured.

19 Kogas Canada LNG Ltd. Response to NEB Information Request No. 1.5 Jurisdiction over the Coastal GasLink MH-053-2018 Pipeline Project

IR Number: NEB 1.5

Topic: Kogas Canada LNG Ltd. – Commercial and functional integration of the CGL Pipeline

Reference: i) A97945-2, Kogas Canada LNG Ltd. (KCLNG) Additional Written Evidence, PDF Page 31 of 33

ii) A97945-2, KCLNG Additional Written Evidence, PDF Page 33 of 33

Preamble: Reference i) states that KCLNG’s affiliate, Kogas Canada Ltd. (KCL), has working interest rights in certain lands and energy infrastructure in the Horn River area of BC. KCL has acquired a 50 per cent working interest in a portion of Encana’s Horn River and Montney properties, and within these properties, KCL has a dedicated compression station for its production. KCL currently produces about 20 million cubic feet per day (MMcf/d) from its Horn River assets. KCLNG’s affiliate, KCL, has a contract for transportation on Enbridge’s T-North Section.

Reference ii) states that NGTL reflects only one of the options for KCLNG to source gas for the LNG Canada export facilities. Other options include, but are not limited to, purchasing from KCLNG’s affiliates, and/or KCLNG’s development of its own direct connect pipeline.

Request: a) Provide a detailed description of KCLNG’s affiliate KCL’s natural gas supply portfolio in the WCSB. In your answer, include:

a.1) geographic location;

a.2) current and forecast production profile;

a.3) summary of all current transportation arrangements, including receipt and delivery points, volumes to be transported, and lengths of transportation contracts; and

a.4) map(s) illustrating KCL’s production areas.

b) Provide a detailed description of how NGTL may provide a supply source for KCLNG, either directly or through an affiliate, in supplying LNG Canada facilities, as referenced in ii). In your answer, include location(s) of physical connection points with NGTL.

20 Kogas Canada LNG Ltd. Response to NEB Information Request No. 1.5 Jurisdiction over the Coastal GasLink MH-053-2018 Pipeline Project

c) Provide a detailed description of how KCLNG (or an affiliate) may build its own direct connect pipeline as referenced in ii). In your answer, include:

c.1) pipeline capacity (in cubic feet per day);

c.2) pipeline length in kilometers;

c.3) location of physical connection point with the CGL Pipeline and/or NGTL; and

c.4) location of physical connection point with the CGL Pipeline and/or NGTL; and

d) Provide a detailed description of how supply would be received from a KCLNG affiliate, as referenced in ii). In your answer, include:

d.1) pipeline capacity (in cubic feet per day);

d.2) pipeline length in kilometers;

d.3) location of physical connection point with the CGL Pipeline and/or NGTL; and

d.4) summary of regulatory authority(s) necessary for construction and operation of any planned pipeline.

e) Provide a detailed description of what happens to KCLNG’s (or an affiliate’s) natural gas production in the event the LNG Canada export facility does not require natural gas supply. In your answer, discuss whether in the event of a prolonged non-utilization of the LNG export facility (e.g. maintenance, lack of demand), whether KCLNG (or an affiliate) would shut-in its natural gas production.

f) Provide a detailed description of KCLNG’s (or an affiliate’s) plans for its natural gas supply in the event that the economics are more favourable to deliver gas into another market in Canada or the US rather than to LNG Canada’s export terminal in Kitimat.

Response: a.1) National Topographic System 94-0-7 (BC) is the current geographic location.

a.2) The 2018 monthly average was 590 MMcf/month. Forecast production profile is not available at this time, and is subject to, among other things, capital availability and other economic parameters.

21 Kogas Canada LNG Ltd. Response to NEB Information Request No. 1.5 Jurisdiction over the Coastal GasLink MH-053-2018 Pipeline Project

a.3) A summary of all current transportation arrangements is set out below, which represents transportation from KCL’s Horn River assets to Station 2:

Service Service Contract Contract Amend Class Type Date Number Number

Firm TNLH 20-May- 3748 6 2016

Line From To Start End Number Location Location Date Date

21 Ft Station 01- 31-Oct- Nelson #2 Nov- 2020 Plant 2019 Outlet

Renewal Service Residue Residue Toll State Term Volume Energy (103M3) (GJ)

Eligible T5+ 566.6 21,474.0

a.4) Map illustrating KCL’s production areas:

22 Kogas Canada LNG Ltd. Response to NEB Information Request No. 1.5 Jurisdiction over the Coastal GasLink MH-053-2018 Pipeline Project

b) KCLNG is not physically connected to NGTL. KCLNG does not currently hold any transportation contracts on NGTL. At this time, KCLNG cannot provide a detailed description of how NGTL may provide a supply source for KCLNG. KCLNG is still considering a range of transportation options which ultimately may or may not include NGTL. c) At this time, KCLNG cannot provide a detailed description of how KCLNG or an affiliate may build its own direct connect pipeline. KCLNG is still considering a range of transportation options. d) At this time, KCLNG cannot provide a detailed description of how supply may be received from a KCLNG affiliate. KCLNG is still considering a range of transportation options which ultimately may or may not include receiving supply from a KCLNG affiliate. e) KCLNG’s (or an affiliate’s) shut-in of natural gas production is the subject of a farm-out agreement with Encana Corporation. Under the terms of that agreement, KCLNG is not able to provide any further description.

23 Kogas Canada LNG Ltd. Response to NEB Information Request No. 1.5 Jurisdiction over the Coastal GasLink MH-053-2018 Pipeline Project

f) KCLNG (or an affiliate) does not currently have any plans for its natural gas supply in the event that the economics are more favourable to deliver gas to another market in Canada or the US, instead of LNG Canada’s Terminal.

24 LNG Canada Development Inc. Response to NEB Information Request No. 1.6 Jurisdiction over the Coastal GasLink MH-053-2018 Pipeline Project

IR Number NEB 1.6

Topic: LNG Canada Development Inc. (LNG Canada) – Mr. Sawyer’s Evidence

Reference: A97948-2, Sawyer Additional Written Evidence, PDF Page 12 of 26

Preamble: In the reference, Mr. Sawyer states that “Every TCPL Annual Report from 2013 to 2017 inclusive describes the CGL Pipeline as “To deliver natural gas from the Montney gas producing region at an expected interconnect on NGTL near Dawson Creek, BC to LNG Canada’s proposed LNG facility near Kitimat, BC.”

Request: a) In LNG Canada’s view, is the description in the reference an accurate description of the CGL Pipeline? Provide details as to why or why not this is the case.

b) What party would make the decision to connect NGTL to the CGL Pipeline?

Response: a) In LNG Canada’s view, the description above is a reasonably accurate description of the CGL Pipeline. LNG Canada would clarify, however, that in its view, this description is overly simplified. The CGL Pipeline is intended to deliver natural gas from gas producing regions, including the Montney production areas, through connections including, but not limited to, an expected interconnect to NGTL. To LNG Canada’s knowledge, multiple connections are currently being contemplated in order to accommodate the specific requirements of the LNG Canada Joint Venture Participants (“JVPs”), and to preserve commercial and operational flexibility and optionality for the JVPs.

In addition to the above, LNG Canada would seek clarity whether the Groundbirch area, which LNG Canada understands to be the general area for the proposed terminus of CGL and the inlet connections, is properly described as being within the Dawson Creek area. LNG Canada has not raised this question with CGL and does not consider it to be material.

b) Decisions regarding connections to the CGL Pipeline, including a decision to connect to NGTL, will be made by the individual JVPs. Connection and source decisions are dependent on several factors specific to each JVP, including commercial arrangements and available source options.