Fredericton, N.B. September 28, 2006 Natural Gas Update Northeast Power Coordinating Council General Meeting Stephen Leahy Northeast Gas Association NGA Members Non-profit trade association Local gas utilities (LDCs) serving New England, New York, and New Jersey ME Several interstate pipeline companies VT LNG importer (Distrigas) and NH LNG trucking companies NY MA Over 250 “associate RI member” companies, from CT industry suppliers and contractors to electric grid operators NJ www.northeastgas.org North American Gas Pipeline System Map: National Petroleum Council Projected Demand Growth by Sector, Northeast U.S. Power generation remains the leading projected growth sector. New England Middle Atlantic 0.5 1 0.45 0.9 0.4 0.8 0.35 0.7 0.3 Residential 0.6 Residential Commercial 0.25 Commercial Industrial 0.5 Industrial Quadrillion Btu 0.2 Electric Gen. Quadrillion Btu 0.4 Electric Gen. 0.15 0.3 0.1 0.2 0.05 0.1 0 2005 2010 2015 2020 2025 0 2005 2010 2015 2020 2025 Source: U.S. Energy Information Administration, “2006 Annual Energy Outlook,” 1/06 Canadian Gas Exports to Northeast U.S. Canadian Exports to Northeast U.S., 1990 - 2005 1.2 1.0 0.8 Tcf 0.6 0.4 0.2 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Source: National Energy Board, Canada All new pipeline systems added in New York and New England since 1990 are linked to Canada (e.g., Iroquois, Empire, PNGTS, M&NE) Storage Levels / Commodity Price Projection Today: 3.177 Tcf 9/20/06: $4.87 /MMBtu Last Year: 2.821 Tcf 9/20/05: $12.76 /MMBtu Source: U.S. Energy Information Administration Projected U.S. Supply Additions, 2005 - 2010 Source: Strategic Energy & Economic Research, Inc. Planned Northeast Pipeline Projects Prepared by NGA, 8-06, based on publicly available information. Project PNGTS, “Recent Open locations approximate. Season” Tennessee, “Northeast Iroquois, ConneXion M&NE, National Fuel “MarketAccess NE” “Phase IV Gas, “Empire Expansion” Connector Expansion” Project” Columbia, DTE Tennessee, “Atlantic Energy, VERMONT Supply Expansion” KeySpan, “Millennium” Tennessee, “Essex – Middlesex Project” Duke/Algonquin, “Cape Cod Lateral” Iroquois, Duke/KeySpan, “Brookhaven “Islander East” Lateral” Tennessee, “Northeast ConneXion Williams, “Leidy to Williams, “Sentinel Algonquin, “Ramapo NY/NJ” Long Island” Expansion Project” Expansion” Existing & Proposed LNG Import Terminals, Northeast Blue = In-service [Distrigas] Yellow = Approved by FERC NEWFOUNDLAND 2 Orange = Approved by Canadian regulators Green = Proposed 1 QUEBEC QUEBEC 4 3 6 5 ONTARIO 7 8 Proposed Terminals 1. Rabaska, Levis-Beaumont, QU: 0.5 Bcf/d (Gaz Métro, Gaz de France, Enbridge) 2. Gros Cacouna Energy, QU: 0.5 Bcf/d (TransCanada, Petro-Canada) 9 3. Canaport LNG, St. John, NB: 0.75 to 1 Bcf/d (Irving Oil, Repsol) 10 4. Bear Head LNG, Point Tupper, NS: 0.75 to 1 Bcf/d (Anadarko) 5. Maple LNG, Goldboro, NS: 1.0 to 2.0 Bcf/d (Keltic Petrochemicals, 11 4Gas, Suntera) 6. Downeast LNG, Robbinston, ME: 0.5 Bcf/d (Kestrel Energy Partners) 13 7. Quoddy LNG, Pleasant Point, ME: 0.5 Bcf/d (Quoddy Bay LLC) 12 8. BP Consulting LNG, near Calais, ME: (BP Consulting LLC) 9. Northeast Gateway Project, Off Cape Ann, MA: 0.4 Bcf/d (Excelerate Energy) 10. Neptune LNG, Off Cape Ann, MA: 0.4 Bcf/d (SUEZ Energy Resources) 11. AES Battery Rock, Outer Brewster Island, Boston Harbor: (AES Corp.) 14 12. Weaver’s Cove LNG, Fall River, MA: 0.4 to 0.8 Bcf/d (Hess LNG) 15 13. KeySpan LNG, Providence, RI: 0.5 Bcf/d (KeySpan & BG LNG) 14. Broadwater Energy, offshore Long Island, NY: 1 Bcf/d (TransCanada Map source: U.S. FERC; Updated and Shell US Gas & Power) by NGA based on public information 15. Safe Harbor Energy, off south shore, Long Island, NY: 1 Bcf/d (Atlantic MARYLAND 16 as of 9-06. Locations approximate. Sea Island Group) Not all pipeline systems shown. 16. Crown Landing LNG, Logan Township, NJ: 1.2 Bcf/d (BP) Canaport™ LNG – Aerial View Courtesy of Repsol (August 31st) Existing & Potential Eastern Canadian Supplies Quebec Offshore Newfoundland Potential exploration White Rose Field; estimate in the St. Lawrence of 2.7 Tcf of gas region New Brunswick Potential development McCully natural gas within next decade field; planned development of small field by Corridor Resources Offshore Nova Scotia Future Potential Deep Panuke field; Offshore Nova Scotia Projected in-service date of Current Production 2010 SOEP producing since 1999; 400-500 MMcf/d Gas – Electric Interface Value of protocols – ISOs and gas industry Regular communication between ISOs and pipelines / Distrigas; committees (EGOC) – Winter and summer For the power sector, gas contract terms remain a key issue (firm vs. non-firm); gas system is designed to meet firm market commitments; no guarantees for non-firm arrangements Generators for most part not making investments in gas system infrastructure. Upcoming Meetings.