Creang!aStronger!Future!Together:!! SpectraEnergy!–BG...

Crea&ng a Stronger Future Together: Spectra Energy – BG Group Project Rob Whitwham Vice President, Canadian LNG Me3s Na3on Regional Economic Development Engagement Session Vancouver, Bri3sh Columbia March 18, 2013

Me3s Na3onal Council – March 2013

Forward Looking Statements This presenta&on includes forward-‐looking statements. The forward-‐looking statements reflect management’s current beliefs and assump&ons with respect to such things as the outlook for general economic trends, industry trends, commodity prices, capital markets, and the governmental, legal and regulatory environment.

Forward-‐looking statements relate to, among other things, an&cipated financial performance, business prospects, strategies, regulatory developments, new services, market forces, commitments and technological developments.

Although management believes the an&cipated results or other expecta&ons reflected in such forward-‐looking informa&on are based on reasonable assump&ons, no assurance can be given that such results or expecta&ons will be correct. By its nature, such forward-‐looking informa&on is subject to various risks and uncertain&es, including those material risks discussed in Spectra Energy’s 2011 annual report on Form 10-‐K, Westcoast Energy’s 2011 Annual Informa&on Form and in management’s discussion and analysis in Westcoast Energy’s 2011 Annual Report, which could cause WEI’s actual results and experience to differ materially from the an&cipated results or other expecta&ons expressed.

Undue reliance should not be placed on this forward-‐looking informa&on, which is given as of the date of this presenta&on, and we undertake no obliga&on to update publicly or revise any forward-‐looking informa&on, whether as a result of new informa&on, future events or otherwise.

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Spectra Energy in North America

Note: Close of Express-‐PlaLe System acquisi3on is pending.

• 5,400 employees -‐ 3,500 in Canada • Directly serve 1.4 million Canadian homes and businesses • Have spent $3.8 billion in Canada since 2007; ~$400 million/year on system integrity • B.C. projects: 4,000 new jobs and 40-‐60 permanent posiLons through 2020 • Pay $270 million in annual federal taxes in Canada • Span seven provinces and 26 states • Our business is growing

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B.C.’s Natural Gas Legacy

q  Originally developed with big-‐picture vision for B.C.’s energy and economic future

q  Economic development engine for new industries, service sectors

q  Deep roots in B.C. communi&es and long-‐standing rela&onship with Aboriginal communi&es

q  CommiZed to safety, reliability and community benefits

q  “Backbone” infrastructure with step-‐out system growth opportuni&es

q  Cri&cal to LNG export development

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•  Ongoing efforts to reduce greenhouse gas emissions from natural gas pipeline ven&ng and flaring

•  Major investments in mainline compressor upgrades to maximize fuel use efficiency and reduce emissions

•  Waste heat recovery installed at two mainline compressor sta&ons

•  Recognized by the Intergovernmental Panel on Climate Change as a world leader in Carbon Capture and Storage technology •  CCS facili&es in opera&on today •  Inves&ga&ng world-‐scale CCS project at Fort Nelson Plant = ~2 MT/year

Spectra Energy and Sustainability Focused on minimizing impact

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Bri3sh Columbia

450

410

160

125

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Horn River

Montney

Cordova

Liard

BC Conven&onal

Resource PotenLal (Tcf) Liard

Cordova

Montney

Horn River

Alberta

VANCOUVER

CALGARY

SEATTLE

EDMONTON

Ki#mat

Prince Rupert

Source: BC Oil & Gas, CAPP, CSUG, NEB

Western Canadian

Sedimentary Basin (WCSB)

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Basin size and volumes of gas delivered per well Well-‐established industry Seasoned operators focused on safety and reliability Proven regulatory framework Distance from tradi&onal North American markets

+

+

+

+ –

Developing World Class Natural Gas Reserves


Alberta

Ki#mat

Prince Rupert

Bri3sh Columbia

Investments in B.C. (in $B) E&P: Natural gas development 140-‐200

LNG Infrastructure: LNG terminals ~30-‐40 Pipelines supplying terminals ~10-‐15 Midstream infrastructure ~10-‐15 Source: Conference Board of Canada

LNG Infrastructure

E&P Investments

CALGARY

EDMONTON

SEATTLE

VANCOUVER

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B.C. – AZrac&ng Global Investment

Capitalizing on this opportunity will require focus on: •  Rigorous project reviews, done

intensively, BUT done once •  Preparing for the demands for skilled

labour •  Tax and royalty regimes that aZract

capital •  Partnering with Aboriginal and local

communi&es to create economic benefits


Spectra Energy’s B.C. Business Backbone of the natural gas sector

Bri3sh Columbia

Significant BC Footprint

Gathering & Processing Plants: 17

Capacity: 3.7 Bcf/d Gathering Pipeline: 3,500 km

BC Pipeline Pipeline: 2,900 km Capacity: 2.9 Bcf/d

CALGARY

EDMONTON

VANCOUVER

Alberta Ki#mat

Prince Rupert

SEATTLE

Horn River

Montney

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StaLon 2

Cordova Embayment

Liard

~60% of BC natural gas producLon is through Spectra Energy faciliLes

$2.2 billion invested over last 5 years in preparaLon for LNG

export opportuniLes


Spectra Energy’s Dawson Facili&es Expanding to serve Montney growth

Dawson Processing Plant Phase I •  Supported by firm, demand-‐based contracts •  Phase 1 – in service and can process 100 MMcf/d

Dawson Processing Plant Phase II •  Phase II allows for addi&onal 100 MMcf/day, now in-‐service

New Natural Gas Liquids (NGL) ExtracLon OpportuniLes •  Dawson III -‐ 400 MMcf/d natural gas liquids (NGLs) extrac&on facility and a residue gas pipeline -‐ feasibility stage engineering is underway

•  Subject to regulatory process, construc&on to begin in Q1, 2014 with a targeted in-‐service date of Q4, 2015

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•  Providing North Montney customers with gathering, processing and pipeline take-‐away capacity

•  Developing ~ $300 million in projects

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North Montney Development Expansions U3lizing Exis3ng Infrastructure to Increase Capacity

North Montney area growth is acceleraLng


Spectra Energy’s Fort Nelson Assets Posi3oning for future Horn River growth

•  800 MMcf/day expansion program in the region is almost complete

•  Last piece of the puzzle, Fort Nelson North Processing Facility, coming online this month

Fort Nelson North Processing Facility

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Spectra Energy – BG Group Advancing project to Prince Rupert

Spectra Energy-‐BG Group Project •  850 kilometres •  Up to 4.2 billion cubic feet per day (Bcf/d) of natural gas to serve BG Group’s proposed LNG Plant on Ridley Island

•  Construc&on mid-‐decade, opera&ons end of decade

•  Conceptual route developed based on preliminary assessments of environmental, historical, cultural and constructability factors

•  More than one year of stakeholder input collected/reflected in planning to date, ongoing consulta&on a priority

•  Environmental review process has begun

•  Well posi&oned to serve west coast LNG exports

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Spectra Energy – BG Group


LNG – Canada/B.C. Development Sensi&vi&es

• Massive gas supply posi&on

•  Proximity to Asian markets

• Well-‐developed gas industry

– 60% of all BC natural gas produc&on touches Spectra system, expansions underway

•  Efficient capital markets

•  Suppor&ve governments, rule of law & regulatory process

• Market-‐based environment, open for business

• Growing popula&on of Aboriginal youth looking for work in northern loca&ons

•  Currently lagging Australia and US, no history of LNG export in Canada

•  Project approval &melines; Asian markets are skep&cal of deliverability

•  Emerging issues on “social license”

•  Labour supply & cost structure •  Large scale project: logis&cs, port capacity, roads, rail, remote loca&ons

•  Rela&onships with Aboriginal communi&es are not well understood, and in some places seen as a risk

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Strengths/OpportuniLes Challenges


Our Aboriginal Rela&ons Goals and Values

•  ConsultaLon & CommunicaLon –  Share project related

informa&on on an ongoing basis

–  Understand and address, where appropriate, concerns or issues raised

•  RelaLonship Building –  Build a track-‐record of trust as

we build our business •  Capacity Building

–  Sponsor training and development opportuni&es/workshops

•  Economic Development –  Include Aboriginal businesses

as we develop our projects

We recognize and respect the unique cultural and historical characteris#cs of Aboriginal people and their connec#ons to the land – and this understanding

helps guide our ac#ons

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B.C.’s LNG Export Opportunity Project development “musts”

•  Boos&ng natural gas literacy across the province •  Explaining the “why now” of export strategy •  Consul&ng early and osen with boots on the ground •  Incorpora&ng feedback into project development and design •  Delivering local jobs and community benefits •  Preparing for skilled labour requirements

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New Natural Gas Supply

• B.C. has enough gas to meet our own needs, and to export natural gas to new places looking for clean burning energy

Jobs • Moving natural gas to new places protects exis&ng jobs in B.C., and will create new jobs for more people in more places

OpportuniLes for Growth

• At Spectra Energy, we want to take what we’ve learned over the last 55-‐years working in B.C., add local and Aboriginal input, and build a sustainable natural gas sector in B.C.

Why Natural Gas, Why Now?

www.energyforbc.ca 16


Environmental Social Governance Performance

Dow Jones Sustainability Index (DJSI)

•  3rd &me on the World Index and 5th consecu&ve on North America Index

Carbon Disclosure Project (CDP)

• Named to the 2012 Global 500 and S&P Carbon Disclosure Leadership Indexes; 4th year to be named to one or more leadership index

Recogni#on and Awards

Ethisphere • World’s Most Ethical Companies, 2013

Newsweek Green Rankings •  #381 on the top 500 North American companies and 14th in the energy sector

Corporate Responsibility Magazine

•  Top 100 corporate ci&zens: ranked 7th overall and first among energy companies

Employer Awards

•  Top 100 workplaces in Houston; Top 100 employers in Canada •  Canada’s Greenest Employers -‐ Union Gas among the na&on’s most environmentally-‐aware companies •  Corporate Equality Index • An& Defama&on League: Community of Respect

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Spectra Energy Sustainability Recogni&on

Creang!aStronger!Future!Together:!! SpectraEnergy!–BG...

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