Overview of the Northern Gateway Pipelines Project March 2013

New Market Access Required to Earn Full Value

2

Petroleum Landscape: Global Demand Growth Going Up

but USA Demand Going Down USA Supply Going Up Canada presently captive to USA Market and Pricing (99% of exports)

Demand: *Through 2030 China and India will experience average annual growth > 3.5%

contrasted with the declining demand for oil in the United States

*International Energy Agency 2009

Market Diversification - Trends in Demand

9

11

13

15

17

19

21

23

1.5

2.0

2.5

3.0

3.5

4.0

2008 2015 2030

Volume  (m

illion  bpd)

Volume  (m

illion  m

3/d)

United  States China  &  India

3

Asia

$89

$102

$113

Alberta Light

WCS

Bakken Light Brent

Maya

Note: Pricing reflects 2012 year to date averages

Price Signals For Export Infrastructure Development

$88 $109

$75

$13

Natural Gas

Light Crude

Heavy Crude

$113 LLS

$2

$3

$96 WTI

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MERCATOR MAP FROM KARO

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Major Scope Items: 1,177 km crude oil and condensate pipelines

Marine terminal

$6.4 billion project

Targeting 2018 in-service

Pipe Design:

525,000 bpd crude oil

193,000 bpd condensate

Kitimat Terminal:

5 million barrels of storage

2 berths

VLCC ready

The Northern Gateway Project Key Elements

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Northern Gateway - Benefits for Canada

Canada will be the largest Project beneficiary

British Columbia and Alberta are also significant beneficiaries

Benefits for British Columbia & Alberta

4100 person-years Direct On-Site Employment

1400 person-years Direct On-Site Employment

Total $ 830 Million

Total $232 Million

BC

AB

Why Is The Project Controversial? Ideological opposition to oil sands

First oil pipeline to the northern BC coast (lack of local familiarity)

Unsettled BC land claims and concerns regarding impact on Aboriginal rights and traditional way of life

River Crossings & Marine Route

Crossing several significant salmon rivers

Legacy of Exxon Valdez

Legacy of Queen of the North

Imperfect Pipeline Industry track record

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Enbridge Safety & Integrity

Objective is to be top quartile (goal = best) Integrity management Leak detection Incident response Worker occupational safety Public safety / environmental protection

Recent pipeline integrity activity 2,500 integrity digs

138 inline inspection tool runs

$2.9B integrity investment since 2002

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Evolution in Pipeline Technology & Safety

Route and watercourse crossing selection

Stringent steel chemistry & strength testing Fusion bond epoxy coated pipe used & inspected Every weld will be inspected during construction Cathodic protection prevents corrosion during operation Enhanced protection: thicker steel, shut-off valves Pipe hydrostatically tested 24/7 monitoring from control center Routine aerial reconnaissance of pipeline ROW Increased monitoring with in-line inspection tools

Control center

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Existing Tanker Routes & Tanker Exclusion Zone

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12

Marine Measures: exceed regulation & current practice

Regulatory Requirements: Double hulled ships / multi compartment BC pilots (plus redundant nav-aid systems) Emergency preparedness and response planning

Enhancements to Safety: Tanker route simulation Improved navigational aids, new radar Vetting of ships and crew Weather monitoring criteria for ship transit Reduced vessel speeds in marine channels Tug escort operations (tethered towing) Closed loading and containment booms

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Broad Aboriginal & Community Consultation

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Portfolio of Aboriginal Benefits (short, med & long term)

Equity ownership 10% (incl. MNBC & MNA) Structured to access credit

Procurement $300 Million targeted (P/L & Stations) Based on Enbridge experience Depends on capacity

Qualified and competitive

Employment & Training 15% construction target Work with prime contractors

& Unions

Tax income on Reserve land base

Marine & Tunnel Benefits (~ $200 Million+ / -)

Aggregate value ~ $1 Billion

2011 Aboriginal Business Summit

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Public regulatory review (Joint Review Panel) led by:

Economic & technical feasibility, socio-economic & environmental protection Q: Is this project in the overall interest of Canadians? Conditions?

Canadian Environmental Assessment Agency (CEAA) high-quality environmental assessments in support of sustainable development

Q: Can this project be undertaken in an environmentally sound manner? Conditions?

Additional agencies, including:

Transport Canada Department of Fisheries and Oceans Indian and Northern Affairs Natural Resources

Rigorous and Open Public Review Process

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Regulatory Timeline

Regulatory Application

Filed (May 2010)

NGP In-Service

Date 2018+

gatewaypanel.review-examen.gc.ca

Community Hearings

cont. 2013

The above timeline is illustrative and subject to change

Construction

JRP community review of Issues

and required additional

information

Community Hearings

(started Jan 10, 2012)

Final Hearings (started

Sept 2012)

Information Requests

(Aug 25 to Nov, 2011)

Regulatory Decision / Detailed

Engineering

Deadline to Register for Oral Stmts Oct 6, 2011

Deadline for Letters of Comment

Aug 31, 2012

JRP is a quasi-judicial, independent tribunal

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Path Forward Our View

Public: Increasing appetite for fact and evidence-based discussion

Enbridge & Industry: Increasing focus on earning social license

JRP recommendation Dec. 2013

Conditional approval of Project i.e. with conditions promoting reconciliation (~ mid 2014)

As JRP hearings wrap up, engagement focus will increasingly turn to benefits

Scope for industry collaboration e.g. in training-to -employment initiatives 18

Thank You

Questions?

Auxiliary Slides If Time Allows

Exxon Valdez Then and Now - Prevention

Prevention Valdez, AK (1989)

Valdez, AK (2009)

Northern Gateway

Tanker escort tugs Ocean rescue tug Double hull tankers Vessel monitoring Emergency preparedness planning Regulatory oversight Health, safety and environment programs

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Exxon Valdez Then and Now - Response

Response Valdez, AK (1989)  

Valdez, AK (2009)  

Northern Gateway  

Multiple equipment locations      Equipment readily available      Oil recovery and storage capacity      Trained responders      Protection of sensitive areas      Managed response      Communications infrastructure      Practice drills      

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