Canadian Supply Options for the Northeast Marketplace
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Canadian Supply Options for the Northeast Marketplace Northeast Restructuring Roundtable - April 30, 2010 Don Bell, Director, Commercial East, Canadian and Eastern U.S. Pipelines. Forward-Looking Information.

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Canadian supply options for the northeast marketplace

Canadian Supply Options for the Northeast Marketplace

Northeast Restructuring Roundtable - April 30, 2010

Don Bell, Director, Commercial East, Canadian and Eastern U.S. Pipelines


Forward looking information

Forward-Looking Information

This presentation may contain certain information that is forward looking and is subject to important risks and uncertainties. The words "anticipate", "expect", "believe", "may", "should", "estimate", "project", "outlook", "forecast" or other similar words are used to identify such forward-looking information. Forward-looking statements in this document are intended to provide TransCanada shareholders and potential investors with information regarding TransCanada and its subsidiaries, including management’s assessment of TransCanada’s and its subsidiaries’ future financial and operations plans and outlook. Forward-looking statements in this document may include, among others, statements regarding the anticipated business prospects and financial performance of TransCanada and its subsidiaries, expectations or projections about the future, and strategies and goals for growth and expansion. All forward-looking statements reflect TransCanada’s beliefs and assumptions based on information available at the time the statements were made. Actual results or events may differ from those predicted in these forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among other things, the ability of TransCanada to successfully implement its strategic initiatives and whether such strategic initiatives will yield the expected benefits, the operating performance of the Company’s pipeline and energy assets, the availability and price of energy commodities, regulatory processes and decisions, changes in environmental and other laws and regulations, competitive factors in the pipeline and energy industry sectors, construction and completion of capital projects, labour, equipment and material costs, access to capital markets, interest and currency exchange rates, technological developments and the current economic conditions in North America. By its nature, forward‑looking information is subject to various risks and uncertainties, which could cause TransCanada's actual results and experience to differ materially from the anticipated results or expectations expressed. Additional information on these and other factors is available in the reports filed by TransCanada with Canadian securities regulators and with the U.S. Securities and Exchange Commission (SEC). Readers are cautioned to not place undue reliance on this forward‑looking information, which is given as of the date it is expressed in this presentation or otherwise, and to not use future-oriented information or financial outlooks for anything other than their intended purpose. TransCanada undertakes no obligation to update publicly or revise any forward‑looking information, whether as a result of new information, future events or otherwise, except as required by law.


Agenda

Agenda

  • TransCanada Overview

  • WCSB Myths and Realities

  • Shale Opportunities

  • Mainline Competitiveness Initiative


Canadian supply options for the northeast marketplace

Pipelines

Pipelines (Proposed)

Pipelines (In Development)

Power Facilities

Gas Storage

LNG (Proposed)

TransCanadaCorporation (TSX/NYSE: TRP)

  • North America’s Largest Natural Gas Pipeline Network

    • 60,000 km wholly owned

    • 8,800 km partially owned

    • Average volume of 15 Bcf/d

  • North America’s 2nd largest Natural Gas Storage Operator

    • 380 BCF of capacity

  • Canada’s Largest Private Sector Power Generator

    • 20 plants, 11,700 MW

  • Premier North American Oil Pipeline under Construction

    • 1.1 million bbl/d

  • 4000 Talented Employees

    • In 7 provinces and 34 states


Myths and realities canadian shales

Myths and Realities – Canadian Shales

  • Myth - Canadian Shales are not as prolific as U.S. Shales, and even so are too far away from the market to be commercial.

  • Reality:

    • WCSB shales are prolific

    • WCSB shales are competitive

    • NIT levels the playing field

    • Pipeline access

  • Myth - The WCSB is in steep decline and will not recover.

  • Reality:

    • Significant increase in productive potential in the longer term

    • Technology is driving WCSB unconventional growth

    • WCSB conventional resources can continue at high levels for years

    • Step changes strengthen the WCSB conventional outlook


  • Key characteristics of some canadian and u s shales

    Key Characteristics of Some Canadian and U.S. Shales

    By any measure involving purely geological reservoir parameters, the Horn River and the Montney resource plays compare very favourably to their U.S. counterparts.


    Alberta competitiveness initiative

    Alberta Competitiveness Initiative

    Background:

    • Alberta Government announced new royalty program October 2007

    • Increase royalties from range of 5% - 35% to range of 5% to 50%

    • Some short term changes made, April – Nov 2008, to address unintended consequences from original proposal plus recessionary impacts

      New Framework

    • Alberta government listened, heard and responded

    • 5% incentive for new wells set to expire in 2011 is now permanent

    • Maximum gas royalty falls from 50% to 36%

    • All royalty curves will be finalized and announced May 31, 2010

    • Further changes to enhance innovation recognizing higher costs of new and advanced technologies

    • Alberta Government report on a process to streamline the current regulatory process due June 2010

    “We must take the necessary steps to position Alberta as one of the most competitive North American destinations for energy investment” – Ron Liepert, Alberta Energy Minister - Mar 17, 2010.


    Ultimate potential of the wcsb

    Ultimate Potential of the WCSB

    • The shift to shale development, tight gas and CBM has more than doubled the remaining production potential of the WCSB

    • Conventional supply can continue to produce at high levels for many years

    • Source: ERCB & Gas Potential Committee

    • Source: TransCanada


    Canadian supply options for the northeast marketplace

    Shale Opportunities


    Canadian supply options for the northeast marketplace

    Northeast B.C. Shale Opportunities

    Pipelines

    Proposed Pipelines

    Gas Storage Facilities

    North Central Corridor

    • 300 km, 42-inch pipe

    • 26 MW of compression

    • Approximately $780 million

    • In-service – April 2010

      Groundbirch Pipeline Project

    • Commitments for 1.1 Bcf/d by 2014

    • 77 km, 36-inch pipe

    • Approximately $200 million

    • Expected in-service Q4 2010

    • NEB Approval March 4, 2010

      Horn River Pipeline Project

    • Commitments for 503 MMcf/d by 2014

    • 155 km combination of new 36-inch pipe and existing pipe

    • Approximately $307 million

    • Filed with NEB Feb 2010

    • Expected in-service Q2 2012


    New service contracts horn river and montney

    New Service Contracts:Horn River and Montney

    MMcf/d


    Marcellus shale opportunities

    Marcellus Shale Opportunities

    • Various infrastructure projects announced to capture Marcellus Shale supplies

    • Most projects targeted at U.S. Northeast markets

    • Recently, projects announced to bring Marcellus supplies to Canada


    Proposed projects to bring marcellus gas to canadian markets

    VT

    NH

    TCPL

    NY

    Iroquois

    ON

    Marcellus to Niagara Path – Tennessee Gas Pipeline

    MA

    Tennessee

    Niagara

    Parkway

    Tioga County Expansion – Empire Pipeline

    EmpireState

    CT

    Chippawa

    Aurora

    Millennium

    Union

    Marcellus to East Aurora Path – Tennessee Gas Pipeline

    DAWN

    Algonquin

    Tennessee

    Existing

    Compressor

    Station 313

    MARCELLUS

    SHALE

    National

    Fuel Gas

    NJ

    LEIDY

    Marcellus to Leidy Path – Tennessee Gas Pipeline

    DEVONIAN

    SHALE

    Northern Access - National Fuel Gas

    PA

    OH

    TETCO

    Proposed Projects to Bring Marcellus Gas to Canadian Markets


    Canadian supply options for the northeast marketplace

    Mainline Competitiveness


    Comprehensive package mainline competitiveness

    Comprehensive Package Mainline Competitiveness

    Objective

    Lower tolls

    Toll stability and certainty

    Economic Alignment btw Shippers and TransCanada

    Flexible Product Offering

    Key Components

    Rate Design Concepts

    Service Concepts

    Business Model Concepts


    Toll impact gj

    Toll Impact (¢/GJ)


    Canadian supply options for the northeast marketplace

    Thank You


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