Crude Types, Transportation and Handling Systems

Opportunity Crudes 2008: Crude Types, Transportation and Handling Systems

Ashok Anand Manager, Petroleum Quality May 1, 2008

Forward Looking Statements

Certain information provided in this presentation constitutes forward-looking statements. The words "anticipate", "expect", "project" and similar expressions are intended to identify such forward looking statements. Although Enbridge believes that these statements are based on information and assumptions which are current, reasonable and complete, these statements are necessarily subject to a variety of risks and uncertainties pertaining to operating performance, regulatory parameters, economic conditions and commodity prices. You can find a discussion of those risks and uncertainties in our SEC filings. While Enbridge makes these forward-looking statements in good faith, should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary significantly from those expected. Enbridge assumes no obligation to publicly update or revise any forward looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.

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Enbridge Infrastructure Overview Inuvik

Norman Wells

Spain

Zama Fort St. John Fort McMurray Edmonton Hardisty Seattle Regina Portland

Clearbrook Montreal

Superior Ottawa Casper Salt Lake City

Sarnia

Wood River

Covenas OCENSA

Toronto Buffalo

Bogotรก

Toledo

Chicago Kansas City El Dorado Cushing

Saint John

Patoka

Liquids Transportation Gas Transmission Gas Distribution

Houston

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WCSB Supply Production Growth vs.

Pipeline Capacity (000 BPD)

(000 BPD)

3,000

2006 CAPP Forecast New Pipeline 3

2,500

3,000

2,500

New Pipeline 2 2,000

1,500

1,000

2,000

New Pipeline 1 Southern Access

1,500

Current Unutilized Export Capacity

1,000

Enbridge Market Unconstrained Case 500

500

0 2005

0 2007

2009

2011

2013

2015

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Incremental Disposition Summary

Need to Accommodate 2.1 Million BPD incremental basin production by 2015

Export 300-500

Fort McMurray

25 Edmonton Hardisty Kerrobert Puget Sound

Great Falls Billings Salt Lake City San Francisco

50

Regina Cromer Gretna Clearbrook Superior Mandan Casper St. Paul Sinclair

Chicago

750

100 Bakersfield Los Angeles

Montreal

Cheyenne Denver Robinson McPherson Wood River Lima El Dorado Woodriver Patoka Coffeyville Ponca City Cushing Tulsa Memphis Ardmore Borger/Sunray

Toronto Buffalo Detroit Toledo Canton

250

125

Port ArthurLake Charles Houston Texas City New Orleans Freeport Corpus Christi

250-450

Catlettsburg

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Infrastructure Requirement

Regional Pipeline Development

Mainline Expansions

New Market Access Pipelines

Terminaling 6

Alberta Oilsands Regional Pipeline Development Norman Wells

Zama

Fort McMurray

Kitimat

Vancouver

Edmonton

Hardisty Regina

Seattle Portland

Montreal

Toronto Buffalo

Casper Chicago

Salt Lake City

Cushing

Wood Patoka River

Refineries Canadian Supplied Not Canadian Supplied Enbridge Pipelines

Beaumont Houston

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Alberta Oilsands Regional Pipeline Development PetroCanada/UTS (Forthills) Total/Deer Creek (Joslyn) PetroCanada (MacKay River)

ConocoPhillips/Total (Surmont) EnCana (Christina Lake) Waupisoo Pipeline

- Athabasca Pipeline Expansion & Cheecham Terminal - Terminal In-Service Late 2006 Waupisoo Pipeline - 30” diameter, 390 km.’s, 350 KBPD initial capacity -In service mid 2008

Synenco (Northern Lights) Imperial (Kearl) Husky (Sunrise) EnCana (Borealis) Suncor Opti-Nexen (Long Lake) Cheecham Terminal Athabasca Pipeline

Access Pipeline

En

b ri dg eM

8 ain l

ine

Mainline Expansion – Southern Access Expansion

400 kbpd Edmonton to Chicago

Under construction, inservice Q1, 2009

New 42” Pipe from Superior, Wisconsin to Chicago, 456 miles

Edmonton Hardisty

Kerrobert Regina Cromer Gretna

Clearbrook Montreal Superior Toronto Buffalo

Enbridge Mainline

Sarnia Lockport

Southern Access Expansion

Flanagan

Toledo

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Chicago Chicap/Mustang

Spearhead

Wood River

Patoka

Mainline Expansion – Southern Access Extension

400 kbpd Chicago to Patoka

Under construction, inservice Q1, 2009

36” diameter, 178 miles

Edmonton Hardisty

Kerrobert Regina Cromer Gretna

Clearbrook Montreal Superior Toronto Buffalo

Enbridge Mainline

Sarnia Lockport

Southern Access Extension Flanagan

Toledo

10

Chicago Chicap/Mustang

Spearhead

Wood River

Patoka

Mainline Expansions - Alberta Clipper New

36” diameter line, Hardisty to Superior, 1,000 miles

400

kbpd additional capacity into Chicago

Edmonton

in-service

Hardisty

late 2010

Kerrobert Regina Cromer Gretna

Clearbrook Montreal Superior Toronto Buffalo

Enbridge Mainline Alberta Clipper

Sarnia Lockport Flanagan

Toledo

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Chicago Chicap/Mustang

Spearhead

Wood River

Patoka

Mainline Expansion Southern Lights Diluent Supply 180 kbpd diluent capacity Contract pipeline In service 2010 Fully supported by industry Under Construction

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New Market Access 1. Spearhead Expansion I : 65 kbpd, US $ 55 MM, 2009 II : 100 kbpd, US $215 MM, 2011 2. U.S. Gulf Coast

: 200 kbpd, US $200 MM, 2009

3. Eastern PADD II

: 250 kbpd, US $280 MM, 2010

4. Gateway Crude Pipeline : 400 kbpd, US $4.0 B, 2012 Gateway

5. PADD I Pipeline

Fort McMurray

4

: 300 kbpd, US $1.4 B, 2010 - 12

Edmonton

300 kppd Puget Sound Great Falls Billings

Hardisty Kerrobert Regina Cromer Gretna Clearbrook Superior Mandan

Montreal

100 kppd Casper Sinclair

Salt Lake City San Francisco

St. Paul

Cheyenne Denver

Bakersfield Los Angeles

Artesia

Toronto Detroit Buffalo Toledo Lima Canton Robinson

Chicago Wood River McPherson El Dorado Coffeyville Ponca City Cushing Borger/Sunray

El Paso Big Spring Houston Texas City Freeport Corpus Christi

3

Woodriver

Patoka

1

Catlettsburg

Tulsa Ardmore

5

2

Memphis

Port Arthur Lake Charles New Orleans

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Terminaling Footprint & Hotspots

Norman Wells

Upstream

Downstream

Athabasca System

Stonefell Zama Edmonton Fort McMurray

Hardisty

Existing (mil. bbls)

4.0

12.5

Under Development

16.0

14.3

Edmonton Hardisty Calgary

Kerrobert Regina Cromer Gretna Clearbrook Superior Casper

Flanagan

Montreal Sarnia

Toronto Chicago

Salt Lake City

Key

Lockport

Toledo Chicago

El Dorado Wood River

Existing Storage Patoka

Active Development

Cushing Houston Gulf Coast

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New Market Pipeline Delivery Network - 2012 Fort McMurray Edmonton Hardisty Kerrobert Puget Sound

Regina Cromer Gretna Great Falls

Clearbrook

Billings

Casper Sinclair

Salt Lake City San Francisco

St. Paul

Toronto

Cheyenne

Los Angeles

Artesia El Paso

Buffalo Detroit Toledo Lima Canton

Chicago

Denver Bakersfield

Montreal

Superior

Mandan

McPherson El Dorado Coffeyville Ponca City Cushing

Borger/Sunray

Big Spring Houston Texas City Freeport Corpus Christi

Robinson Woodriver

Patoka Catlettsburg

Tulsa Memphis Ardmore

Refineries with increased Canadian Supply

Port Arthur Lake Charles New Orleans

Existing Transmission Pipelines Planned Transmission Pipelines

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Enbridge Commodity Types (Enbridge.com & crudemonitor.ca) API Heavy 19-21 Heavy Hi Tan 19-21 Heavy Lo Resid 20 Medium 30-35 Sour 30-35 Sweet 40 Lt Sweet Synthetic 30-35 Condensate 60 Olefinic NGL Refined Products

%S 2.6-4.5 3.0-4.5 3.0 2.5 1.1-1.8 <0.5 0.1-0.25 0.2

MCR 8.5-11.3 7.5-10 <1.0 6.0 4.0-6.0 2.0 <0.5 -

TAN 0.5-1.05 1.4-3.5 3.5 0.2 0.3 0.2 0.1 -

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Quality Management of Commodities in Enbridge Batched Pipeline • Enbridge controls quality of delivered crude in the following ways.

– In the Pipe: Manage Interface - number, type, size, cut • Line Splits:Like Commodities in segregated lines • Line Rates: Turbulent flow to minimize interface sizes • Batch Sizes: Minimum 60KB, Multiples batch trains • Batch Sequence; Based on least contamination risk • Batch Cuts (Interfaces): Mid point – In the Tank • Tank Bottoms Crossing • Tank Selection/Terminal Piping/Service Change 17

Core Liquid Pipelines Number & Type

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The Quality Matrix â&#x20AC;&#x201C; Number & Type

CRUDE TYPE MATRIX - THE QUALITY PROCESS Heavy -TAN Heavy 1 2 Heavy -TAN 2 1 Heavy 7 6 Medium 7 6 Sour 7 6 Sweet 7 6 Synthetic 7 6 Condensate

Medium 3 3 1 2 5 5 5

Sour 4 4 2 1 4 4 4

Sweet 5 5 3 3 1 3 3

Synthetic 6 6 4 4 2 1 2

Condensate 7 7 5 5 3 2 1

The above numbers rank the order (as a guideline) that should be follow ed w hen changing from crude types.

One being first choice. Seven being the last choice.

When making sequence decisions betw een crudes of the same type(Heavy-Heavy).Reference the crude prices for best choice.

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Line Rates at Turbulent flow size Turbulent Flow

Laminar Flow

Notice the increased size of the mixing area from the Turbulent to Laminar flow

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In The Tank •

•

• •

Tank Selection - This is important to determine the amount of contamination created from station piping. This may increase or decrease depending on the location of the tank and the amount of common piping. Most sensitive crude types closest to manifold.

Tank Bottoms Crossing - The procedure for this is outlined in the Service Levels (Table 5). Outlines how each commodity is treated through tankage at every location from receipt to delivery.

Tank Service Change - Follows a rigid procedure to minimize contamination.

Tank Cleaning - Can cause a product to be delivered with a high S&W which can cause refinery problems. Procedure in place to monitor and restrict high S&W 21

Special Procedures

â&#x20AC;˘ High Tan (Total Acid Number >1.0) commodities have dedicated tanks or flush batch (destined to same facility) is required if routed through a regular heavy tank. â&#x20AC;˘ Cracked products contain olefins desired by very few refineries. Cracked products require both front and back buffers that are sized to contain the cracked crude interfaces. The whole train (buffers and crude) moves into the same refinery.

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ITS Quality Metrics • Reward/penalty based on meeting or exceeding targets set over 5 years (2005-2009). Targets negotiated based on baseline data on main lines only – to Sarnia & Chicago • Targets set on formula which includes – Absolute change + constant x std dev at delivery

• Quality metrics parameters – receipt to delivery – Heavy: sulphur, MCR, TAN – Light Synthetic: sulphur, density – Refined products: diesel flash, uLSD sulphur pick-up

• Light Targets tighten by 50% and Heavy targets tighten by 30% • Performance has been excellent – 23 out of 28 targets in 2007 were in bonus situation indicating the gains in quality of crude being delivered • Connecting pipelines benefiting 23

Summary • Increased crude production of 2.1M barrels/day expected by 2015 • Growth expected in new and existing crude types – some challenging • Enbridge infrastructure being expanded to connect increased supply sources to existing & new markets • ITS Quality metrics benefiting connecting pipelines • Quality metrics principles/practices extended to all expanded infrastructure 24