Project Overview Erika Young Project Director Business Development - - PowerPoint PPT Presentation

Erika Young

Project Director Business Development

August 3, 2016 NEXUS Gas Transmission

Project Overview

Appalachian Shale Supply

2

Power Generation Gulf Coast LNG & Industry Power Generation City Gate & Power Generation City-Gate Market Growth Mexico

41 Bcf/d

2025 Avg Estimate

21 Bcf/d

Current Estimate

10 20 30 40 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029

Marcellus Estimated Production Volumes (Bcfd)

Source: Various Consultants

10 20 30 40 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029

Utica Estimated Production Volumes (Bcfd)

Source: Various Consultants

NEXUS – Favorable Supply/Demand Dynamics

3

Abundant Marcellus & Utica Supply

• Over 40 Bcf/d of

supply by 2025 needing an economic outlet

• Declining supply to

Great Lakes region from Gulf Coast and Western Canada

Liquidity

• Dawn - 2nd largest

physical natural gas trading hub

• Daily traded volumes

at MichCon, Chicago and Dawn have exceeded that of Henry Hub

Long-term Value

Attractive basis at Dawn and economic transport over long- term

Flexibility with Storage

950 Bcf of working capacity, 23 Bcf/d peak design withdrawal capacity

Growing & Diverse Demand Markets in Great Lakes Region*

• Peak month demand

averaged ~26 Bcf/d in January 2014

• 3.3 Bcf/d increase in

Power Sector Gas Demand from 2014 to 2030.

• LDCs and End-Users

connected along the route.

*Great Lakes Region - Ohio, Michigan, Illinois, Indiana, Ontario and Wisconsin Sources: CERA; DTE Analysis; Various Consultants

A joint venture between Spectra Energy and DTE

NEXUS - Scope

Project Scope:

Vector

NEXUS is on target for November 2017 in-service Key Advantages:

• Market pull and producer push project
• Project leverages existing infrastructure, minimizing environmental

impacts and providing greater access to secondary markets

• Northern route through Ohio connects NEXUS to growing market

demand centers, including power generation and industrials

• Connects shippers to growing markets in Michigan and Ontario, with

a combined 3 + Bcf/d incremental demand expected by 2025 Capacity: 1.5 Bcf/d Design: ~255 miles of 36” pipe 130,000 HP with 4 compressor stations New M&R Stations

• Kensington Processing Plant
• Tennessee Gas Pipeline
• Texas Eastern Ohio Line
• DTE Gas Transportation System at Willow

Run, MI (delivery)

• Dominion East Ohio
• Columbia Gas of Ohio

Connections Various Ohio LDCs and end-users In-Service: November 2017 CapEx: $2+ billion

4

NEXUS Project Schedule

5

NEXUS has consistently met milestones and is on target for a November 2017 in-service date

Key Milestones

2014

October Held 9 voluntary informational sessions in OH and MI

2015

January FERC accepted project use of pre-filing process Submitted first drafts of Resource Reports 1 & 10 February Held 10 Open Houses in OH and MI April/May FERC held 6 scoping meetings in OH and MI June Submitted draft Resource Reports November Filed FERC Certificate Application December Received Notice of Application (NOA)

2016

Feb/March Placed Compression Order March Pipeline Construction Contractors Awarded April Filed Supplemental Filing on FERC docket May Received FERC Notice of Schedule (NOS) July Received favourable Draft Environmental Impact Statement (DEIS) from FERC

Residential Commercial Industrial Power Generation

0.0 0.5 1.0 1.5 2.0

2000 2005 2010 2015 2020 2025 2030

TCF/Yr

Combined Annual Demand Outlook

Growing natural gas demand continues through 2030

Demand Growth Ontario & Québec

Pipeline Fuel 6

Source: ICF Q2’ 2016 Outlook

Union Gas Supply Portfolio

System Supply Opportunities

Portfolio Today Portfolio - Projected 2018

7

8

Portfolio Today Portfolio - Projected 2018

Enbridge Gas Distribution Supply Portfolio

System Supply Opportunities

WCSB 30% Chicago 9% NEXUS 15% Dawn 20% Niagara 26%

• Portfolio’s changing to purchase more natural gas in close

proximity to the market (Appalachia)

— Reducing dependency on the Western Canadian supply as ability to move its supply east is declining — Union Gas and Enbridge provide natural gas commodity for 95%

• f its core residential/commercial market
• Union and Enbridge were granted approval of long-term

transportation contracts on NEXUS totaling 260,000 Dth/d

— Union 150,000 Dth/d — Enbridge 110,000 Dth/d

Utility Supply Portfolio Supply from Appalachia

9

• The number of customers buying gas at Dawn is increasing

– Union, Enbridge and GMI providing greater access to direct purchase customers to access the liquid Dawn Hub – Union Dawn Parkway system capacity increasing by over 1.2 Bcf/d between 2015 and 2017

• Future growth opportunities

– CNG/LNG – Community expansion

• Traditional gas supply from Western Canada coming to

Ontario has been declining

Utility Supply Portfolio The Need for Supply at Dawn

10

The NEXUS Advantage to End Users

11

NEXUS provides the following advantages with direct access to Utica and Marcellus basins in the Appalachian region :

 Diversity of supply which enhances reliability and reduces price volatility  Growing supply basins replace traditional, declining supply sources  Favorable Appalachian basin pricing  Availability of long-term firm transportation capacity during peak demand periods  Lower risk transportation solution via

• ptimal route selection, diverse

customer mix and experienced project owners

The NEXUS Project Will Supply Abundant And Affordable Natural Gas Supplies To A Region Where Traditional Natural Gas Supply Sources Are Declining

The NEXUS Advantage – well connected supply

12

The NEXUS Advantage to Eastern Canada

13

NEXUS provides access to abundant, affordable natural gas supply which will fuel economic growth in Eastern Canada:

1) Industrial growth 2) Refineries

• Low cost fuel supporting greater efficiency

3) Transportation

• LNG/CNG development for transportation reducing environmental footprint

4) Connecting remote and rural communities

• Government incentives to facilitate access to natural gas

5) Power generation

• Combined heat and power (CHP)
• New Natural Gas Power Plants
• Natural gas filling the gap during nuclear refurbishments

Natural gas sourced from the Appalachian region will contribute to the economic growth of Eastern Canada

• Approximately one third
• f route uses existing

infrastructure

• Greenfield route is

approximately 87% co- located in utility corridors and/or is in agricultural areas

• Diverse set of

customers

• 13 market connection

agreements with LDCs, industrial facilities and power generators

14

Long-term Value of NEXUS

• Connections provide

Utica and Marcellus production access and flexibility

• Demand growth,

coupled with declining flow from Western Canada and Gulf Coast will create a need for new supply

• Access to growing

supply basin in close proximity to the Great Lakes region provides competitively priced, diverse supply for Ohio, Michigan, and Ontario consumers

• Path provides

secondary in-path access to: – DTE Gas and DTE Electric load centers – MichCon trading hub – DTE storage – Consumers Energy – Vector – ANR Pipeline – Panhandle Eastern Pipelines – Dawn Hub NEXUS provides long-term value for its customers, key stakeholders and the communities it serves.

Connects growing supply with growing markets Flexible service to liquid markets Foundation for Economic Growth Long-Term Community Investment

• NEXUS Investment

Focus Areas:

• Community Vitality

(Safety)

• Education and

Workforce Development

• Environmental

Stewardship

Appendix

15

Our Businesses: What We Do

16

U.S. Transmission Western Canada Field Services Liquids Deliver & store natural gas Transport crude oil from Canada to Midwest U.S. Produce natural gas liquids & process natural gas Distribution Distribute natural gas to homes & businesses in Ontario Process & deliver natural gas & natural gas liquids

DTE Corporate Overview

17

DTE Electric Gas Storage & Pipelines Energy Trading DTE Gas

• 10th largest U.S. electric

utility in the US

• 2.1 million distribution

customers in southeast Michigan

• Fully regulated by the

Michigan Public Service Commission

• 11th largest U.S. gas utility
• 138 Bcf of working gas

storage capacity; purchases 120 – 150 Bcf/yr

• 900 Bcf annual throughput
• 1.2 million distribution

customers

• Fully regulated by the

Michigan Public Service Commission

• Transports gas on more

than 60 pipelines

• Asset management and

sales to major utilities

• Producer services,

including risk management

Power & Industrial Projects

• Owns and operates

energy assets – Industrial / utility solid fuels – Utility services and renewable energy

• Transports and stores

natural gas

• 91 Bcf of gas storage;

535 miles of pipeline

Strong, Stable and Growing Utilities ~80% of earnings Complementary Non-Utility Businesses ~20% of earnings