Alaska LNG Concept Information

Alaska LNG

Overview

October

December 3, 2013

Alaska LNG Concept Information Project Overview

Project Team • BP, ConocoPhillips, ExxonMobil and TransCanada are

working together to progress an Alaska LNG project: − 300+ people involved in project planning and design work − Multiple third-party contractors engaged, including

Alaskans − Leveraging Denali, APP, and related material ($700M past

work)

Project Description • Concept selection work to date:

− Gas treatment plant located on the North Slope − An 800-mile, 42-inch diameter pipeline − Up to 8 compression stations − At least 5 off-take points for in-state gas delivery − Liquefaction plant and marine export terminal located in

south-central region − Lead site is Nikiski

− Preliminary capital investment: $45-$65B

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Alaska LNG Concept Information LNG Plant and Marine Terminal Site Selection

• Lead Site – After evaluating more than 20 locations, the Project Team has identified a primarily industrial area near Nikiski.

• The Team has performed considerable technical work for both the location of the plant as well as the viability of Nikiski for LNG tanker operations.

• A Nikiski LNG plant site takes into consideration a pipeline route that provides access to natural gas for: – Fairbanks – Mat-Su Valley – Anchorage – Kenai Peninsula

• Alaska LNG wants to be a good neighbor. • Our goal is to lessen impacts and enhance

benefits to the businesses and residents in the area.

Alaska LNG Plant Conceptual Layout

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Alaska LNG Concept Information Land Access

• Access to land is part of project development. • Access to land allows further engineering and feasibility studies, including

environmental, geotechnical, soils, groundwater and other research as necessary to confirm the LNG plant and terminal site selection.

• The exact parcels that we want to access are confidential. We do not have a specific timetable for completing the process.

• We hope that we will be able to reach an arrangement with the landowners in the areas we are interested in accessing.

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Mark Jennings

Alaska LNG Concept Information

Field Studies • 2013 Summer Field work completed September 2013:

– Cultural Resources: >6,500 acres – Hydrology / Lakes / Fisheries studied: 27 / 17 / 20 – Subsistence and Health Impact Assessments starting

this winter (2013/14) – 150 people involved in field studies (60% Alaskans)

• Alaska LNG is now working to answer key technical questions to reduce uncertainty and continue advancing the project.

• The multi-year field work effort is now underway. • We are working to complete the 2013 program and are

planning for the 2014 season. • The primary scope of field work is to analyze existing

environmental conditions along project footprint – Planning, logistics, and permitting to support

survey work

– Public and agency engagement to support survey work and ongoing project planning

Previous and Current Work Key project design accomplishments • Confirmed ability to integrate into existing

operations • Completed project design concept, announced

Feb 2013 • Finalized LNG Lead Site

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Alaska LNG Concept Information Benefits for Alaskans

• A successful Alaska LNG project would provide a host of economic benefits to Alaskans including:

– State revenues – Short and long-term job opportunities – Business and industrial opportunities

• Commercializing North Slope natural gas through the Alaska LNG Project will provide Alaskans access to a cleaner burning and dependable energy source to supply ongoing in-state energy demand via five off-take points along the pipeline route.

• The off-take points would be decided following consultation with State officials and local utilities

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Alaska LNG Concept Information Key Issues, Timing and Next Steps

Key Issues − “Mega-project” challenges (labor, resources, equipment, schedule, etc.) − Uncertainty related to permit timing and scope

Next steps − Completing field studies in preparation for regulatory submissions

− Winter Field Season 2013/14 − Summer Field Season 2014

− More detailed engineering and design work for an LNG plant, marine export terminal, LNG tanker fleet, a pipeline and a gas treatment plant

Project timing − Preliminary engineering and environmental studies within a 3-5 year timeframe (depending on

regulatory approvals) − After regulatory approvals are received and funding is secured, final engineering, design,

procurement and construction may be completed in 5-6 years

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Alaska LNG Concept Information Contact Us

• If you have questions or concerns, please call our Alaska toll-free number

• We will respond to you and put your name and address in our stakeholder database, which will give you the option to automatically receive project updates

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Mark Jennings

Alaska LNG

Kenai Peninsula Office 120 Trading Bay Road Suites 310, 320 Kenai, AK 99611

Toll-free number: 855-550-5445

Alaska LNG Concept Information

Additional Information

Alaska LNG

Alaska LNG – Integrated Team

Producing Fields Lead: BP

Pipelines Lead: APP

LNG Plant Lead: ConocoPhillips

ERL Team Lead: ExxonMobil

Commercial Team Lead: BP

Concept Team Lead: ExxonMobil

Management Committee

Technical Committee

Multimillion Dollar, Four-Company Effort – 125+ Employees, 100+ Contractors •Joint work commenced March 31, 2012 after completion of the Pt. Thomson Settlement / joint work agreements •Cooperative effort among the leading North Slope producers and a leading North American pipeline company •Identified potentially viable LNG project options to monetize ANS natural gas •Used company strengths, shared information / expertise; built upon past efforts, sought out new ideas

Integration Team Lead: ExxonMobil

Alaska LNG – Project Concept Description

Gas Treating •Located at North Slope or Southcentral LNG site •Remove CO2 and other gases and dispose / use •Footprint: 150 - 250 acres •Peak Workforce: 500 - 2,000 people •Required Steel: 250,000 - 300,000 tons •Among largest in world

Liquefaction Plant • Capacity: 15 – 18 million tonnes per annum (MTA)

3 trains (5-6 MTA / train) • Potential areas: 22 sites assessed in Cook Inlet, Prince

William Sound and other Southcentral sites • Footprint: 400 - 500 acres • Peak Workforce: 3,500 - 5,000 people • Required Steel: 100,000-150,000 tons

Storage / Loading • LNG Storage Tanks, Terminal • Dock; 1 - 2 Jetties • Design based on 15– 20 tankers • Peak Workforce: 1,000-1,500 people

Estimated Total Cost: $45 – $65+ Billion Peak Construction Workforce: 9,000 – 15,000 jobs Operations Workforce: ~1000 jobs in Alaska

Descriptions and costs are preliminary in nature and subject to change. Cost range excludes inflation.

Pipeline • Large diameter: 42”- 48” operating at >2,000 psi •Capacity: 3 - 3.5 billion cubic feet per day •Length: ~800 miles (similar to TAPS) •Peak Workforce: 3,500 - 5,000 people •Required Steel: 600,000 - 1,200,000 tons •State off-take: ~5 points, 300-350 million cubic feet per day, based on demand

Producing Fields •~35 TCF discovered North Slope resource •Additional exploration potential •Anchored by Prudhoe Bay and Pt. Thomson with ~20 years supply available

•Use of existing and new North Slope facilities •Confirmed range of gas blends from PBU/PTU can generate marketable LNG product

•Peak Workforce: 500 – 1,500 people

GO

LNG

Pro

ject

O

pera

tions

Execute: • Final engineering • Financing • Procurement • Fabricate / Logistics / Construct • Prepare for Operations

Complete Gov’t / Reg. Issues: • Secure remaining construction

/ operating permits • Stakeholder engagement Implement business structure & agreements

Commission / start-up

Alaska LNG – Work Plans / Key Decision Points

Evaluate: • Range of technically viable

options for major project components

• Business Structure • In-state gas / export LNG demand

Screen commercial viability

Viable Technical Option(s) Identified Government Support Permits / Land Use Achievable Potential Commercial Viability

Requirements to Take Next Step:

Progress: • Preliminary engineering to

refine concept • Business structure • Financing plan

Start individual gas / LNG sales / shipping efforts Assess commercial viability

Viable technical option Government Support Permits / Land Use Underway Potential Commercial Viability

Activ

ities

Complete: • Front-end engineering & design • Major contract preparation • Business structure • Financing arrangements

Solicit Interest of Others Advance Gov’t / Reg. Issues: • Key permit / land use approvals • Stakeholder engagement • Secure DOE Export License

Execute individual gas / LNG sales / shipping agreements Confirm commercial viability

Secure Permits / Land Use / Financing / Key Commercial Agreements

Confirm Commercial Viability Execute EPC contracts

Peak Staffing: ~300 400 - 500 500 – 1,500 9,000 – 15,000

Cost ($): Tens of Millions Hundreds of Millions Billions Tens of Billions

Est. Engineering / Technical Duration*: 12 - 18 Months 2 - 3 Years 5 - 6 Years

Concept Selection

Pre- FEED

FEED (Front-End

Engineering & Design)

EPC (Engineering,

Procurement & Construction)

Decision to Build the

Project Decision Decision

(Today)

PTU Settlement, Joint Work

Agreements

* NOTE: Duration of various phases may be extended by protracted resolution of fiscal terms, permitting and regulatory delays, legal challenges, changes in commodity market outlook, time to secure long-term LNG contracts, labor shortages, material & equipment availability, weather, etc.

GO GO GO

Solicit Interest of Others Establish Government Support and Advance Regulatory Issues:

• Competitive oil tax environment; predictable / durable LNG project fiscal terms; AGIA Issues

• Assure ability to secure regulatory approvals / permits / land use • Environmental activities / Technical data collection • Stakeholder engagement • File DOE Export License