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TAPS 2013 Overview

Presentation to

32nd USAEE/IAEE North American Conference

July 29, 2013

Tom Barrett, President

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Abundant resources

OFFSHORE ARCTIC o27 bbo o132 tcf gasoEst. 54,000 jobs (nationwide)

COOK INLETo599 mbo o19 tcf gas

ANWR o10 bb0 o3.5 tcf gas

NPR-A o896 mbo o53 tcf gas

ONSHORE NORTH SLOPE oConventional: 5 bbo, 35 tcf gas; oHeavy/Viscous: 24-33 bbo; oUnconventional: 2 bbo,12 tcf gas

mbo = million barrels of oil bbo = billion barrels of oil tcf = trillion cubic feet

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TAPS background

• Designed as hot pipeline in an arctic environment

• 48-inch diameter• 800 miles long

– 420 miles above ground, 380 miles below ground

• Overcame operational challenges– Remote locations– Permafrost– Large river crossings– Extreme weather– Three mountain ranges– Seismically active regions

(safely withstood 7.9 earthquake in 2002)

0

500

1000

1500

2000

year1980

19841988

19921996

20002004

20082012

20162020

20242028

Actual Trend

Steadily declining throughput

201432° F with 18 Day

Transit fromPrudhoe Bay

To VMT

1988100° F+ with 4 Day

Transit from Prudhoe Bay

to VMT

Issues & urgency

– Water dropout

– Ice formation

– Wax deposition

– Frost heaves

– Snow accumulation

Greatest economic threatsto Alaska

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• AOGA: 1/3 of all Alaska's jobs, about 110,000, are attributed to the oil and gas industry.

• Fuels 1/3 of Alaska’s economy.• 95% of Alaska’s general fund

revenues.• Annual tax payments to

municipalities throughout Alaska.• Permanent Fund.• Continued production decline.

TAPS economic impacts

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Cold weather operations

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Warm weather operations

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Strong safety culture

The target: flawless operations, nobody gets hurt

• Incident and hazard reporting

• Proven safety tools and processes

• Anyone can stop work

• “Speak up, step up”

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Integrity Management Program

• Digs & inspections• Cleaning pigs

• In-line Inspection tool• Above-ground piping

$75-$100M per year in ongoing maintenance and integrity programs.

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TAPS scraper pigs

Low throughput leads to greater wax, slower pig velocities. Ongoing adjustment of pig design and protocol.

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2013 ILI “smart pig” run

2013 “smart pig” run launched on March 15. Low flow challenges addressed: wax build up, slack line, slow velocity.

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Committed to conservation

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Commitment to environment

SERVS

• Ship Escort/Response Vessel System (SERVS)

• Tanker escorts, spill prevention and response

• World-class• Fleet includes enhanced tractor

tugs, barges and work boats• 300+ privately owned vessels

contracted to assist in an incident • Dozens of drills/exercises

annually

99.8 % reliability delivered for the State of Alaska

Determination, ingenuity, partnership