April 2014 Issue 85

Winter Operations................................................................................ 1

Capacity Constraint Map ...................................................................... 2

TransGas Storage Update .................................................................... 3

Open Season ....................................................................................... 3

Plant Integrity ..................................................................................... 4

Alberta Receipt Capacity Update ........................................................... 5

TransGas 2014 Rate Review Process ..................................................... 5

Bayhurst to Rosetown Pipeline ............................................................. 6

Sharing Our Energy ............................................................................. 7

Community Volunteerism ..................................................................... 8

Winter Operations The 2013/14 Winter has gone down in the record books as one of the coldest winters in the last 30 years, with the Saskatchewan heating load demand over the past winter corresponding to a 1 in 26 colder. The provinces’ industrial demand was also up from the previous winter, with the normalized overall demand at approximately 8 per cent or 4 PJ greater than 2012/13 winter. In conjunction with the greater overall delivery requirements, there were intermittent Alberta interruptible supply restrictions throughout the winter, reducing the TransGas on-system supply by approximately 2 PJ. The combination of cold weather, high industrial demand and lower than forecast Alberta supply resulted in higher than forecast north system cavern withdrawals. Ultimately, an interruptible north System delivery restriction was put in place on January 6, 2014 to manage the storage cavern withdrawals and maintain inventories at sustainable levels. Proactive Customer efforts to reduce delivery demands, and periods of milder weather in

mid-January, allowed a recovery in storage cavern inventories and the restriction was removed January 27, 2014. However, early February gas spot pricing of up to $38/GJ, again created an unsustainable cavern withdrawal requirement, resulting in an export restriction on February 7 and a province-wide interruptible intra delivery restriction on February 24. Through a combination of customer and TransGas efforts to manage deliveries and increase supply, TransGas was able to exit the winter with no firm delivery curtailments, while cycling a record 39 PJ of storage. TransGas wishes to thank customers that responded diligently to assist us in managing the operational impacts associated with the severe 2013/14 winter. TransGas is actively working to have a variety of facility and third party transport measures in place prior to November 1, to ensure that customer expectations for capacity and service reliability will be met during 2014/15 winter operation.

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The Capacity Constrained Areas and Queues Map provides customers with the areas on the TransGas pipeline system that are currently under constraint. The Queue amount for each area is listed in the Capacity Constraint Map which will be updated on a regular basis. The map can be found on the TransGas website at the following link: http://www.transgas.com/infopostings/capacityconstraintmap.asp The current Constraint Map is shown below:

Capacity Constraint Map

TransGas

Regina

Melville

Moosomin

Weyburn

Estevan

ChaplinSuccess

Swift Current

Piapot

Hatton

Bayhurst

Coleville

Landis

Unity

Beacon Hill

Asquith

Saskatoon

Melfort

St. Louis

Prud’homme

Prince

Albert

Yorkton

Rosetown

North

Battleford

Loreburn

WBI

SVGC

Alliance

TCPLApache

Foothills

Brada

South

Bayhurst

Tantallon

High Utilization & Queued Areas at April 30, 2014

Empress Receipts

Queue Established

TCPL COMPRESSOR STATION

FOOTHILLS PIPELINE LTD QUEUED BOUNDARY

APACHE PIPELINES FULLY CONTRACTED (DELIVERIES)

ALLIANCE PIPELINES LTD +90% CONTRACT CAPACITY (DELIVERIES)

MIPL(C)L FULLY CONTRACTED (RECEIPTS)

TRANSGAS STORAGE NEAR CAPACITY(RECEIPTS)

Lanigan & Saskatoon Area

Deliveries

+90% Capacity

SE Sask. Receipts

81% Contracted Capacity

(91% including IT)

Alberta NIT to TEP Receipts

Queue Established

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www.transgas.com

TransGas Storage Update As of April 15, TransGas storage customers have a total inventory in storage of 7 PJ, which is 17 per cent of full based on the 2014/15 storage year contracted firm storage of 41.5 PJ. At May 1, 2014 total contract storage shedding of 8.1 PJ has occurred, including 4.6 PJ of firm storage, and 3.5 PJ of summer use storage. The total TransGas storage customer net with-drawal for the 2013/14 winter season (November 1 to March 31) of 39 PJ is a record amount for winter season withdrawal. In addition, for the period April 1 to 15,

an incremental net production of 1.4 PJ occurred. The net withdrawal during the 2013/14 winter season was 28 per cent greater than prior winters record net withdrawal. The previous highest net TransGas storage withdrawal amounts during a winter season occurred during the 1995/96 and 2010/11 winters, both having a net withdrawal of 30 PJ. The TransGas storage customer net injection requirement to fill contracted storage as of April 16 is 34.5 PJ.

TransGas' Fuel and Unaccounted for Gas assessment is calculated prior to the beginning of the Transport month and is applicable to all Receipt Transportation Services on the TransGas system moving gas from a Point of Receipt to the TransGas Energy Pool. After 18 months of nil fuel gas charge, TransGas’ monthly assessment of unaccounted for gas has been decreasing and we are now at a point where the fuel rate is required. Details can be found on the TransGas website under Services – TransGas Tariff – Rates and Charges, as well as the determination of the Fuel and Unaccounted for Gas rates using the following links: http://www.transgas.com/infopostings/monthlyfuelrates/monthlyfuelrateinq.aspx http://www.transgas.com/tariff/tgtariff/RatesAndCharges/Rates&Charges.pdf If you have any questions related to Fuel and Unaccounted for Gas, please contact Tanya Lang (306) 777-9811 or your Key Account Manager.

DID YOU KNOW . . .

Open Season A non binding open season for Northern Saskatchewan was open from March 14, 2014 to April 7, 2014 to understand future natural gas demand in Northern Saskatchewan.

Thanks for those customers that responded. The information provided will be used to determine pipelines and infrastructure to meet growing demands in Northern Saskatchewan.

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Plant Integrity Many threats to the integrity of our pipeline system are time-sensitive and only increase as time goes on. With this in mind, the Plant Integrity group of System Integrity and standards has a budget of $2 million in 2014 to lessen these threats through prevention, detection, and mitigation measures. The Plant Integrity group is specifically responsible for maintaining the safety and reliability of pressure vessels and associated piping systems installed at compressor stations and at various locations throughout the transmission and gathering pipeline network. With the beginning of a new year comes the rollout of the Plant Integrity group’s annual Detection Program plan, which continues to focus on threat management and will see approximately 171 facilities inspected in 2014. Plant Integrity expects to fully align with industry best practices by establishing a rotation of ten-year interval inspections for pressure vessels, buried piping circuits and above-ground piping circuits by 2017.

Meanwhile, Plant Integrity’s multi-year program for the life extension of buried piping at compressor stations continues to be the primary focus of the Mitigation Program. In 2014, eleven piping circuits at three compressor stations (for a combined length of 475 meters) will be inspected to confirm the piping is suitable for continued operation, before a high integrity coating is applied. In addition to these inspections, a multi-year program to develop a set of key mechanical drawings for each compressor station is under-way. A considerable amount of effort is required at each site to consolidate various records and versions of drawings. The final product at each site will provide valuable information to assist in planning integrity management activities and potential facility modifications. It will also support the corporate Process Safety initiative by identifying opportunities to improve the over-pressure protection measures for pipelines and station piping systems. The plan for 2014 is to complete work previously started for Coleville and Success and to develop a set of drawings for Unity.

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www.transgas.com

Based on input received through the Customer Dialogue process, TransGas has engaged the services of Drazen Consulting Group Inc. (DCGI) to assist in a review intended to generate information and ideas that will provide the basis for any steps to improve the TransGas rate structure; which will enhance the fairness, stability, efficiency and effectiveness. DCGI’s review will include: An analysis of existing TransGas Cost of

Service and corresponding study results; A review of the existing TransGas rate

design, including rate classes and toll structures;

A review of the existing TransGas service attributes, including Receipt, Delivery, Export, TransGas Energy Pool (TEP) ;

Storage offerings; and Other general items to be discussed.

DCGI will begin working with TransGas Policies, Rates and Regulations personnel on the TransGas Rate review starting in April 2014. Review findings will be presented to a Customer Dialogue Sub-committee group, comprised of representatives from Crescent Point Resources Partnership, France Financial Consulting/SIECA, Husky Energy Inc., and SaskPower in June 2014. Once input has been received from the Sub-committee group, the rate review findings will be presented to TransGas Customer Dialogue at the September 2014 meeting with the intention of finalizing any recommended changes by year-end.

DID YOU KNOW . . .

The ACR charge to be recovered from customers utilizing the NIT to TEP Receipt Service effective April 1, 2014 is being increased from January 2014. Information related to the current ACR charge in effect on January 1, 2014 and historical ACR charges can also be found on the TransGas website under Services.

TransGas 2014 Rate Review Process

Alberta Receipt Capacity Update TransGas Alberta major interconnect receipts averaged 265 TJ/d during March, which compares to record average day receipts of 320 TJ/d during the month of September 2013. The Alberta major interconnect capacity utilization was 66 per cent during the month of March. The current total TransGas Alberta Interconnect receipt capacity is approximately 400 TJ/d.

As of April 1, 2014, the total firm NGTL (Alberta system) contracted by TransGas is 278 TJ/d, matching NIT to TEP service firm contracts. The contracted NGTL system capacity increases to 323 TJ/d effective January 1, 2015.

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The NPS 16 Bayhurst to Rosetown project is progressing as planned and is on budget and on schedule for a November 1, 2014 in-service date. An important milestone was met with the issuing and award of a RFP (Request for Proposals) for the primary construction contract, which was awarded to M&N Construction of Cochrane Alberta. The remaining design work and third party approvals are progressing well. It is expected that construction will start by May 1

pending weather and ground conditions.

The early start time on this project allowed for 10 months of land easement negotiations and, as such, reduced the number of expropriations on a project of this size. Final project length is now 133 kilometres. In February, Ministry of Environment approval was received and final permits are now being gathered and are not expected to impact the schedule. TransGas will be taking initiatives to

protect migratory birds that may nest in the selected areas. Also, field studies and remaining heritage studies will be conducted as soon as the snow is gone. Three First Nations (Poundmaker, Little Pine and Red Pheasant) are being engaged on the project. The remaining materials for the above ground structures will be arriving over the next few weeks and the fabrication of block valve assemblies will then be completed. The x-ray, weld mapping and inspection contracts for this project were awarded and final mobilization plans are being made. Some modifications and improvements at the compressor station connections will be made to accommodate new desired mode of operations after learnings gathered from the extreme weather experience this past winter.

Bayhurst to Rosetown Pipeline

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www.transgas.com

TransGas/SaskEnergy employees shared the warmth this winter when they provided a helping hand in a situation that saw thousands of Manitoba residents without heat. On January 25, TransCanada Pipelines Limited (TCPL) experienced a transmission line rupture and fire at a facility south of Winnipeg. The ruptured line provided gas service to a number of communities in southern Manitoba, and left approximately 4,000 Manitoba Hydro customers without heat. SaskEnergy offered its Compressed Natural Gas (CNG) cascade trailer to Manitoba Hydro, and a crew of employees headed to Weyburn to get the trailer filled before it headed to Manitoba. However, the crew only made it to Lang before having to turn back to Regina due to poor weather. An emergency standby crew was then dispatched to Manitoba on the morning of Sunday, January 26. After filling the cascade trailer up at SaskEnergy’s high capacity CNG fueling station in Weyburn, the standby crew started the journey to Ste. Agathe, Manitoba, a town about 40 kilometres south of Winnipeg that was without heat.

On the way to Ste. Agathe, bad weather again reared its ugly head and the team was stopped at Portage La Prairie because Highway 1 had been shut down. However, the crew was able to get in touch with an RCMP officer. They explained their situation and were able to get an RCMP escort down another highway that was not barricaded. Upon arrival in Ste. Agathe, the team connected the cascade trailer to one of Manitoba Hydro’s regulator stations so that gas could be supplied to the town. The crew also monitored the pressure and opened and closed the tanks on the trailer as they were emptied. By Tuesday morning the station at Ste. Agathe was receiving gas again, after TCPL fixed the ruptured line. The station was monitored to ensure that the pressure was holding, and once it was determined that things were operating properly and safely, the crew disconnected the cascade trailer and headed home. Thanks to the efforts of our team, the people of Ste. Agathe were able to stay warm throughout the frigid temperatures. To all the employees that assisted in this situation — thank you for sharing our energy!

Sharing Our Energy

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Community Volunteerism As children we were all taught not to play with our food, but a group of SaskEnergy/TransGas employees have disregarded that lesson for a second consecutive year. Not only was it done in style, but in support of the Regina District Food Bank as a participant of CANstruction. The title of this year’s TransGas CANstruction build was “The Olympic Fight Against Hunger,” and was constructed on February 24 at Regina's Cornwall Centre using an astounding 4,200 cans of food of which 1,200 alone were tuna! Each team had from 8:00 a.m. to 8:00 p.m. to complete their structure and it could be no higher than eight feet tall. There were also strict rules about what is able to be used for structural supports. “The structure expresses the dedication of the volunteers and benefactors coming together to fight hunger within our community,” the team wrote in a group statement about their creation. “The Olympic Games last only three weeks, but the spirit of the Olympics burn

eternal within every athlete’s dreams of future Olympics. The Olympic flame burns brightly within all of us, as does Regina’s fight against hunger. As athletes train rigorously for the games, so shall our participants and volunteers persevere to collect food to help our community wipe out hunger and achieve gold in a harmonious community.” The public was able to vote for their favourite structure on the Regina District Food Bank’s Facebook page, and the SaskEnergy/TransGas structure received an honorable mention. This year’s participants were Sherrice Lee, Kent Schoenroth, Derrick Mann, Laine Mann, Shelley Baker, Maureen Turlock, Sandy Robinson, Leslie Toppings, Chad Bachynski, Lana Nation, Karen Cyr, Cindy Dmyterko, Dan Powaschuk, and Kim Brogden. Thank you to Biddell Gas Compression, Corpro, and Rosen for providing the food used in this year’s CANstruction challenge.