Northern Border Pipeline Customer Meeting April 2nd & 3rd, 2014 Welcome Bill Fonda Northern Border Pipeline - Agenda Welcome Bill Fonda 8:00 – 8:15 a.m. System Overview & Projects Dick Shepherd 8:15 - 8:45 Fundamentals & Capacity Update Jeff Nielsen 8:45 – 9:15 Maintenance Update Paul Oliver 9:15 – 9:30 Break 9:30 – 9:45 Prestige Economics Jason Schenker 9:45 – 10:15 Update Dick Shepherd 10:15 – 10:30 3 Forward Looking Information This presentation may contain certain information that is forward-looking and is subject to important risks and uncertainties. The words "anticipate", "expect", "believe", "may", "should", "estimate", "project", "outlook", "forecast" or other similar words are used to identify such forward-looking information. Forward-looking statements in this presentation are intended to provide TransCanada security holders and potential investors with information regarding TransCanada and its subsidiaries, including management’s assessment of TransCanada’s and its subsidiaries’ future financial and operational plans and outlook. Forward-looking statements in this presentation may include, among others, statements regarding the anticipated business prospects, and financial performance of TransCanada and its subsidiaries, expectations or projections about the future, strategies and goals for growth and expansion, expected and future cash flows, costs, schedules (including anticipated construction and completion dates), operating and financial results, and expected impact of future commitments and contingent liabilities. All forward-looking statements reflect TransCanada's beliefs and assumptions based on information available at the time the statements were made. Actual results or events may differ from those predicted in these forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among others, the ability of TransCanada to successfully implement its strategic initiatives and whether such strategic initiatives will yield the expected benefits, the operating performance of the TransCanada’s pipeline and energy assets, the availability and price of energy commodities, capacity payments, regulatory processes and decisions, changes in environmental and other laws and regulations, competitive factors in the pipeline and energy sectors, construction and completion of capital projects, labour, equipment and material costs, access to capital markets, interest and currency exchange rates, technological developments and economic conditions in North America. By its nature, forward-looking information is subject to various risks and uncertainties, which could cause TransCanada's actual results and experience to differ materially from the anticipated results or expectations expressed. Additional information on these and other factors is available in the reports filed by TransCanada with Canadian securities regulators and with the U.S. Securities and Exchange Commission (SEC). Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date it is expressed in this presentation or otherwise, and not to use future- oriented information or financial outlooks for anything other than their intended purpose. TransCanada undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law. TransCanada Corporation (TSX/NYSE: TRP) One of North America’s Largest Natural Gas Pipeline Networks • Operating 68,500 km (42,500 mi) of pipeline • Average volume of 14 Bcf/d or 20% of continental demand North America’s 3rd Largest Natural Gas Storage Operator • 380 Bcf of capacity Canada’s Largest Private Sector Power Generator • 20 power plants, 10,900 MW • Diversified portfolio, including wind, hydro, nuclear, coal, solar and natural gas Premier North American Oil Pipeline System • 1.4 million Bbl/d ultimate capacity* * Keystone Wood River/Patoka and Cushing Extension sections in operation Gulf Coast pipeline project in development Keystone XL pipeline project in development Houston Lateral pipeline project in development U.S. Pipelines - Commercial U.S. Pipelines Commercial Leadership Dean Ferguson Sr. VP & General Manager U.S. Pipelines Todd Johnson Director U.S. Pipelines West Marketing & Business Development Dean Patry VP U.S. Pipelines Central Marketing & Business Development Liz Palacios Associate Joseph Pollard Director U.S. Pipelines CommercialServices Steven Jaskolski Director U.S. System Operations 6 U.S. Pipelines West U.S. Pipelines West Marketing & Business Development Todd Johnson Director U.S. Pipelines West Marketing & Business Development Northern Border Jeff Nielsen Manager Marketing Bill Fonda Manager Marketing Colin Strom Al Behrens Dick Shepherd Randy Hunter* Jim Schoene Jay Story David White Sharon Duthie Associate Paul Towne Manager Stragegy Jerry Breaux * Employee in Canada 7 Northern Border Pipeline Overview & Projects Dick Shepherd Overview & Projects • Northern Border • The Rockies • The Bakken 9 Northern Border Pipeline AECO Company Capacity Port of MorganVentura 2.4 Bcfd Rate Use Gas* Port of Morgan Capacity: 2,200 MMcf/d MT $0.2555 2.5 % ND NGPL Point Capacity 922 MMcf/d MT MN VenturaHarper 1.5 Bcfd SD $0.0482 0.5 % Ventura Chicago Harper- 987 Manhattan Mmcfd $0.0812 0.7 % NNG Point Capacity 2,200 MMcf/d IA Harper Manhattan IL Manhattan- 557 North Hayden Mmcfd Total $0.0115 $0.3964 0.1 % Rates Include Compressor Usage Surcharge *2013 Average Fuel 3.8% 10 North Hayden IN Northern Border - Growing U.S. Supply Name Port of Morgan Name Manning Kurtz Total Rockies WCSB Pipe FOOTHILLS ROCKIES Pipe WBI BISON BAKKEN & WILLISTON Name Pipe Mcf/d Saskana OMIMEX 60,000 Stateline WBI 180,000 Squaw Creek HILAND PART 95,000 Charbonneau WBI 60,000 Buford NNG 48,000 Spring Creek WBI 270,000 Watford City HESS 60,000 Stony TARGA 100,000 Glen Ullin WBI 100,000 Hay Butte CALIBER 50,000 Total Bakken & Williston 1,023,000 Mcf/d 2,192,500 Mcf/d 213,000 407,000 620,000 Name Hebron Troy Grove Channahon Des Plaines Total Other 11 OTHER Pipe DAKOTA GAS NICOR MIDWESTERN ANR Mcf/d 160,000 400,000 236,000 60,000 856,000 Evolving Receipt Point Supply Diversity 2003 1982 2014 18% 23% 46% 13% 2% 3% 62% 22% 100% Canadian Bakken/Williston Rockies Other 12 Northern Border - Major Markets Name Fraser Balaton Davis Lakota Rutland Windom Martin County Total End User End User Pipe VALERO MINNCORN HEARTLAND GLOBALETH BUFFALOLAK ETHANOL200 CHSINC Interstate Pipe (top 12) Name Pipe Ventura NNG Harper NGPL VECTOR Joliet Jackson Creek GUARDIAN Will County ANR Welcome NNG Channahon MIDWESTERN Glen Ullin WBI Grundy Ctr NNG Marshall NNG WBI Charbonneau Aberdeen NNG Total Interstate Pipe Mcf/d 21,200 20,000 15,000 15,000 14,000 10,000 9,600 104,800 Mcf/d 2,200,000 900,000 700,000 650,000 500,000 250,000 236,000 130,000 103,000 80,000 60,000 21,000 5,873,694 LDC Name Manhattan North Hayden Minooka Troy Grove Torrence Princeton Prophetstown Davenport Iowa City Trimont Brandt Warner Watertown Ackley Total LDC (top 15) Pipe INTEGRYS NIPSCO NICOR NICOR KM/INTEGRYS AMEREN CILCO INTERSTPOWER MIDAMERICAN MIDAMERICAN HUTCHINSON NWPUBLICSE NWPUBLICSE CITY WATERT CONSUMER ENE Mcf/d 600,000 545,000 400,000 400,000 360,000 120,000 120,000 100,000 100,000 60,000 38,000 24,000 22,000 20,000 3,554,570 13 Power Plant Name Pipe Mcf/d Elwood ELWOOD 420,000 St Anthony MON-DAK 200,000 Wilton Center LINCOLN GEN 190,000 Elm Creek GREAT RIVER 180,000 Yale INTERSTPOWER 130,000 Lonesome Creek BASIN ELEC 125,000 Deer Creek BASIN ELEC 95,000 Cordova MIDAMERICAN 53,000 Groton BASIN ELEC 46,000 Lanark BASIN ELEC 46,000 Total Power Plant 1,485,000 Evolving Delivery Point Diversity 2003 1982 2014 6% 13% 1% 1% 33% 53% 61% 100% Interstate Pipelines LDC's End-Users Power Plants 14 33% The Rockies Northern Border & Bison Pipelines POM Kurtz Buffalo Bison Pipeline • • • • • 302 miles 30-inch Capacity 407 MMcfd Max 1 Bcfd capacity 1440 psig MAOP Ventura Chicago 16 36” to Chicago 1050 MMcfd West Capacity NWP North 650 NWP South 360 Kern 2,145 Ruby 1,500 TransCo Total Rockies Export Capacity 435 5,090 650 1,800 1,500 850 400 East 435 360 REX Approximately 10.3 Bcfd 17 Capacity 1,800 Trailblazer 850 Bison 407 KMI 400 CIG 330 Chey Plains 950 South Star 180 WBI 265 Total 5,182 Rocky Mountain Production Forecast + ~3 Bcfd Forecast + ~3 Bcfd Rockies Export Capacity Sources: Wood Mackenzie 1st Q 2014 Internal Analysis 18 Basin The Bakken Northern Border’s Footprint in the Bakken Bakken Wells Spud through 2013 20 Northern Border’s Footprint in the Bakken Three Forks Wells Spud Through 2013 THREE FORKS Wells Spud through 2013 Bakken Well Permits by County/Year North Dakota 2013 Drilling Permits By County North Dakota Drilling Permits Issued Counties Within ~60 miles of Northrn Border County Billings Bottineau Bowman Burke Divide Dunn Golden Valley Hettinger McHenry McIntosh McKenzie McLean Mercer Mountrail Renville Slope Stark Ward Williams Total 2010 2011 2012 2013 28 56 10 63 101 241 5 0 0 0 332 12 0 427 11 2 42 1 336 1,667 49 26 3 99 129 306 7 2 0 0 505 20 1 338 13 1 52 2 376 1,929 58 42 4 58 179 454 16 1 1 0 785 9 0 381 8 1 80 2 473 2,552 43 56 9 61 175 388 23 0 0 4 874 0 0 537 19 3 58 42 386 2,678 Total 178 180 26 281 584 1,389 51 3 1 4 2,496 41 1 1,683 51 7 232 47 1,571 8,826 WITHIN ~60 MILES OF NBPL 22 Bakken Production Forecast - Gas Bakken Production – Wellhead Volume The Bakken Gas Balance Bakken Natural Gas Balance Typical Gas Flows Production (wet gas) Flared Gas (29%) Shrink Pecan Pipeline MMcfd 1,100 319 222 120 NBPL Interconnects Stateline Squaw Creek Charbonneau Buford Hay Butte (2ndQ 2014) Spring Creek Watford City Stony Manning (Grasslands) Hebron (Dakota Plant) Glen Ullin Kurtz (Bison) Total Bakken Max Typical Capacity Flows MMcfd 115 180 51 95 37 60 48 31 n/a 50 91 270 52 60 25 100 0 213 0 160 37 100 0 407 439 1,743 Stateline Squaw Creek Charbonneau Buford Hay Butte CS 4 Spring Creek Watford City Bakken Interconnect 24 Stony Bakken Flaring Bakken Flaring North Dakota Flaring is Widespread Across the Play Bakken Flaring Levels Gas Flared % Source: WoodMac Gas Flared by Volume Bakken Flaring Targets Bakken Production Forecast 2.0 bcfd 1.5 1.0 0.5 2013 2014 2015 Dry Gas Production 2016 2017 Flared Volumes Source: WoodMac 29 2018 2019 2020 Wellhead Production The Bakken Header The Bakken Header Bakken Wells Spud through 2013 Tioga Stanley 31 The Bakken Header The Bakken Header • North of Lake Sakakawea • 55 miles – Northern Border to Tioga • 400 MMcfd • 20” Pipe • +/- 20,000 HP • Fuel • Term 15 & 10 Years • Rate $.22/MMbtu to $.26/MMbtu • As early as Nov, 2016 In-Service 33 Fundamentals & Capacity Update Jeff Nielsen Fundamentals & Capacity Update • Short term fundamentals • Supply fundamentals • Market fundamentals • Capacity update • Park and Loan 35 Short Term Fundamentals Northern Border Pipeline Recent Transport Value Total Profit = $4.6 MM Source: Internal Analysis 37 Summer 2014 38 Alberta Storage: Summer – Winter Spread Is 5 cents enough to refill storage? Source: Internal Analysis 39 Storage Levels – Impact to Ventura Maximum Capacity High storage refill requirement Source: Internal Analysis 40 Storage Levels – Impact to Chicago Maximum Capacity High storage refill requirement Source: Internal Analysis 41 Additional Fundamental Questions • Will the increased LDC contracting on the TransCanada Mainline be utilized? • What will the NGTL system dynamics be? • What will the impact of Marcellus/Utica be to Midwest and West flows? 42 Supply Fundamentals Northern Border Supply Optionality Source: Internal Analysis 44 WCSB Production – Historic & Forecast Current Actual Production Source: Wood-Mac - 2014 45 Active WCSB Horizontal Gas Drilling Horn R Top 10 Horizontal Operators 2013 Well Count NE NW Muskwa, Klua, Evie Town - Farell Creek North Montney Duvernay Dawson Creek – Valhalla Colorado Shale South Montney “Deep Basin” SW Calgary SE WCSB Gas Supply Preliminary 2014 TransCanada Outlook 47 Forward Canadian Dispatch Source: Internal Analysis 48 Bakken Area Receipts Growth Tioga Plant Shut-In Freeze-offs Source: Internal Analysis 49 Market Fundamentals Premium Chicago Deliveries • Safe, reliable system • • 1 BCF of Delivery • HUB like flexibility • Interstate Deliveries LDC Deliveries • Ameren Illinois • NICOR • PGL&C • NIPSCO • Mid American Power Plants • ANR • Guardian • Elwood • Midwestern • Wilton Center • NGPL • Cordova • Vector • • 51 MAOP 1050 Deliveries to NNG and Chicago Area Source: LCI-Internal Analysis 52 Northern Border Chicago Rate Comparison Source: Internal Analysis 53 NBPL Ventura vs. NNG Demarc Source: Internal Analysis 54 Northern Border Capacity Capacity Under ROFR Capacity Under ROFR • PofM to Ventura • • April 2015 ~58 MMcfd • November 2015 ~473 MMcfd • PofM to Harper • April 2015 ~21 MMcfd • PofM to Chicago area • November 2014 ~14 MMcfd • April 2015 ~24 MMcfd • June 2015 ~21 MMcfd • July 2015 ~20 MMcfd • Nov 2015 ~38 MMcfd • December 2015 ~19 MMcfd PofM to Welcome • April 2015 ~10 MMcfd Unencumbered Capacity • PofM to Chicago area • Nov 2014 ~5 MMcfd • PofM to Harper • June 2014 ~42 MMcfd • June 2014 – March 2015 ~ 66 55 Park and Park and LoanLoan Park and Loan • Arbitrage Opportunities • Efficient AECO cash instruments • Intra-month Swing Swap • Marketing Opportunities • Intra-day Market or Supply • Weekend management 57 Northern Border Pipeline Maintenance Update Paul Oliver Significant Items During the 2013 - 2014 Winter Season • Winter 2013-14 weather was 18% colder than normal in Chicago, compared to 7% warmer than normal for winter 2012-13. • Northern Border’s transmission peak day occurred on January 27th with system deliveries of 3.0 Bcf. • Northern Border’s flows were at maximum capacity through Glen Ullin everyday in January and February. 59 Northern Border Winter Average Day System Flows 2,600,000 2,400,000 2,200,000 2,000,000 1,800,000 2,568,141 2,432,951 1,000,000 2,558,889 1,200,000 2,514,859 1,400,000 2,477,870 866,658 905,075 660,846 686,906 661,038 766,896 200,000 481,747 400,000 553,894 600,000 706,602 800,000 811,574 Dth/day 1,600,000 0 Nov 2013 Flow Past Glen Ullin Dec 2013 Flow Past Ventura Jan 2014 Feb 2014 Flow Past Harper Mar 2014 Capacity 60 Maintenance Schedule Summer 2014 • As has been done in the past, April and May have been reserved for major planned outages and capacity impacting events. • All gas fired compression will take a required, annual maintenance outage during April and May. One station will be taken offline at a time in order to minimize capacity impacts. 61 Maintenance Schedule April and May 2014 Pigging Operations Compressor Station 16 to 17 May Compressor Station 18 to 19 September 2014 Scheduled Spring Outages April Compressor Station 12 Spring Maint. 4/1 -4/2 Compressor Station 01 Spring Maint. 4/3 – 4/4 Compressor Station 18 Spring Maint. 4/3 – 4/4 Compressor Station 13 Spring Maint. 4/8 – 4/9 Compressor Station 04 Spring Maint. 4/10 – 4/11 Compressor Station 17 Spring Maint. 4/15 – 4/16 Compressor Station 07 Spring Maint. 4/17 – 4/18 Compressor Station 09 Spring Maint. 4/22 – 4/23 Compressor Station 03 Spring Maint. 4/24 – 4/25 Compressor Station 16 Spring Maint. 4/28 – 4/29 May Compressor Station 02 Spring Maint. 5/1 – 5/2 Compressor Station 11 Spring Maint. 5/6 – 5/7 Compressor Station 08 Spring Maint. 5/8 – 5/9 Compressor Station 05 Spring Maint. 5/13 – 5/14 Compressor Station 14 Spring Maint. 5/15 – 5/16 Compressor Station 06 Spring Maint. 5/20 – 5/21 62 Gas Control Paul Oliver, Manager Loren Charbonneau, Supervisor Michael Marx Steve Mike Vacant Gordon Michel Talley Rosner Ellington Position McDaniel If you are pleased with the service you are receiving, Gas Control would like to hear from you. Feel free to contact the gas controller on duty at 888-427-2875, option #4. 63 Other Contacts Northern Border Marketing Team Contacts: Jeff Nielsen (402) 492-7421 Colin Strom (402) 492-7419 Please contact the individuals above regarding any questions, concerns, or complaints. 64
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