ALBUQUERQUE TEAM MEETING November 7, 2001 Transwestern Pipeline Company Kim Watson Director Commercial Group

OVERVIEW 2001 Results 2002 Plan Market Environment Upside/Downside Projects Additional Focus Areas

2001 SUCCESSES $14.7 MM above Plan as of 3rd Current Estimate Subscribed 106,700/d of Red Rock Expansion Capacity (17.2 % ROE) All West & East mainline capacity, San Juan & Ignacio to Blanco capacity subscribed New Deal Structures: IT Pool to Pool at CA border (Reliant, Texaco) Index to Index deals (Sempra & Richardson) East to East sharing with alternate West (USGT & Astra)

2001 SUCCESSES (continued) Renewed Navajo R-O-W Renewed Laguna R-O-W Marketing capacity through Enron Online Connected 26,000/d of new supply New 200,000/d pipeline interconnect with Oneok Dashboard & Pipeline Profile systems

TRANSWESTERN COMMERCIAL GROUP 2002 OPERATING PLAN (Millions)

CAPACITY SUBSCRIPTION LEVEL (including Red Rock)

EXPANSIONS TO CALIFORNIA Filed With the FERC WA 200,000 MMBtu/d Southern Trails PGT Kern EPNG TWPL OR ID WY NV 1,010,000 MMBtu/d UT CO CA 120,000 MMBtu/d OK 120,000 MMBtu/d AZ NM 230,000 MMBtu/d TX

EXPANSIONS TO CALIFORNIA Project Status In-Service Volume TW Red Rock Certificate Issued June, 2002 120,000/d EPNG August, 2001 230,000/d PGT (Phase I) November, 2001 200,000/d Southern Trails July, 2002 Kern River May, 2002 125,000/d Filed with FERC May, 2003 885,000/d TW Sun Devil Announced January, 2004 330,000/d Sonoran (Phase I) Summer, 2003 750,000/d 320,000/d PGT November, 2003 400,000/d CIG Ruby December, 2003 TOTAL 4,230,000/d

NYMEX PRICES ($/MMBtu) $ 3.15 average $ 4.28 average

2002 BASIN & BORDER PRICES ($/MMBtu)

2002 BASIN TO BORDER SPREADS* ($/MMBtu) $ 0.27 average $ 0.14 average * Spreads are net of fuel.

POTENTIAL IMPACTS 2002 PLAN Upside Negotiated rate proceeding: $10MM SoCal rate dispute: $2.2MM Downside Red Rock in-service delay: $1.124MM Gas prices: $.4MM (per $.10 variance) Agave & Amoco options to reduce MAXDTQ: $1.3MM

LOAD FACTOR UPSIDE/DOWNSIDE (Millions) Revenue Load Factor* Difference 85% $202 90% $203 ($1.8) 92% $204 $ .7 95% $205 $1.7 92% load factor assumption 1,065,000/d average throughput with Red Rock outages excluded * Red Rock outages included

PROJECTS Red Rock Expansion Sun Devil Trans Pecos Southern Trails Caithness/Big Sandy PG&E Potential Opportunities

RED ROCK EXPANSION Incremental 120,000/d delivered to California & Arizona Additional hp at Stations 1, 2 & 3 1.210 Bcf/d total deliveries West Supplies from Permian & Anadarko In-service June, 2002 106,700/d subscribed, resulting in 17.2% ROE

SUN DEVIL $550 MM capital cost 450,000/d capacity to Phoenix Nevada Utah Colorado NNG California Kansas New Mexico Sun Devil Oklahoma TWPL Phoenix Arizona Texas $550 MM capital cost 450,000/d capacity to Phoenix 780,000/d Blanco to Thoreau on TW 330,000/d to CA border on TW

SUN DEVIL OPEN SEASON RESULTS Path San Juan to Thoreau Thoreau to CA Border Thoreau to Phoenix Total Bids Received 651,000/d 265,000/d 440,000/d

TRANS PECOS TW/KM LOI executed TP/Pemex LOI tendered: Nevada Utah Colorado NNG California Kansas New Mexico Oklahoma TWPL Arizona Texas TW/KM LOI executed TP/Pemex LOI tendered: 250,000/d @ $.2950/MMBtu Pemex counter-offer: 240,000/d @ $.25/MMBtu NGPL TransPecos

SOUTHERN TRAILS RFP to purchase West leg, due Oct 15th Nevada Utah Colorado NNG California Kansas Southern Trails New Mexico Oklahoma Arizona TWPL RFP to purchase West leg, due Oct 15th In-service 7/2002 “East” San Juan to CA border: 87,500 MMBtu/d “West” CA border to Long Beach: 120,000 MMBtu/d Texas

CAITHNESS/BIG SANDY Caithness will build 41 miles to TW Nevada Utah Colorado NNG California Kansas New Mexico Arizona Oklahoma TWPL Big Sandy Texas Caithness will build 41 miles to TW Interconnect cost to TW, $550 K 780 MW baseload generating plant Phase I: 520 MW, 90,000/d, Q4 2003 Phase II: 260 MW, 40,000/d, Q3 2004

PG&E POTENTIAL OPPORTUNITIES Bi-directional capability at PG&E/Topock interconnect 20 mile lateral to serve generation plants in Bakersfield area, incremental 300,000/d load

ADDITIONAL FOCUS AREAS EnronOnline Operator & Shipper Imbalances Electric Compression Agreements West Texas Lateral