Energy markets and TSX Group The 2004 Energy Roundtable Richard Nesbitt President, TSX Markets September 2004

2 TSX Group is an operator of marketplaces 45% Canada’s equity markets Global leader in mining & natural resources Over 150 years of history Canada’s leading e- fixed income market Since 2002 Leading North American energy exchange (gas & electricity) Founded in 1994; part of TSX Group since 2004

3 Electronic energy trading is growing Total CAGR : 32% Source: Accenture (2002/2003); NGX Nat. gas CAGR: 15% $US B Estimated value of global online energy trading to

4 Natural gas markets are continental US & Canadian Gas Supply LNG Alaska McKenzie Delta Non-Arctic Canada Rockies Gulf of Mexico DeepwaterGulf of Mexico Shelf Other Lower 48° 1 1% CAGR 2% CAGR Net imports Production Source: U.S. Petroleum Council; EU 1

5 Canada produces approximately 25% of North America’s gas North American natural gas production by region, Q402 and Q403 Source: National Energy Board (Canada) WCSB SOEP MIDWEST 1.3 APPALACHIANS 1.3 ROCKIES ANADARKO SAN JUAN PERMIAN 4.5 CALIFORNIA GULF (On) GULF (Off) LNG imports 02 vs Q02: 68.1 Bcf/d 4Q03: 68.9 Bcf/d Total Supply

6 NGX operates a unique integrated trading and clearing platform Trading Electronic limit order book Voice facilitation Clearing Central Counter Party to all NGX-matched trades Also clears OTC-matched trades Data View only Indices ServicesMarkets Spot, forwards and swaps contracts in natural gas and electricity All major hubs in Canada Select US hubs Customers Established global energy participants Financial participants Hedge funds

7 Successful growth will build around trends  Strong growth forecast in global energy supply and demand  Continuing/increasing need to manage volatility  Continuing influx of financial speculators and capital – particularly hedge funds  Advent of Liquid Natural Gas  Evolution of power market politics  Increasing standardization of non-gas commodities  Development of new energy sources