1. 2003 Natural Gas Market Needs Ziff Conference October 29, 2002 Steve Becker Vice President, Gas Strategy

2. Power TransmissionTransmission

3. 3 Start of a New Era 1. Replacing Market Services how will industry rebundle services? 2. Expiring Pipeline Contracts who will be the shippers? 3. Developing Arctic Gas will capital decisions on Arctic pipelines occur in this next era?

4. 4 Start of a New Era

5. 5 Replacing Missing Middlemen Pricing transparency liquidity financial derivatives Aggregation role as shippers on pipelines Geographic arbitrage between pipeline interconnects Increased utilization of existing facilities Industry participants need to rebundle services to replicate efficiencies of the past decade Services provided:

6. 6 Rebundling Services: Regional Hubs will Emerge NIT DAWN Supply area to include WCSB Eastern market hub Amalgamate pipeline interconnect points and create more price liquidity CHICAGO Western market hub

7. 7 Pipeline Export Contract Profile Annual contracts: variable cost netbacks, vibrant secondary market Daily contracts: full cost netbacks, no secondary market Annual or Daily Contracts?

8. 8 Arctic Gas Key Decision Milestones Discovered Undiscovered Unconventional Northern Pipeline Capacity * Capital decision for 2010 * Capital decision for 2008 Capital decisions on pipelines and success rates in WCSB will drive exploration activity

9. 9 Arctic Gas - 4 Integrated Projects Arctic National Wildlife Reserve Yukon Flats Wildlife Reserve Ivvavik National Park Mackenzie Delta ALASKA YUKON NORTHWEST TERRITORIES MANITOBA SASKATCHEWAN ALBERTA BRITISH COLUMBIA WASHINGTON IDAHO MONTANA NORTH DAKOTA Inuvik Prudhoe Bay Boundary Lake Alberta/NWT NUNAVUT Kingsgate Monchy Northern Gas Reserves Mackenzie Valley Project Alaska Highway Project Alaska Portion Yukon / B.C. Alberta / Existing System U.S. Pipelines Alberta to Chicago Integration provides flexibility and staging to meet market timing

10. 10 Summary Industry landscape has changed We are entering a new era TransCanada is consulting with producers, marketers and end users Together, we will define and provide solutions for this new era