Alaska Highway Natural Gas Policy Council Anchorage AK

Alaska Highway Natural Gas Policy Council Anchorage, AK May 24, 2001

About Williams n One of North America’s largest energy companies n Operations span energy value chain n Total assets exceeding $32 billion n $10+ billion in annual revenues n 90+ years of experience n 14, 000 employees worldwide 2

Williams’ Energy Assets Transco Texas Gas Central Kern River Northwest Alliance PL* Northern Border PL* Gulfstream PL* (certificated) Mid America PL Longhorn PL* (under construction) Seminole PL* Rio Grande PL* Discovery PL* Tri-States PL* Wilprise PL* West Texas PL* Ammonia PL Petroleum products PL Ethane Distribution System Trans Alaska PL* Generation • Existing Tolling Agreements Refineries Ethanol Plants Olefins Plant* Fractionator Gas Processing & Treatment Plants Petroleum Products Terminals NGL Storage NGL Gathering System Williams Travel. Centers Exploration and production Natural gas gathering Williams Express Stores Cove Point LNG Import Facility (partially operational) * partial ownership • includes existing facilities or those under construction 3

Williams in Alaska n 200, 000 bpd North Pole refinery n Anchorage Terminal storage capacity of n n n 730, 000 bbls Minority interest in TAPS Currently market Alaska’s royalty oil 500+ employees with annual payroll exceeding $21 million $340 million in fixed assets $12+ million in annual taxes paid 4

Marketing Capabilities State-of-the-Art Trading Facility n 81, 500 -square-foot trading facility n 722 energy professionals n 20+ Ph. Ds; 150+ Master’s degrees n Offer wide array of energy commodities, financial instruments and complex structured arrangements n $250 billion in transactions annually 5

EM&T Facts & Figures Innovative. Strong. Growing. Innovation n Introduced industry to power tolling n One of first to structure full requirements deal n Introduced first real-time energy news network, Energy. News. Live. com n Partnered with five other industry leaders in creating Trade. Sparksm Strength* n Power - 141, 300 GWh; Top 10 n Natural gas - 4. 3 Bcf/d; Top 15 n NGLs - 281, 000 bbl/d; #2 in North America n Crude and refined products - 728, 000 bbl/d n Industry leader in earnings quality ($. 133 EBIT/Bbtue) * 2000 volumes and rankings Growth n Record 2000 net revenues of $1. 6 B and EBIT of $1 B n $2. 2 MM in net revenues per employee in 2000 n 97% annual operating profit growth from 1996 -2000 n 108% annual asset growth from 1996 -2000 6

What We Believe Change Autonomy of Operating Units Efficiency Customers Integrity Investors Tolerance for Risk Employees Entrepreneurial Spirit Communities 7

Our View on This Project n Arctic gas is necessary to meet North American demand growth n Opportunities within Alaska must be analyzed n The Alaska Highway Route is the best way to move North Slope gas to market n The project would benefit greatly from participation by one or more strong pipeline companies 8

Arctic Gas Necessary to Meet N. A. Demand n 19 Bcf/d of demand growth by 2010 Current demand of 73 Bcf/d n Projected to reach 92 Bcf/d by 2010 n n 10 - 15 Bcf/d of conventional supply growth projected during same time period n Includes traditional L-48 and WCSB n Arctic Gas is needed to fill this hole 9

Opportunities Within Alaska n Williams initiating study of petrochemical opportunities within the State Dedicated staff n Results within 9 - 12 months n n Williams’ petrochemical experience and existing assets will allow us to uniquely add value to this project n We will share results with you 10

Our Petrochemical Experience n Major supplier of NGL feedstock to n n chemical companies in the U. S. (~80, 000 BPD) and Canada (110, 000+ BPD) 42% ownership of ethylene cracker in Louisiana Refinery grade propylene in Memphis Gulf Coast Off Gas project in Louisiana producing ethylene and propylene Off Gas project with polymer grade propylene in Alberta 11

Alaska Highway Route is Preferred n Most of the work has been done Can be in-service earlier than any other route n Will save several years of work n n Mackenzie Delta line can be built when supply is ready 12

Pipeline Participation is Important n Experience counts Managing long lead-time, capital intensive pipeline projects n Regulatory process is extremely lengthy and complex - we manage this process daily n Healthy working relationships must be formed with key stakeholders along the pipeline right-of-way n 13

Differentiation Alaska North Slope Gas Development n Involvement since 1970 s n Solid “hands-on” experience Project Director of Alaska portion of ANGTS - over 750 employees of and contractors managed by Williams at its peak n Selected Alaska Highway route & secured permits n Maintain key experience in the company n 14

Why Williams? n Industry leader in pipeline development and construction n Front-runner in technology implementation n Unparalleled operational expertise n One of North America’s largest and most strategically located natural gas and NGL infrastructures 15

Williams Gas Pipeline Ongoing Projects Georgia Strait Jackson Prairie Trenton Woodbury Independence Market. Link Cross Bay Power Projects NWP Displacement Sumas South Cove Point Power Projects S. VA Lateral Western Frontier Sundance Kern River Expansions Momentum Power Projects Gulfstream 16

What We Did with Kern River. . . n 900 -mile large diameter pipeline delivering Rockies gas to S. California n 7 years from inception to in-service n Successfully worked with numerous stakeholders to get it permitted & built n Currently transports over 700 mmcfd n Will expand by nearly 150% by 2003 n Demonstrates Williams’ proven commitment and experience 17

…and are Doing with Kern River Again. . . Rockies Basin Coyote Creek Muddy Creek Salt Lake Elberta Fillmore Dry Lake Goodsprings Veyo New Compressors Daggett Existing Compressors Looping 18

…and are Doing with Gulfstream. . . 19

…and are Doing with Cove Point. . . Dual-Berth Pier 1. 5 -mile underwater tunnel 4 - 1. 25 Bcf Storage Tanks New 2. 5 Bcf Storage Tank Re-gasification facilities Administration Building 87 -mile, 36” pipeline 20

…We Will Do with an Alaskan Pipeline n We understand the time commitment and requisite partnership mentality n Successful knowledge transfer and employee retention n Flexibility afforded by vast infrastructure, resources and capabilities n Sensitive to stakeholder desires and regulatory/political guidelines 21

What Williams is Doing n Establishing a dedicated team to pursue Arctic development n Will work with key stakeholders to determine optimal solutions for Arctic gas & liquids n Initiating a feasibility study on petrochemical development in Alaska 22

Leading Energy Solutions The financial strength and risk management skills of Williams, combined with our physical strength and operational expertise, are powerful resources. 23