Albertas Industrial Heartland Overview Industrial Railway Safety Conference

Alberta’s Industrial Heartland Overview Industrial Railway Safety Conference – April 28 th, 2015

Who We Are • A cooperative effort of five municipalities in and around Edmonton, Alberta, Canada. • A organization committed to sustainable development through economic development and planning. • A specialized region of over 582 km 2 zoned for heavy industrial development Our focus includes: • Identifying hydrocarbon processing business opportunities • Communicating with global investors • Assisting investors in site selection process • Acting as a liaison with industry and other levels of Government

15 29 billion barrels NGL Alberta’s PLAY rich in natural gas liquids 11 billion barrels NGL SOURCE: Alberta Energy Resource Conservation Board Alberta Geological Survey

Existing Natural Gas Pipelines

Alberta’s Industrial Heartland – Existing Industry • Canada’s largest hydrocarbon processing center home to 15 world scale facilities responsible for 43% of national basic chemical manufacturing • Major center for: – – – – Petroleum Refining (422 Mbdp capacity) Bitumen Upgrading (150 Mbdp expanding to 300 Mbpd capacity) Ethylene, MEG, polyethylene production Natural Gas Fractionation and Processing Fertilizer production Pipeline terminal and storage area A variety of other petrochemical and specialty products

Heartland Advantages – – – – Synergies with existing industry in the region Western Canada’s natural gas fractionation hub 2 Class 1 Rail Roads – CN and CP Developed and robust electrical grid Feedstock availability through pipeline access Underground – salt dome – storage capabilities Water availability and wastewater facilities Developed labour force

Historical Pricing Relationship

Pricing Differentials - AECO vs Henry Hub Price – April 24, 2015 YTD Average Price AECO Spot ($CAD/mcf) $2. 58 $2. 71 Henry Hub Spot ($CAD/mmbtu) $3. 10 $3. 52 Differential (H. Hub/Aeco) $0. 52 $0. 82 Natural Gas $0. 82 USD = $1. 00 CAD

Among the BEST Photo Credit: DOW operating performance in North America

Propane Pricing Differentials

Natural Gas Processing Mid Stream Growth Keyera Energy – De-ethanizer under construction – operational Q 3 2015 – Double C 3+ fractionation capacity to 65, 000 bpd – Q 1 2016 Plains Midstream Canada – Expansion of existing fractionation and storage facilities, including development of rail and truck terminals Pembina Pipeline – Doubling C 2+ fractionation capacity to 146, 000 bpd – operational Q 4 2015 – Construction of C 3+ fractionator with capcity of 55, 000 bpd – operational Q 3 2017

Announced Gas Based Projects • Williams PDH facility and derivatives plant – Convert propane to propylene – Regulatory information compiled and submitted last fall • Air Products Hydrogen Facility – Hydrogen production facility • ATCO Power generation project – Natural Gas power generation facility • NOVA Chemical Joffre Expansion – $1 billion expansion to Red Deer facility

Connected to Markets

AIHA - Rail Network Overview • Alberta’s Industrial Heartland is served by both Canadian “Class 1” railways – Canadian National and Canadian Pacific. • Both CN and CP view Alberta’s Industrial Heartland as a strategic area of growth, and continue to make capital investments in their infrastructure within the region and on rail routes that connect the region. • CN and CP are supported in the AIH by transload operations who handle truck to rail, or pipe to rail loading facilities.

Rail Access to Markets • CN operates the largest rail network in Canada and the only coast to coast transcontinental network in north America. • Network spans Canada and mid-America from the Atlantic to Pacific oceans to Gulf of Mexico • Serves Prince Rupert and Vancouver on west coast – Halifax on east coast, and New Orleans and Mobile, Alabama on US Gulf coast. CP also serves Montreal, Vancouver, and with US connections has excellent access to Washington state ports. Both CN and CP have connections with all five US class 1 railroads – ensuring access to virtually anywhere on the north American rail network – including Mexico.

Note: Estimated SIA carloads for 2013 represent additional 100, 000 carloads/annum. Photo ©S. I. Smith 2012

Note: Estimated SIA carloads for 2020 represent additional 218, 000 carloads/annum. Photo ©S. I. Smith 2013

Alberta’s PETROCHEMICAL PLAY – defining the best fit IHS Consulting’s robust analysis aligns industry factors with Alberta attributes Results reflect weighted rankings of the following: Derivative Market Outlook (40%) Feedstock (25%) Operations (15%) Value Chain (10%) Technology (5%)

Investment Opportunity Analysis 23

Cost Competitiveness – AIH vs. Gulf Coast Study Profitability of Petrochemical Plants in Alberta’s Industrial Heartland vs. . Gulf Coast Completed by: Stantec Consulting LTD Scenario Comparing the relevant life cycle costs of a 300 Mgal/day Lurgi-process methanol plant sited in three locations Complete Study: www. industrialheartland. com/investors

Cost Competitiveness – AIH vs. Gulf Coast Alberta’s Industrial Heartland NPV $844 $931 IRR 18. 4% 17. 6% Key Drivers - Tax Regime (+ $312 million) Price of natural gas (+ $118 million/year) Capital costs (- $50 million) Distribution costs (- $150 million)

Cumulative NPV – AIH vs. Gulf Coast $1 500 $1 000 NPV (US$ MM) $500 $0 Aberta Industrial Heartland - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Gulf Coast ($500) ($1 000) ($1 500) RMWB

$12. 5 billion underway 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. North West Redwater Partnership – Bitumen Refinery Williams Energy – Off-Gas pipeline and Fractionization – Propylene PDH facility Pembina Pipelines – NGL fractionization expansion – Heartland Hub logistic Center Sasol – Gas to Liquids facility Keyera – Fractionization Capacity Expansion Plains Mid Stream – Debottlenecking fractionator – Rail Capacity Expansion Carbon Capture and Storage Projects – Shell Quest – Enhance Energy ATCO co-gen facility ATCO Power Air Products $11. 5 billion pending $8. 5 billion $500 million $1. 5 billion $600 million $200 million $ 8 billion (est) $330 million $600 million $2. 5 billion $200 million $850 million $300 million

Contact Us Garret Matteotti Manager, Business Development garret@industrialheartland. com www. industrialheartland. com