Questar Pipeline Current Capacity and Development Shelley A

Questar Pipeline Current Capacity and Development Shelley A. Wright Director, Business Development May 15, 2007 Wyoming Pipeline Authority Meeting 1

Agenda • Questar Pipeline Overview • Basin Projections for Production vs. Pipeline Capacity • Pipeline Expansion Projects • Case Study – Southern System Expansion II – Finding Resources – Paying for Pipeline Projects – Covering the Costs • Storage Update • Summary 2

Questar Pipeline System Map 3

MDth/day Questar Pipeline Transportation Consolidated Contract Demand 4

Rockies Producing Basins UTAH WYOMING PINEDALE / JONAH GREATER GREEN RIVER BASIN COLORADO UNITA BASIN UINTA BASIN Questar Pipeline Other Pipelines Producing Basins PICEANCE BASIN 5

Production vs. Pipeline Capacity GREATER GREEN RIVER BASIN WYOMING UTAH Production is forecast to exceed pipeline capacity in our core basins. GREEN RIVER BASIN COLORADO UINTA BASIN Questar Pipeline Other Pipelines Producing Basins UINTA BASIN PICEANCE BASIN 6 PICEANCE BASIN

Rockies Producers Are Seeking To Expand Export Capacity Northwest Opal Hub Goshen California r tte u Cheyenne ms a Cheyenne W Hub Midwest Meeker Greasewood. Mid. Continent Northeast Ohio Valley East Louisiana 7

Expansion Projects • Overthrust Pipeline Expansions – Opal – Wamsutter • Southern System Expansions to Greasewood and Meeker – Fidlar to Greasewood/Meeker – Divide Creek to Greasewood/Meeker • Southern System Expansion II 8

Overthrust Pipeline Expansions Overthrust Pipeline Questar Pipeline Other Pipelines Utah Wyoming 9

Overthrust Pipeline Expansion to Opal • Up to 500, 000 Dth/d of capacity to Opal (West deliveries) – New 27. 1 mile pipeline extension to Opal – Deliveries to Kern River at Opal • 300, 000 Dth/d capacity subscribed • January 1, 2007 in-service date • No fuel charge, lost and unaccounted for only 10

Opal Project 11

Opal Project 12

Overthrust Pipeline Expansion to Wamsutter • Capacity of 750, 000 Dth/d -fully subscribed • 77. 3 mile extension from Kanda to Wamsutter – Two new compressor stations at Roberson Creek and Kanda • Deliveries to Rockies Express and WIC • New receipt points: Williams Opal Plant, Enterprise. TEPPCO Pioneer Plant and QGM Blacks Fork Plant • January 1, 2008 in-service date • Fuel rate anticipated to be less than 1% (high load factor) • FERC Notice to Proceed received 5/10/07 13

Expansions to Greasewood/Meeker Hub REX WIC Questar Pipeline Other Pipelines Fidlar Compressor Meeker Delivery Greasewood Delivery 2 DIVIDE CREEK TO GREASEWOOD In Service: 11/1/09 Volume: 200 MDth/d Distance: 37 miles 1 2 Sand Springs Delivery 1 BONANZA TO GREASEWOOD/MEEKER Divide Creek Receipt In Service: 11/1/09 Volume: Up to 540 MDth/d Distance: 60 miles 14

Potential Expansion for Deliveries to Greasewood/Meeker Hub • Potential expansion to provide deliveries of up to 540, 000 Dth/d • Receipt points at Fidlar Station (Uinta Basin) • Delivery to Greasewood/Meeker hub to Rockies Express, WIC and Trans. Colorado • Approximately 60 miles of 24 -inch diameter pipeline from Bonanza to Greasewood/Meeker for large volume requirements • Various volume options have been evaluated • Proposed in-service date November 1, 2009 15

Deliveries to Greasewood/Meeker- continued • Initial project is minor line looping and compression: – Compression at Greasewood – High pressure Interconnection with REX at Meeker – New hub pipeline between Greasewood and Meeker • Capacity of 50, 000 Dth/d available on a first-come, first-served basis. QPC currently negotiating with several parties • Maximum rate and 15 -year term required to acquire capacity • Delivery to Greasewood/Meeker hub to Rockies Express, Trans. Colorado, and possibly WIC • Proposed in-service date November 1, 2008 16

Divide Creek to Greasewood/Meeker • Expansion of 200, 000 Dth/d from Piceance Area to Greasewood • Receipt points: – Divide Creek - 100, 000 Dth/d – Clough/Rulison - 100, 000 Dth/d • New facilities include 37 miles of 24 -inch diameter pipe and compression • Target November 1, 2009 in-service date • Smaller project of 25, 000 Dth/d expansion recently subscribed. Can be provided with compression by 11/1/08. • Additional processing at Greasewood allows increased volumes from the Divide Creek Area 17

Case Study: Southern System Expansion II Goshen Delivery Southern System Expansion II In Service: 11/1/07 Volume: 175 MDth/d Distance: 59 miles Fidlar Compressor Payson Delivery Questar Pipeline Other Pipelines Blind Canyon Compressor ML 104 Loop ML 104 Ext Thistle Compressor Price Oak Springs Compressor 18

Case Study: SSXP II Project Description • Construct 59 miles of 24 -inch diameter pipe in Carbon, Duchesne and Uintah Counties, Utah – ML 104 Ext – 53. 9 miles east from Soldier Creek to Green River BV on ML 40 – ML 104 Loop - 4. 7 miles between Fausett Junction and Oak Spring Interstage – 53% BLM, 43% Private, and 4% State – 15 landowners • No new compressor stations – modifications at existing Oak Springs and Blind Canyon stations • FERC 7(c) application filed on November 21, 2006 • Anticipated Start of Construction: May 1, 2007 • In-service date: November 1, 2007 • Estimated capital cost: $108 Million, a 49% increase from $73 Million estimate in March 2006 19

Case Study: SSXP II Proposed Route 20

Black Diamond Slope in Water Canyon (SSXP II) • One of the steepest slopes on the QPC system. • Drop is over 900 ft. • Average Slope is almost 30%. 21

Backside of a Slope in Water Canyon (SSPX II) 22

Case Study: Finding Resources for Expansions—SSXP II • Pipeline contractors – Had to do two job showings – Evaluated 30 contractors – 13 contractors reviewed the job – Only 3 provided bids/proposals – Contractor concerns • Lack of resources (manpower and equipment) • Difficult terrain • Materials – 24 inch pipe has a lead time of 9 to 12 months – 24 inch valves have a lead time of at least 6 months 23

Case Study: Paying for Expansions—SSXP II • 49% increase in Capital cost: – $73 Million (March 2006 Estimate) • Pipeline construction contractor costs based on $87 / ft (Almost 1½ times the SSXP I contractor costs which was constructed Fall 2005. ) – $108 Million (November 2006 Estimate) • Pipeline construction contractor costs based on $190 / ft (Almost 3½ times the SSXP I contractor costs. ) 24

Case Study: Covering the Costs—SSXP II • Need for longer term contracts (15 years) • Increased rates (SSXP I and SSXP II are priced at $0. 26/Dth/day vs. system maximum of $0. 18) • Expectations of delays in completion due to many factors including but not limited to: regulatory delay, environmental issues, backorder or unavailability of parts, skilled labor going to easier projects, etc. 25

Storage Update At Clay Basin • Storage at Clay Basin continues to be an integral part of natural gas markets in the Rockies • Temperatures well below normal in the Great Basin area in January demonstrated the importance of Clay as a source of supply • Pipeline capacity constraints during the summer demonstrated the importance of Clay as market 26

Clay Basin Activity Injections and Withdrawals June 5, 2006 to Feb. 7, 2007 27

Clay Basin Yearly Comparisons 28

Other Potential Storage Opportunities • Southwest Wyoming Salt Cavern – Located near Evanston, WY – Ultimate capability 12. 5 Bcf working gas – initially 5 Bcf – Potential deliverability of 500 MMcf/day associated with 5 Bcf of storage – Increased interest due to new electrical generation and eastern markets – Interconnects with QPC and Kern River with potential tie to Overthrust Pipeline – Potential storage of liquids and compressed air • Other Potential Storage Projects 29

Summary • Questar Pipeline along with other pipeline companies is trying to keep up with production growth in the Rockies by pursuing major expansion projects. • The path to complete these projects is arduous in many ways with geography, regulatory and environment, manpower, materials and cost challenges to overcome. • Questar Pipeline greatly appreciates its customers in their willingness to support projects. 30