June 27, 2016

Alliance Pipeline

Noteholder update

Forward-Looking Information

Certain information contained in this presentation constitutes forward-

looking statements. The words “anticipate”, “expects” and “expected to”

and similar expressions are intended to identify such forward-looking

statements. Although Alliance believes that these statements are based on

information and assumptions which are current, reasonable and complete,

these statements are necessarily subject to a variety of risks and

uncertainties including, but not limited to, future operating performance,

regulation, economic conditions and fundamentals affecting the oil and gas

producing and marketing industries. Should one or more of these risks or

uncertainties materialize or fail to materialize, or should underlying

assumptions prove incorrect, actual results may vary materially from those

expected.

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Presentation Overview

� Successful transition to new services offering (“NSO”)

� Efficient operations and outstanding reliability supporting commercial optimization

� Strong demand for NSO

– Sold seasonal firm in excess of planned amounts

– Significant Interruptible Transportation (“IT”) revenues realized

– Already contracting 2017 seasonal capacity

� Financial performance exceeding expectations

� Supportive market fundamentals for continued contracting efforts

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Alliance Overview

� 1.65 Bcf/d capacity from WCSB to Chicago

� 250 mmcf/d receipt capacity out of the Bakken

� Tioga lateral added 126 mmcf/d of capacity out of the Bakken

� Transporting over 140,000 bpd of NGLs

� Ability to transport 1,150 Btu/cf commingled gas

� Reliability over 99%

System Capability

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Highlights

� Financial results as strong as ever; achieved revenues comparable to previous cost of service contracts

� Strong operational performance and corporate redesign has led to significant cost reductions

� Success with new services offering

Strong Financial Results

� Sold out all receipt capacity through 2018 and 90% of receipt capacity in 2019 and 2020

� Alliance has marketed all available seasonal firm capacity and successfully used short-term firm and interruptible services to capture producer demand for our transportation service

Strong demand for new service

offerings

� WCSB long on gas – export options desired to lessen AECO dependence

� Long term supply forecasts and Alberta-Chicago Basis favourable to long term Alliance utilization

� Montney proving competitive to any play in North America: our shippers are in prominent areas

� LNG exports from Canada’s west coast highly unlikely prior to 2021

Strong Fundamentals

� Successfully received regulatory approvals from both the NEB and FERC to have our applied for tolls and tariffs effective December 1, 2015

Regulatory approvals in place

� Firm contract revenues through 2020 underpin strong and strengthening debt coverage metrics

� Restrictive covenants, structural and creditor protections unchanged from original restrictive package

Strong debt coverage with protections in

place for lenders

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Improving Financial ProfileKey Messages

� Alliance achieving over 20% reduction in operating and administrative costs in 2016

� Shipper contracts support strong credit metrics; bolstered by $20 million of IT revenue to the end of May 2016

� Senior secured note balances continue to amortize through 2025

– Post 2020, manageable outstanding balances (Canada $410 MM, U.S. $193MM)

� Successfully extended credit facilities

� Current WCSB market fundamentals supportive to continued re-contracting efforts

– Strong Alberta – Chicago basis

– Reduced WCSB demand growth profile

– Delayed LNG final investment decision approvals

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Alliance Takes “Best Fleet” Performance to new highs

� Entire fleet had 99.91% reliability through May 2016

� New control systems and focus on unit health monitoring produced only 5 trips across whole system

– 75% reduction from previous world class performance

– Resulted in significant operational cost savings

� All semi-annual maintenance at every station completed ahead of planned schedule

– 2,500 hours of maintenance activity all completed safely

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Continued Strong Financial Results(Q1 2016 vs. Q1 2015 in thousands of dollars)

2016 2015 2016 2015

Revenues 133,880 134,544 80,289 82,540

Non-renewal Charge 5,430

Total Revenue 133,880 134,544 80,289 87,970

Expenses net of Depreciation

and Amortization ("D&A') 46,547 56,159 23,923 23,466

Net Income Prior to D&A 87,333 78,385 56,366 64,504

D&A 17,575 29,132 12,671 20,907

Operating Income 69,758 49,253 43,695 43,597

Interest 15,463 17,782 7,265 8,178

Net Income 54,295$ 31,471$ 36,430$ 35,419$

Alliance Canada Alliance U.S.

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Annual Firm Capacity Sold Out Through 201890% Contracted in 2019 and 2020

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Target 1.325 Bcf/d

Seasonal Firm Service Contracted Above Planned Levels

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Target 1.395 Bcf/d

FundamentalsNatural Gas and NGLs

� Long term supply is robust; positioned in strong areas of Montney and Duvernay plays

� Liquids rich gas driving production to satisfy condensate demand and extract other liquids value to enhance producer netbacks

� Propane and ethane supply require access to export markets to unlock full value

� West Coast LNG unlikely before 2021-2025 time frame; Production ramp up required supports utilization of Alliance

� Limited economic alternatives to Alliance; Deep cut facility economics remain challenged

� Current NGTL and Westcoast pipeline capacity constraints in the receipt system should continue to provide strong demand for APL seasonal and IT services through 2017

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Alliance is well suppliedSignificant New Receipt Capacity Since 2010

� Alliance Canada is connected to 54 natural gas meter stations and 4 liquids receipt points

� Since 2010, ~ 1.7 Bcf/d of new receipt capacity installed including 425 mmcf/d in 2016 (Big Mountain Creek and Tony Tower)

� All receipt connections were producer funded

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(1) PIR defined as defined as the present value of future cash flow (after tax, 9% discount rate) divided by the initial investment. Analysis assumes US$40 WTI and US$2.25 HHUB at US$0.70/C$. Source: Scotiabank GBM Playbook as at Sept 2015

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PIR Top 15 North American Plays(1)

The Montney has shown strong growth even through low gas price environments due to decreasing well costs and technological advances

Fundamentals – Montney CompetitivenessEconomics Competitive to top North American Plays

FundamentalsNGL Transport Up by 65% from 2010

Source: Company reports

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FundamentalsU.S. Midwest Remains a Strong and Growing Demand Market

U.S. Midwest demand is forecast to grow approximately 2 Bcf/d by 2025

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2.00

4.00

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16.002

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0

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35

Bcf

/d

US Midwest Gas Demand Forecast

Other

Transport

Power

Industrial

Commercial

Residential

Source: Wood Mackenzie 2016 H1 Long-Term View

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Aux Sable adds Fractionation Capacity in 2016

� Aux Sable has worked with producers developing liquids rich plays in Canada, producing some of North America’s most liquids rich gas

� $130 million expansion of the Channahon fractionation facility will add 24,500 barrels per day in propane and butane fractionation capacity increasing total NGL specification recovery capacity to 131,500 barrels per day

� Target in service date in 2016 is supported by rich gas premium agreements

� Additional fractionation capacity and a right to extract NGL’s from natural gas transported on Alliance provides a unique, high value, total energy delivery system

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Alliance Provides Economic Uplift for Producers

DAILY OIL BULLETIN (May 19, 2016): “Shippers who have locked in liquids-rich natural gas volumes on the full-to-the-brim Alliance pipeline are currently benefitting, fetching stronger U.S.-based pricing at Chicago City Gate, stronger price realizations for liquids, all the while avoiding the price pinch and glut at AECO.”

CREW ENERGY (May 5, 2016): “Realized a 15% improvement in natural gas pricing over the previous quarter despite a 26% decline quarter over quarter in AECO benchmark pricing, as a result of Crew’s firm transportation arrangement on the Alliance Pipeline system”

DELPHI ENERGY (May 11, 2016): “Achieved realized gas prices of $3.08 per mcf, prior to realized risk management gains, as a result of 88 percent of the Company’s natural gas sales now being shipped on the Alliance pipeline…”

SEVEN GENERATIONS (May 5, 2016): “By reaching the U.S. Midwest region, our first quarter realized natural gas price was $3.24 per thousand cubic feet (Mcf), up 24 percent from a year ago. ”

STORM RESOURCES (February 25, 2016): “On December 1, 2015, Storm began flowing gas on the Alliance Pipeline to Chicago which improved the natural gas price in December by

approximately $0.45 per Mcf over the equivalent BC Station 2 price.”

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Regulatory Update

� New Services Commenced December 1, 2015 on Alliance Canada

– Fixed tolls approved for long-term firm receipt, delivery, and full path services

– Interruptible and Seasonal Firm Service approved (with tolling flexibility to set bid floors up to 125% of fixed toll)

– Hydrocarbon Dewpoint (“HCDP”) specification revised to -5°C

– A subsequently filed shipper complaint seeks the reversal of the NEB’s 2015 decision that established scheduling priority of interruptible service ahead of diversions (awaiting NEB judgment)

� Service Modifications Adopted December 1, 2015 for Alliance U.S.

– New negotiated rates for shippers approved by FERC

– Hydrocarbon Dewpoint (“HCDP”) specification revised to 23°F

– FERC hearing established to assess Recourse rate levels (settlement process ongoing)

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Lender ProtectionsStrong Structural Credit Enhancements

� Restrictive Covenant Package

– Restrictions on lines of business, disposals, and additional indebtedness

� Liquidity and Structural Protections

– Debt Service Reserve Account for six months of scheduled principal and interest payments

– Amortizing debt structure

� Creditor Protections

– Intercreditor arrangement

– Security trustee and trust accounts (on all but equity accounts)

– Distribution restrictions

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Summary

� Alliance has aligned itself with superior assets

� Alliance’s unique ability to transport entrained liquids has and will continue to set Alliance apart from other competitors

� Fundamentals support current and long term utilization of Alliance

� Strong financial results indicative of new services offering success

� Alliance will continue to deliver to premium markets and offer diversification to Western Canadian and Bakken producers

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Contacts

www.alliancepipeline.com

Keith PalmerSenior Vice President & CFODirect: (403) 517-6369Email: Keith.Palmer@alliancepipeline.com

Kevin SundvallTreasurerDirect: (403) 517-7711Email: Kevin.Sundvall@alliancepipeline.com

Terrance KutrykPresident & CEODirect: (403) 517-6500Email: Terrance.Kutryk@alliancepipeline.com

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US MidwestMarket Hub

Supplemental InformationNew Services Framework

• Predictable and competitive fixed tolls

• Receipt zone and transmission services in addition to full-path service

• New services to enable optimization of rich gas transport and support

production build up in developing resource plays

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Supplemental InformationNew Service Offering Alternatives

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