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TRANSCANADA TECHNOLOGY INNOVATIONSAustralian Pipeline Industry Association SeminarMay 22, 2008 Brisbane

May 16, 2008TransCanada2

Leading North American energy company

• Competitively positioned in pipeline and energy infrastructure

• Almost $26 billion of premium pipeline and energy assets ($Cdn at Dec. 31, 2006, excludes ANR)

• Employ approximately 3,550 people in nearly 50 professions, trades and fields

• Strong financial position

TransCanada Introduction


• approx. 59,000 km (36,500 miles) of wholly owned pipeline.

• transports 15 billion cubic feet/day (Bcf/d) from virtually all major supply basins on the continent.

• 2,969 km of proposed oil pipeline, capable of transporting 590,000 barrels per day.

• 16 power facilities with 7,700 megawatts of power generation.

• two proposed liquefied natural gas facilities total capacity 1.5 Bcf/d.

• significant gas storage capacity in Canada and the United States, 360 Bcf.

TransCanada - Extensive Energy Network


The Value Pipeline


Technology Implementation• X100 pipe technology• Alternative Integrity Validation (AIV)• High Productivity Welding• High Performance Composite Coating (HPCC)• Composite Reinforced Line Pipe ( CRLP)• Gas Transport Module (GTM) Pressure Vessel

MarineRoad transportationStorage

TransCanada Technologies


• TransCanada use the technologies to drive down the cost to the benefit of shipper and has a staged process for technology development

Concept and feasibility study

Fundamental technology development

Controlled field implementation

Standard practices

• Controlled implementation of technologies in Stittsville and Deux Rivieres projects

Install 5.5 km X100 pipe in Stittsville project

Fully implement AIV in Deux Rivieres project

Apply tandem welding and mechanized tie-in welding for both

Use HPCC as the baseline coating

Technology Implementation Program


X100 Pipe Installation


• Installed 7.3km in Class 3 Locations in Stittsville project

5.3km supplied by JFE Steel2km supplied by IPSCO

• Significant accomplishmentGained NEB acceptanceEnhanced understanding on production capability and property consistencyImproved confidence in quality consistencyIncreased construction experience

X100 Pipe Technology


• AIV is an alternative to post-construction hydrotest to demonstrate pipeline integrity.

• Plan to implement AIV on both Stittsville and Deux Rivieres

Stittsville Loop was hydrotested as plannedWaiver of hydrotest for Deux Rivieres was approved by NEB

• First successful NEB waiver for onshore pipelineSubstantial benefits in environmental protection and cost savingsContinue to develop AIV process for regular and large scale applications

Alternative Integrity Validation (AIV)


• Mainline welding used a higher productivity mechanized GMAW with twin wire systems (tandem) to achieve higher productivity

• Tie-in welding with utilize mechanized FCAW and manual welding

• Apply to both Stittsville and Deux Rivieres

• Welding went generally well

High Productivity Welding


Mechanized GMAW


Welding


Composite Reinforced Pressure VesselTechnology

Resin

Steel Pipe and Heads

Glass Fiber

CRLP™ & GTM™ - Manufactured under license from NCF Industries, Inc. US & Foreign Patents Issued & Pending

The Gas Transport Module Technology

5/16/2008TransCanada14

Steel Liner

Primer

Composite Reinforcement

Outer-protection

Composite Reinforced Line Pipe (CRLP)

CRLP™ & GTM™ - Manufactured under license from NCF Industries, Inc. US & Foreign Patents Issued & Pending


1972 Swimmer delivery vehicle

1975 Fireman’s breathing apparatus

1975 Mountain climber’s oxygen tanks

1981 Natural gas vehicle storage tank

1986 Pipeline repair sleeves (ClockSpring®)

1991 Natural gas pipeline trial installation (Enron)

1996 TransCanada Due Diligence Study

1998 Pipe Replacement Installation (100 m)

2001 Two 24” projects ( 2kms, 50 m)

2002 One 48” project (100 m)

CRLP Historical Development


• Analysis and design methodologies

• Ultimate pressure capacity

• Fracture arrest capability

• Mechanical damage resistance

• Constructability

• Long-term performance

• Corrosion resistance

• Field trials

TransCanada Studies


• Excellent fracture arrest

• Resistance to mechanical damage

• Factor of safety on burst > 2.0

Safety Advantages


Fracture Control


Composite arrests cracks in both directions

Fracture Arrest


Material

- up to 10% less than all-steel

Transportation and Handling

- 40% weight savings

Construction

- Reduced handling costs due to lower weight

- Welding savings

Cost Savings


%Total Project

Savingsfrom CRLP

Net ProjectSavings

Pipe Costs

Transportation

Welding

Total: 7% - 8%

40 % 10 % 4.0 %

8 % 20 % 1.6 %

10 % 20 % 2.0 %

Net Project Cost Savings


1.2 - 2.70.3Poisson’s ratio

7 - 9 x 10-6/°C12 x 10-6/°CThermal exp.

2%>20%Ultimate strain

48,000 MPa207,000 MPaElastic modulus

483 - 1034 MPa485 - 655 MPaUltimate strength

n.a.414 - 559 MPaYield strength

Composite WrapSteel PipeMaterial Property

Material Properties


0

200

400

600

800

1000

0.0% 0.5% 1.0% 1.5% 2.0% 2.5%

Strain

Stre

ss

X70 steel pipe

composite reinforcement

Typical Stress-Strain Curves


0

10

20

30

40

50

-200 0 200 400 600 800 1000Hoop Stress (MPa)

Inte

rnal

Pre

ssur

e (M

Pa)

composite

steel

Hydrostatic Test


0

10

20

30

40

50

-200 0 200 400 600 800 1000Hoop Stress (MPa)

Inte

rnal

Pre

ssur

e (M

Pa)

composite

steel

Operating Stresses


Test Objectives:

1. Constructability in North

2. Cold weather bending, joining

3. Long-term performance

4. Validate manufacturing process

5. Confirm cost savings

Buffalo Creek Pilot


Joint Wrapping


Pipe Bending


1. Long-term performance

2. Constructability

3. Bending, joining

4. Long-term corrosion resistance and performance

Russell Creek Test Objectives


Installation and Monitoring


• First spiral weld composite wrapped 48”pipe

• Composite designed for pressure capability

• Constructability

• Joining capability

• Long term performance

Saratoga CRLP™ Objectives


Saratoga Loop Project


• CRLP a viable technology for many pipeline

applications

• Successful results of current field studies will

expedite use

• Canadian Standards Association – Pipeline Systems

Z662 Approval in 2007

Conclusions


• Small market for CRLP

• Very conservative industry….

• Market driver for lightweight, less expensive pressure

vessel for transportation of Compressed Natural Gas

(CNG) in marine, road and storage applications

Great Product, But.....


• Record high petroleum products pricing with oil >>$100US• Increase in global gas demand/price• Increase and more interest in gas discoveries• Power plant fuel replacement – imported oil results in

electricity charges >>$0.30US/kwh• Anti-flaring regulations/Kyoto• Government directives/incentives for CNG vehicle use• CNG a local solution with price determined by regional

market• CNG can provide a secure and reliable delivery• Diversification of energy sources• Locally available gas not subject to dynamics and volatility

of global gas markets

Key Drivers for Marine CNG


• Stranded gas• Associated gas• Stranded Markets• Incremental capacity• Provide “seed gas” to create the market to support a

pipeline• May replace need for a pipeline

Provides more market flexibilityCan be moved to other fields at end of lifePipeline environmental and political issues avoided

Marine CNG Applications


• CNG is a viable solution:25-2000 kilometres0.2 - 30 million scm/dRe-injection/flaring not feasible or desirableSmaller fields may be economic due to high re-injection costsReduced capital and operating costs versus LNG

• GTM™ technology (under license from NCF Industries) is approved and commercially available

• Power plant user must have incentive for switching from liquid fuel – cost differential

• CNG well suited for broader list of reserves smaller than required for LNG

CNG is the Solution


Economic Volume and Distance for CNG Transport

0

500

1000

1500

2000

2500

0 200 400 600 800 1000

Volume (mmscfd)

Dis

tanc

e (n

autic

al m

iles)

Marine CNG

Pipelines

New LNG

Marine CNG or Pipelines

First

Projects

Economic Volume and Distance for CNG Transportation


• Local recovery of stranded or otherwise unused energy• Provides inexpensive natural gas for use• Carbon credits available - $5-$25 US per tonne CO2

Natural gas ~ 2 kg/ m3 CO2• Emission reductions if replacing/displacing other fuels:

CO2 by 29% compared to oil, 44% to coalNOx & SOx by 80–100%Particulates between 90-100%

• CNG delivery consumes 5% energy vs. 12 - 14% for LNG and 38% for Methanol and Gas to Liquids

Environmental Benefits of CNG


Inlet Gas

Dehydration

Compression Gas Cooling

Gas Chilling(Optional)

Pipeline toLoading

Mooring Buoy or DocksideLoading System

Mooring Buoy or DocksideUnloading System

Pipeline to De-Compression Station

Heat Letdown Valve

Gas to Fuel System orCompression for

Pipeline

Low Pressure Fill Bypass

CNG System - Typical Process Schematic


Prototype under test

Demonstration Unit

ASME Code Case #2390 approval -October 2002

All containment system testing completed in 2001

GTM Fully Tested and Approved


DNV Rules for Compressed Natural Gas Carriers

Revision 1 October 2002for external hearing

Det Norske Veritas

American Bureau of Shipping (ABS) approval for inland barge use – November 2001

Approval in Principle (AIP) of GTM based ocean going carriers received from Lloyds Register - September 2003

System Approvals and Standards


• ASME Code vessels approved by all major class societies and provides the safest, most reliable design available on the market

• Larger size and lower cost than conventional seamless tube steeland all composite gas cylinders; minimizes valving and manifolding.

• GTMs are up to 40% lighter than an all-steel containment vessels built to the same code with the same safety factors.

• Ships operate at ambient temperature so require no complicated loading schemes or refrigerated hold.

• Loading facilities require only compression, cooling, dehydration, and loading connections - similar to offshore crude loading.

• Unloading facilities require letdown station, compression and unloading connections.

GTM System Advantages


• Simplicity of system provides low initial capital commitment to initiate gas flow.

• Easily scalable by adding ships and additional loading facilities to increase gas deliveries.

• Flexibility of system allows ships to be re-deployed to other production areas or markets when no longer needed. Simplicity of loading and unloading facilities means little stranded capital.

• Economic over large range of flows and transport distances - lower volume and distance thresholds than LNG.

GTM System Advantages


Cargo General Layout


Upstream Facilities Loading Marine Transportation System

Unloading Pipeline to Powerplant

Generic CNG Project Value Chain


The TransCanada/OSG Partnership


• TransCanada and OSG joined forces to provide a complete CNG marine transport service through TransCNG International (TCI):

The most advanced compressed natural gas cargo containment system design, testing and approval program.

Both teams are financially capable and able to achieve favourable financing structures for any proposed operating entity for CNG transport

Previous CNG transport experience

Long Term commitment to energy transportation

Building to world recognized ASME code ensures ease of regulatory/environmental approvals

Ships can be staffed with local crews ensuring local employment benefits

World Class Delivery of Energy


• TCI system based on proven, reliable experience operated by professional, world class energy transportation companies

• Safety is built into the system, meeting or exceeding all codes and regulations

• System is designed to perform and has the full backing of TransCanada and OSG to deliver ‘Gold Standard’ service over the life of the contract.

Marine CNG Safety


• Safety is a cornerstone of TransCanada/OSG operating philosophy

• Training of crew/staff of marine transportation operator during execution phase at TransCanada training facility in Canada

• Gas safety, handling, gas loading and unloading, operational training and emergency procedures

• Gas maintenance practices, troubleshooting, monitoring and simulations

• Hands on training in operating facilities

Operations Training and Support


Marine CNG Training Facility


Deep Water Loading, Unloading and Ship Outfitting CapabilityWorld Class Facility: ASME Section VIII, Div 3 and Section Xand ABS Approval for GTM Trailers

Manufacturing License awarded to FPC Inc. – Plant Developed in Saint John, New Brunswick, Canada

Production commenced December 2007

Floating Pipeline Company (FPC)


FPC Marine GTM Production


Volume: ~ 240,000scfVolume: ~ 240,000scf(6,800 m3)(6,800 m3)

Weight: ~ 42 tonnesWeight: ~ 42 tonnes

Length: 12 Length: 12 -- 13.5 m13.5 m

Number of GTMs: 3Number of GTMs: 3

ISO Container FrameISO Container Frame

Standard ISO Standard ISO Container Chassis Container Chassis TrailerTrailer

FPC CNG Trailer


Volume: ~ 240,000scf(6,800 m3)

Weight: ~ 29 tonnes

Length: 12 - 13.5 m

Number of GTMs: 3

CNG ISO Containers


Shore storage of CNG provides for:

Extra supply in event of disruption of supply chain

Extra gas for electricity peaking

Flexibility in ship unloading rate/docking configurations

Availability for establishing Mother/Daughter CNG refueling stations

Storage Module (2 GTMs)

Stack (3 Modules High)

1m 2.3m

26m

Storage Capability


GTM Storage Stack


Mother/Daughter CNG Stations


FPC GTM Trailer Loading


• Artumas Energy – Tanzania

• Progas Pakistan – Oman to Pakistan

• Todd Petroleum – Offshore New Zealand

• Husky Energy – Offshore Newfoundland

• Philippines Imports

• Indonesia in various places

• Israel from Turkey

• Jamaica imports

• Panama imports

• Trans Caspian Sea

• New Zealand Imports

• Barbados Imports

• Alaska to Hawaii

Recent Publicly Announced Potential CNG Projects


• More natural gas into energy mix in next few decades• Many fields too small to be developed for LNG or too far for

pipelines = CNG Niche Market• Marine CNG can provide lower cost gas supply to stranded

markets without the need for expensive infrastructure• Power plant fuel replacements are an ideal candidate for

CNG as the volume will underpin CNG development for industry and vehicles in local area

• CNG truck deliveries and storage can provide mother/daughter supply opportunities

• “Green” benefits converting from liquid fuels to CNG for power plants and vehicles

• TCI marine CNG transportation services – the complete solution

Summary


Mission The Canadian Energy Pipeline Association is dedicated to ensuring a strong and viable transmission pipeline industry in Canada in a manner that emphasizes public safety and pipeline integrity, social and environmental stewardship, and cost competitiveness.

Priorities

Pipeline safety and integrity

Environmental stewardship/climate change

Economic regulation and competitiveness

Regulatory efficiency

Aboriginal relations

Landowner relations

Canadian Energy Pipeline Association (CEPA)


• 6 trillion cubic feet of natural gas

• 950 million barrels of liquid hydrocarbons

• 100,000 kilometres of pipe

• $C67 billion in exports

Canadian Energy Pipeline Association (CEPA)


This award-winning program is the largest of its kind in Canada, with a participation rate of around 80% by students with a GPA of 3.0 or greater. Their goal is to produce "Superior Graduates". They strive to be the "School of First Choice". They currently have over 320 students on internships of 12-16 consecutive months. 10% of their interns work internationally - in Switzerland, Japan and the United States.

Engineering Internship Program at the Schulich School of Engineering


TransCanada’s Internship program provide an opportunity for TransCanada to hire skilled, motivated, career-oriented students on a year-round basis starting in January, May and September. They are an excellent source of temporary assistance for peak/seasonal overloads, special projects or backfills for vacation leave or long-term assignments.

As a requirement of their degree/diploma program, co-op or internship students alternate periods of full-time work with their academic terms to acquire practical experience prior to graduation.

Normal co-op term assignments are four to eight months.

Internship is similar to co-op education, usually with longer work terms of 12 months.

A co-op student's year or more of employment can be used towards required experience for a professional designation.

Co-op/Internship Students


The University of Calgary's Pipeline Engineering Centre (PEC) is affiliated with the Schulich School of Engineering's Department of Mechanical and Manufacturing Engineering. The Centre offers educational support and direction to the pipeline industry through the development and delivery of courses, seminars and workshops to industry in addition to the development of degree specializations and programs for graduate students. Through research, the centre seeks to be a leader in the generation and development of leading-edge knowledge and information for application in the area of pipeline engineering.

Pipeline Engineering Centre (PEC)


• For more information:TransCanada

Gary StephenPhone: +1 403 920-2025E-mail: [email protected]

Greg CanoPhone: +1 403 920-8142E-mail: [email protected]

OSGAngus CampbellPhone +44 191 218 0120E-mail: [email protected]

Contacts

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