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James J. Cleary
President, El Paso Western Pipelines
AGA Financial Forum
Scottsdale, Arizona
May 8, 2006
Cautionary Statement Regarding
Forward-looking Statements
   This presentation includes forward-looking statements and projections, made in
   reliance on the safe harbor provisions of the Private Securities Litigation Reform Act
   of 1995. The company has made every reasonable effort to ensure that the
   information and assumptions on which these statements and projections are based
   are current, reasonable, and complete. However, a variety of factors could cause
   actual results to differ materially from the projections, anticipated results or other
   expectations expressed in this presentation, including, without limitation, our ability
   to successfully contract, build and operate the pipeline projects described in this
   presentation; changes in supply of natural gas; general economic and weather
   conditions in geographic regions or markets served by El Paso Corporation and its
   affiliates, or where operations of the company and its affiliates are located; the
   uncertainties associated with governmental regulation; competition, and other factors
   described in the company’s (and its affiliates’) Securities and Exchange Commission
   filings. While the company makes these statements and projections in good faith,
   neither the company nor its management can guarantee that anticipated future
   results will be achieved. Reference must be made to those filings for additional
   important factors that may affect actual results. The company assumes no obligation
   to publicly update or revise any forward-looking statements made herein or any other
   forward-looking statements made by the company, whether as a result of new
   information, future events, or otherwise.




                                                                                             2
Agenda

    Pipeline Group Overview
►


    Regional Supply and Market Trends
►


    Growth Outlook
►


    El Paso Western Pipelines Update
►




                                        3
El Paso’s Natural Gas Pipelines
                                                                                  ► 26% total U.S. interstate
                                                                                       pipeline mileage
                                             Great Lakes Gas
                                                                                  ► 36 Bcf/d capacity (25% of
                                            Transmission (50%)
                                                                                       total U.S.)
                           Wyoming
                           Interstate
                                                                                  ► Best market connectivity
         Colorado
                                                                                  ► Best supply access
                                 Cheyenne
      Interstate Gas
                               Plains Pipeline
                                                                                  ► Leading pipeline integrity
                                                                                       program
                                                                  Tennessee
Mojave
                                                                 Gas Pipeline
Pipeline                                    ANR
                                          Pipeline
                                                              Southern
                                                             Natural Gas

                                                                     Elba Island LNG
  El Paso
Natural Gas
                                                                     Cypress
                                                                     Pipeline
                 Mexico
                Ventures
                                                         Florida Gas
                                                     Transmission (50%)




                                                                                                             4
El Paso Western Pipelines


                            Wyoming Interstate
                            600 miles; 2 Bcf/d
           Colorado
        Interstate Gas             Cheyenne Plains
     4,000 miles; 3 Bcf/d              Pipeline
                                  380 miles; 0.8 Bcf/d

         El Paso
       Natural Gas
   10,600 miles; 6 Bcf/d




   Mojave
  Pipeline
 400 miles;
  0.4 Bcf/d




                                                         5
Rockies Supply vs.
Regional Export Capacity
                                                                          MMcf/d
9,000
                                  Rockies Express
                                  1,800 expansion
                Cheyenne Plains
8,000
                 170 expansion
                                            100% LF
        Cheyenne Plains
7,000                                 90% LF
         560 expansion
                                   85% LF

6,000


5,000                                                 Expansion needed:
                                                      ► 2011 if 85% LF
                                                      ► 2012 if 90% LF
4,000
                                                      ► 2015 if 100% LF
                   Supply Available for Export
3,000


2,000
    2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

                                                                               6
Arizona Gas Demand and
  Population Trends
                                                                                                    0.83%
         900                                                                                                 7,000
                                                                                            2.94%
                Year to                                                             0.12%
                                                                          0.49%
                                                                  2.66%
               Year Gas                                   2.95%
                                                 11.44%
                Growth
         800                            10.46%                                                               6,000
         700




                                                                                                                     Population (1,000’s)
                                5.43%                                                                        5,000
                      18.64%
         600
MMcf/d




                                                                                                             4,000
                                                                                      Compound Annual
         500                                                                          Growth Rates
                                                                                      Population:
         400                                                                          2000–2004: 2.69%       3,000
                                                                                      2005–2010: 2.49%
         300                                                                          2000–2010: 2.54%
                                                                                                             2,000
         200                                                                          Total Gas Demand:
                                                                                      2000–2004: 11.39%
                                                                                                             1,000
         100                                                                          2005–2010: 1.40%
                                                                                      2000–2010: 5.45%
          0                                                                                                  0
               2000    2001     2002    2003     2004     2005    2006       2007   2008     2009    2010
                 Residential/Commercial/Industrial          Electric Power              Arizona Population




                                                                                                                     7
California Gas Demand and
   Population Trends
         8,000                                                                                                  50,000
                  Year to
                 Year Gas
                  Growth                                                                               1.87%
                                                                                              2.46%
         7,000                                                         4.64% (0.09)% 2.81%
                        (1.23)%
                                                       6.99% (1.99)%                                            45,000
                                   (7.48)%
                                             (2.34)%
         6,000




                                                                                                                         Population (1,000’s)
                                                                                                                40,000
MMcf/d




         5,000

         4,000                                                                                                  35,000
                                                                                      Compound Annual
                                                                                      Growth Rates
                                                                                      Population:
         3,000                                                                        2000–2004: 1.52%
                                                                                                                30,000
                                                                                      2005–2010: 1.10%
                                                                                      2000–2010: 1.17%
         2,000
                                                                                      Total Gas Demand:
                                                                                                                25,000
                                                                                      2000–2004: (1.15)%
         1,000
                                                                                      2005–2010: 2.33 %
                                                                                      2000–2010: 0.49 %
            0                                                                                                   20,000
                 2000       2001   2002      2003      2004   2005     2006   2007   2008      2009    2010

                 Residential/Commercial/Industrial               Electric Power             California Population



                                                                                                                         8
California Gas Demand

        California Natural                  California Gas Demand by
        Gas Demand 2004                          Core vs. Noncore

   Electric
                         Residential
  Generation
                            23%              Noncore                         Core
     47%
                                               68%                           32%
            Industrial
               20%
                            Commercial
                               10%



Source: California Energy Commission     Source: California Gas Report - 2005 Supplement




                                                                                           9
WECC Regional Breakout of
          Installed Gas Fired MW Capacity
                        30,000


                        25,000                                                                Since 1999:
                                              Incremental Gas Demand
                                                                                        Added 6,130 MDth/d of
                                              1,680 MDth/d
                                                                                     potential new gas demand in
Installed MW Capacity




                        20,000                  980                                   Western Pipeline markets
                                               MDth/d

                                                              1,700
                        15,000
                                                             MDth/d

                        10,000
                                                                                        760
                                                                                       MDth/d                       750             260
                                                                                                                   MDth/d
                         5,000                                                                                                     MDth/d


                            0
                                 Southern     Northern       Arizona      Pacific   Southern Nevada    Mountain   Colorado / SE   New Mexico / El
                                 California   California                Northwest                     Northwest    Wyoming          Paso Area

                                                           Pre-1999 Capacity        Capacity Additions since 1999



                                                                                                                                               10
High Connectivity with
Supply and Markets
            Supply                            Markets
                                        345 Arizona UT
    ~200 Supply Receipt Points                      Delivery Points        CO


                                                    221   Southwest Gas
                                                     43   Citizens (UNS)
                                  NV
                                                     12   APS
                                                      8   SRP
                                                     61   Other




                                                                           NM
                                 CA




                                       ME
                                         X.




                                                                           11
Western Pipeline Growth Projects
                                                                                     Completed or under construction
                                                Cheyenne Plains
               WIC Kanda Lateral                                                                            Signed PA’s
                                                                                     Future Projects
                                                  Phase I & II
                Up to $137 MM
                                                   $385 MM
                 January 2008
                                                December 2005
               Up to 333 MMcf/d
                                                  755 MMcf/d

      WIC Piceance Pipeline
            $132 MM
                                                         CPG Yuma Lateral
           March 2006
                                                             $22 MM
           333 MMcf/d
                                                           October 2006
                                                            49 MMcf/d
                                Front Range
                                                                      WIC/CP Opal to Cheyenne
                              Market Delivery
EPNG Arizona
                                                                           or Greensburg
                               Infrastructure
   Storage
                                                                            $39–$67 MM
                                  $148 MM
  $105 MM
                                                                           January 2008
                                 2008/2009
   2009/10
                                                                             125 Mdth/d
 350 MMcf/d
                                                 CIG Raton Basin
                                                   Expansions
                                                     $91 MM
  EPNG Line 1903
                                                    2005–2008
      $74 MM
                                                   170 MMcf/d
  December 2005
    502 MMcf/d


                    EPNG Sonora Lateral
                         $91 MM
                         2009/10
                       800 MMcf/d




                                                                                                                      12
Continental Connector Project
     Secured significant
 ►
     commitment from
     Chesapeake Energy
     Binding open season runs
 ►
     through May 19
     Began NEPA pre-filing
 ►
     process
     Expected design: 1 Bcf/d
 ►
     with 1Q 2008 in-service




                                13
Western Pipelines Update

    Favorable orders on EPNG restructuring and rate caps
►

    – Largely approved proposed new services
    – Clarified limits on applicability of 1996 rate settlement

    Customer settlement negotiations ongoing in
►
    EPNG rate case
    Extended effectiveness of new CIG rate case until
►
    January 2007
    – Settlement negotiations ongoing



                                                                  14
El Paso Western Pipelines:
Conclusions

    Excellent supply access
►

    Serving growing markets
►

    High degree of connectivity
►

    Well positioned for growth
►

    Making good progress on rate cases and
►
    service restructuring


                                             15
James J. Cleary
President, El Paso Western Pipelines
AGA Financial Forum
Scottsdale, Arizona
May 8, 2006

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EP05_08Cleary_AGA

  • 1. James J. Cleary President, El Paso Western Pipelines AGA Financial Forum Scottsdale, Arizona May 8, 2006
  • 2. Cautionary Statement Regarding Forward-looking Statements This presentation includes forward-looking statements and projections, made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The company has made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this presentation, including, without limitation, our ability to successfully contract, build and operate the pipeline projects described in this presentation; changes in supply of natural gas; general economic and weather conditions in geographic regions or markets served by El Paso Corporation and its affiliates, or where operations of the company and its affiliates are located; the uncertainties associated with governmental regulation; competition, and other factors described in the company’s (and its affiliates’) Securities and Exchange Commission filings. While the company makes these statements and projections in good faith, neither the company nor its management can guarantee that anticipated future results will be achieved. Reference must be made to those filings for additional important factors that may affect actual results. The company assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by the company, whether as a result of new information, future events, or otherwise. 2
  • 3. Agenda Pipeline Group Overview ► Regional Supply and Market Trends ► Growth Outlook ► El Paso Western Pipelines Update ► 3
  • 4. El Paso’s Natural Gas Pipelines ► 26% total U.S. interstate pipeline mileage Great Lakes Gas ► 36 Bcf/d capacity (25% of Transmission (50%) total U.S.) Wyoming Interstate ► Best market connectivity Colorado ► Best supply access Cheyenne Interstate Gas Plains Pipeline ► Leading pipeline integrity program Tennessee Mojave Gas Pipeline Pipeline ANR Pipeline Southern Natural Gas Elba Island LNG El Paso Natural Gas Cypress Pipeline Mexico Ventures Florida Gas Transmission (50%) 4
  • 5. El Paso Western Pipelines Wyoming Interstate 600 miles; 2 Bcf/d Colorado Interstate Gas Cheyenne Plains 4,000 miles; 3 Bcf/d Pipeline 380 miles; 0.8 Bcf/d El Paso Natural Gas 10,600 miles; 6 Bcf/d Mojave Pipeline 400 miles; 0.4 Bcf/d 5
  • 6. Rockies Supply vs. Regional Export Capacity MMcf/d 9,000 Rockies Express 1,800 expansion Cheyenne Plains 8,000 170 expansion 100% LF Cheyenne Plains 7,000 90% LF 560 expansion 85% LF 6,000 5,000 Expansion needed: ► 2011 if 85% LF ► 2012 if 90% LF 4,000 ► 2015 if 100% LF Supply Available for Export 3,000 2,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 6
  • 7. Arizona Gas Demand and Population Trends 0.83% 900 7,000 2.94% Year to 0.12% 0.49% 2.66% Year Gas 2.95% 11.44% Growth 800 10.46% 6,000 700 Population (1,000’s) 5.43% 5,000 18.64% 600 MMcf/d 4,000 Compound Annual 500 Growth Rates Population: 400 2000–2004: 2.69% 3,000 2005–2010: 2.49% 300 2000–2010: 2.54% 2,000 200 Total Gas Demand: 2000–2004: 11.39% 1,000 100 2005–2010: 1.40% 2000–2010: 5.45% 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Residential/Commercial/Industrial Electric Power Arizona Population 7
  • 8. California Gas Demand and Population Trends 8,000 50,000 Year to Year Gas Growth 1.87% 2.46% 7,000 4.64% (0.09)% 2.81% (1.23)% 6.99% (1.99)% 45,000 (7.48)% (2.34)% 6,000 Population (1,000’s) 40,000 MMcf/d 5,000 4,000 35,000 Compound Annual Growth Rates Population: 3,000 2000–2004: 1.52% 30,000 2005–2010: 1.10% 2000–2010: 1.17% 2,000 Total Gas Demand: 25,000 2000–2004: (1.15)% 1,000 2005–2010: 2.33 % 2000–2010: 0.49 % 0 20,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Residential/Commercial/Industrial Electric Power California Population 8
  • 9. California Gas Demand California Natural California Gas Demand by Gas Demand 2004 Core vs. Noncore Electric Residential Generation 23% Noncore Core 47% 68% 32% Industrial 20% Commercial 10% Source: California Energy Commission Source: California Gas Report - 2005 Supplement 9
  • 10. WECC Regional Breakout of Installed Gas Fired MW Capacity 30,000 25,000 Since 1999: Incremental Gas Demand Added 6,130 MDth/d of 1,680 MDth/d potential new gas demand in Installed MW Capacity 20,000 980 Western Pipeline markets MDth/d 1,700 15,000 MDth/d 10,000 760 MDth/d 750 260 MDth/d 5,000 MDth/d 0 Southern Northern Arizona Pacific Southern Nevada Mountain Colorado / SE New Mexico / El California California Northwest Northwest Wyoming Paso Area Pre-1999 Capacity Capacity Additions since 1999 10
  • 11. High Connectivity with Supply and Markets Supply Markets 345 Arizona UT ~200 Supply Receipt Points Delivery Points CO 221 Southwest Gas 43 Citizens (UNS) NV 12 APS 8 SRP 61 Other NM CA ME X. 11
  • 12. Western Pipeline Growth Projects Completed or under construction Cheyenne Plains WIC Kanda Lateral Signed PA’s Future Projects Phase I & II Up to $137 MM $385 MM January 2008 December 2005 Up to 333 MMcf/d 755 MMcf/d WIC Piceance Pipeline $132 MM CPG Yuma Lateral March 2006 $22 MM 333 MMcf/d October 2006 49 MMcf/d Front Range WIC/CP Opal to Cheyenne Market Delivery EPNG Arizona or Greensburg Infrastructure Storage $39–$67 MM $148 MM $105 MM January 2008 2008/2009 2009/10 125 Mdth/d 350 MMcf/d CIG Raton Basin Expansions $91 MM EPNG Line 1903 2005–2008 $74 MM 170 MMcf/d December 2005 502 MMcf/d EPNG Sonora Lateral $91 MM 2009/10 800 MMcf/d 12
  • 13. Continental Connector Project Secured significant ► commitment from Chesapeake Energy Binding open season runs ► through May 19 Began NEPA pre-filing ► process Expected design: 1 Bcf/d ► with 1Q 2008 in-service 13
  • 14. Western Pipelines Update Favorable orders on EPNG restructuring and rate caps ► – Largely approved proposed new services – Clarified limits on applicability of 1996 rate settlement Customer settlement negotiations ongoing in ► EPNG rate case Extended effectiveness of new CIG rate case until ► January 2007 – Settlement negotiations ongoing 14
  • 15. El Paso Western Pipelines: Conclusions Excellent supply access ► Serving growing markets ► High degree of connectivity ► Well positioned for growth ► Making good progress on rate cases and ► service restructuring 15
  • 16. James J. Cleary President, El Paso Western Pipelines AGA Financial Forum Scottsdale, Arizona May 8, 2006