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Storage Outlook™
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07/18/2008 0715

07/15/2008 0800

07/18/2008 0550

07/18/2008 0531

986 bbtu
96 bcf
3658 bbtu
11.2 bcf
GULF PRODUCTION MONITOR: July 18, 2008 Enterprise still has not said when the four-day Independence outage will begin next week. Independence production stands at 817 MMcf/d today, down about 18 MMcf/d from yesterday's I2 cycle data. Total Gulf production is down to 0.5 Bcf/d today to 11.2 Bcf/d, which is below the month-to-date average. The big decliners are ANR, Tennessee, Sonat and Transco in the LA offshore and NGPL in the Texas Onshore, but there were multiple smaller declines. Tennessee is conducting unplanned maintenance on its 526A-100 Line. TEXAS ENERGY BULLETIN: July 18, 2008 ERCOT Peak Load was steady at 58 GW. Prices were mixed across the region. HH increased by 28 cnts to $11.43. HSC was up by 36 cnts to $11.21. The HSC-HH spread fell by 8 cnts to +22 cnts. Flows east to HH were down by 253,000 MMBtu. Waha increased by 15 cnts to $10.21. The Waha-HSC spread increased by 20 cnts to +99 cnts. Flows east to HSC increased by 33,000 MMBtu. SoCal fell by 3 cnts to $11.43. The Waha-SoCal spread fell by 18 cnts to +23 cnts. Flows west to SoCal fell by 109,000 MMBtu. US POWER - GAS BURN REPORT: July 18, 2008 SUPPLY DEMAND BALANCE: July 18, 2008 <--For Daily Supply/Demand Balance Report and Data, contact Bentek at 888-251-1264--> NATURAL GAS DAILY STORAGE RANGE: July 18, 2008 <--For Daily Storage Range Report and Data, contact Bentek at 888-251-1264-->
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Current News

07/18/08 1134AM Independence Plans Four-Day Outage Week of July 21Enterprise said it will take down the Independence Trail Pipeline for four days most likely during the week of July 21-25 in order to test the flex joint that was repaired during an extended outage in April and May. the pipeline has been transporting about 810 MMcf/d this month to date. Prior to the outage in March, flows averaged about 890 MMcf/d. Anadarko previously said it expected an 80% run-time factor this year from the hub.
07/18/08 1026AM TW - ANR Red Deer OutageThe ANR Interconnect will be shut in due to receiving an oily substance
that is incapacitating the meter facility. ANR and Transwestern are
working diligently to clean the facility and line.
Estimated down time is approximately 3 days.

Gas Day July 19, 2008

Total capacity for ANR Red will be reduced from 220,000 MMBtu/d to
0.

Gas Day July 22, 2008

Total capacity for ANR Red will increase back to 220,000 MMBtu/d.
07/16/08 0538PM REX - Hydrotest Conference CallREX Conference Call Summary 7/15/2008

The following matters were discussed on a conference call with REX shippers on July 15, 2008, which took place to discuss a posting which REX had made on July 14, 2008 concerning an upcoming hydrostatic test of a segment of the REX pipeline in September, 2008. This posting also includes additional information concerning the outage that was not discussed on the conference call.

REX has an approximately 26.6 mile segment of pipe that did not get tested to a high enough pressure to allow for the maximum allowable operating pressure (œMAOP) of the affected pipeline segment to be set at 1,480 psig. REX will need to operate at these higher pressures when the pipeline is placed in-service to Lebanon, Ohio.


Q: Why was September chosen as the month for this project?
A: The plan is to resolve this situation as quickly as possible. This timing allowed for the minimum outage period, when all of the factors required to complete this test are considered. REX did not want to get too far into the fall/winter period due to the risks that are presented by weather, especially with regard to water issues and right of way access.

Q: Where is this segment that needs testing?
A: The test section (approximately 27 miles long) straddles the ANR interconnect and is located between mainline block valves at Mileposts 466.2 and 520.2.

Q: Why is weather a concern when the pipe is buried in the ground?
A: The surface facilities required for dealing with the water may be impacted, as well as access to the right-of-way.

Q: Will shippers receive reservation credits?
A: Yes “ Pursuant to REXs FERC Tariff, GT&C Section 7.14. However, Shippers will need to nominate to their primary delivery points in order to receive the credit. Shippers can submit one nomination for a specified date range. When nominations are not confirmed, the shipper will be given the credit. REX is reviewing the possibility of setting up nominatable paper PINs that shippers can nominate from/to during this outage and not impact upstream and downstream parties.

Q: Could the outage be extended beyond the currently posted end date of September 26, 2008?
A: This date is REXs best estimate at this time. If there is a meaningful change in the timing of this outage, REX will post the information on its interactive website and possibly hold another conference call.

Q: What is the delivery capacity of REX during the outage?
A: REX can still deliver 1,500,000 Dth/d, but Zone 2 is limited to the capacity of the NNG, NGPL, and KMIGT delivery meters which equals 840,000 Dth/d. The delivery points available at the Cheyenne Hub are as follows:

PSCo Chalk Bluffs: 200,000 Dth/d
CIG Crazy Horse: 600,000 Dth/d
Cheyenne Plains Crazy Bear: 730,000 Dth/d
Trailblazer Lone Tree: 860,000 Dth/d


Q: Will the NGPL Segment 12 hydrostatic test impact the available capacity at the NGPL-Jefferson delivery point?
A: REX is reviewing with NGPL what this impact will be.

Q: Will any other delivery points that remain in service during this outage accept higher volumes than they otherwise normally would?
A: REX is reviewing this possibility with the other pipelines.

Q: Is there any other way to get the approval to operate at higher pressures from the DOT other than hydrotesting?
A: No “ REX has been in discussions with the DOT. Hydrostatic testing has been the proven industry standard for getting this approval. Pre-tested pipe does not make sense for a section of pipe that is 20 + miles long.

Q: Can you test with gas instead of water?
A: No, Pursuant to the applicable federal regulations, natural gas cannot be used as a test medium in this instance. Moreover, it can be more difficult to identify leaks if using a compressible gas and the temperature of water is more stable than a compressible gas which makes for a more controlled testing environment. For these reasons, hydrostatic testing is the generally accepted method for conducting these types of pressure tests.

Q: Can this section that straddles the ANR delivery interconnect, be split so that the ANR interconnect can be placed back into service sooner?
A: Splitting the system at ANR would add to the overall time to complete the testing. Additional facilities would also be required. Factors that were involved in planning this test include identification of viable water sources. The source that is planned for this test is just west of the test section.

Q: Does this test have to be completed before any Interim Service or service to Lebanon is offered?
A: There may be capacity limitations if this higher operating pressure is not approved for this segment but some deliveries could be made. Our goal is to be able to deliver 1.6 Bcf/d to Lebanon when we go into service there.

Q: With the permitting issues not having been completely resolved, is there a chance that the posted dates for this outage may change significantly?
A: REX does not consider the permitting process to be a major risk for changing the schedule at this time and is confident in the September 3rd start date. However, REX will post any changes in that date on its interactive website.

Q: Nominating to primary points will be difficult through several cycles. Is there anything that can be done to address this situation?
A: Shippers will be permitted to specify a date range nomination to make this less difficult. We will review the possibility of creating a paper PIN at PEPL and ANR to make it easier to nominate gas to those primary delivery points without affecting upstream and downstream pipelines. Upon further review, Shippers will only need to nominate on REX and do not need to nominate with upstream or downstream point operators/pipelines. Please contact your scheduling representative for assistance.

Q: What is the process for changing a shippers primary delivery points during this outage?
A: As posted on REX’s interactive website under the notification for this outage, shippers will need to submit a valid Service Request Form (œSRF) prior to 5:00 pm Central Standard Time on Friday, July 18th to request a change to their primary delivery points. A separate SRF must be submitted to request a change back, if desired, to the ANR and PEPL delivery points. This request must also be submitted before the July 18th deadline. SRFs received up until the July 18th deadline will all be deemed to have been received at the same time, and point capacity for changes to other primary delivery points, as well as for changes back to the PEPL and ANR points, will be awarded in accordance with REX’s tariff. Shippers submitting requests, by the deadline specified above, to move their primary delivery points back to PEPL and ANR upon completion of the outage, such requests will be processed up to the original point MDQ capacity held at each point prior to any new requests being processed.

Q: Can any other maintenance be completed on REX during this outage?
A: Yes “ REX is planning to complete other maintenance projects during this time frame.

Q: If a shipper declines to change its primary delivery points during the outage, will that adversely impact their ability to receive reservation credits?
A: No “ If a shipper nominates to its primary points at ANR and/or PEPL and does not get confirmed, that shipper will receive a reservation credit. If a shipper is successful in utilizing secondary delivery points to transport gas, the shipper will not receive a reservation credit for those secondary volumes that are transported.

Q: Is the deadline for submitting delivery point changes of July 18th a set date?
A: Yes “ REX has set that date in order to provide shippers an opportunity to plan ahead for this outage, which will require them to know what primary firm point capacity they will have available on their transport agreements.

Q: Can REX review the possibility of moving this outage to any time from October, 2008 forward, particularly to the winter months?
A: The planned outage in September is REXs base plan, but we will consider alternative months if we feel it is reasonable to expect that the required testing can be completed. But presently the outage is set to take place in September. Upon further review, the planned outage will need to remain as originally scheduled, September 3rd through September 26th, 2008.

07/16/08 0204PM Improvement to Regional Market ModelsReceipt and delivery points for CIG and ANR Pipelines have been updated in Bentek’s Demand and Supply Market Models. This new sample data has dramatically improved the breadth of point specific history data in the Bentek sample. In ordere to capture the correct year on year sample comparison, these new points had been held out of the Demand and Supply Market Models until the year anniversary of their posting so that appropriate history could be accumulated. Please call Bentek with any questions on the net impact of their inclusion.

Addition of CIG points are incorporated in the following Market Models: Gulf Demand, MW Demand, and West Demand.

ANR points will increase the sample in the Gulf Supply Market Model.
07/14/08 0502PM Questar - Greasewood UpdateQuestar expects repairs to the compressor at Greasewood will be completed this evening. As a result, capacity to TransColorado at MAP 297 will return to 47,500 Dth/d for gas day July 15, 2008.
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