Pivotal Development:Regions of Possibilities

Dana GramsSenior Vice President, Pivotal Development

2003 Analyst/Investor Conference 2

Pivotal Energy

• Pivotal Energy Development formed within AGL Services Company in August 2003

• Pivotal coordinates development, construction and/or acquisitions that complement current assets

• Focused primarily in Southeast and mid-Atlantic regions (that’s our “sphere of influence”)

• Improve service to our customers through:– Increasing reliability of service– Reducing cost of service

2003 Analyst/Investor Conference 3

Opportunities for Pivotal

Now:

• Capacity requirements for our distribution companies are changing

Now:

• Our distribution companies’ contracts for firm transportation services are expiring

Soon:

• Potential shifts in supply sources for natural gas

2003 Analyst/Investor Conference 4

Sample Load Duration Curve and Supply Stack of “Assets” to meet it

2003 Analyst/Investor Conference 5

Contracts Totaling 50% of the MDQ and 63% of Reservation Charges Expire in the Next Two Years

MDQ

200536%

20136%

20122%2010

12%20091%

20081%

20076%

200614%

Evergreen7%

Remainder15%

Reservation Charges

200547%

20136%

20121%

20105%

20091%

20080%

20076%

200617%

Evergreen3%

Remainder14%

2003 Analyst/Investor Conference 6

Virginia Natural Gas Service Territory

2003 Analyst/Investor Conference 7

Pivotal Propane Peak Shaving FacilityScope and Project Objectives• Scope:

– Adds 28,800 Dthd– Expandable to 66,000 Dthd– 3 million gallon Cold Storage tank

• Project Objectives: – Meets 3-year peaking forecast– Expandable for 10-year demand– 10 days of peaking– South to North flexibility

2003 Analyst/Investor Conference 8

Pivotal Propane Peak Shaving Facility Timeline

May-Sep ’03May-Sep ’03 Oct ‘03 Nov ‘03 Q104 Q204 Q304 Q404Oct ‘03 Nov ‘03 Q104 Q204 Q304 Q404

ConstructionConstruction

Preliminary EngineeringPreliminary Engineering

Propane Plant Start-up 12/04

Propane Plant Start-up 12/04

PermittingPermittingPermitting

Complete 2/26

RegulatoryRegulatoryApproval

Complete 1/23

• VEPD• Local• County• Air• Soil • Site Work

• Tank Construction• Process Construction• Pipeline

BoardApproval

2003 Analyst/Investor Conference 9

Present State of Georgia Pipelines

¯

Georgia HP System

Southeast Interstate Pipelines 20030321

ID

East Tennessee Natural Gas Co

Southern Natural Gas Co

Southern Natural Gas Co (SGNG)

Transcontinental Gas Pipeline Corp

Gas Main - SizeNominal Diameter

0.500 - 1.500

1.501 - 3.000

3.001 - 5.000

5.001 - 7.000

7.001 - 9.000

9.001 - 11.000

11.001 - 13.000

13.001 - 16.000

16.001 - 19.000

19.001 - 37.000

LNG Plant or Terminal

Jacksonville

Tran

sco

Southern Natural

Transco

Southern Natural

Southern Natural

Sou

ther

n N

atur

al

South Georgia

South Georgia

South Georgia

Southern Natural Gas

Transcontinental Natural Gas

East Tennessee Natural Gas

South Georgia Natural Gas

Elba Island LNG Terminal

East

Ten

ness

ee

Compressor Station

2003 Analyst/Investor Conference 10

Macon Peaking Pipeline/Bare Steel Replacement

• Repatriates 70 MDth/d stranded capacity from the Macon LNG facility to metro Atlanta

• Provides additional peaking to marketplace

• Delivers Elba or GOM gas to Atlanta

"

"

JONES

COWETAJASPER

BIBB

UPSON

HENRY

PIKE

MONROE

PUTNAM

FULTON

MORGAN

MERIWETHERTROUP

NEWTON

GREENE

BUTTS

LAMAR

HARRISTALBOT

FAYETTE

DEKALB

BALDWIN

DOUGLAS

WALTON

CARROLL

SPALDING

TWIGGS

WILKINSON

CRAWFORD

CLAYTON

ROCKDALE

HEARD

OCONEE

HANCOCK

COBBPAULDING OGLETHORPEGWINNETT

TAYLOR

Atlanta

Macon

Macon LNG

Riverdale LNG

SW Georgia/Macon Peaking Pipeline

T:\Gis\ Apps\Projects\Thematic Mapping\Projects Files\Renewals\SW Georgia Macon Peaking Pipeline-20030724.mxdAGL Resources, Mapping Services, July 2003

" LNG Plant

Macon Peaking Line (AGL)

SW Georgia Line (AGL)

Southern Natural Gas

Transcontinental Pipeline Co

Macon Bare SteelPeaking Replm't

Est. Cost (millions) $14 $48Length - Miles $19 $60Capacity - MDthd @ 600 PSIG 76 76 @ 1200 PSIG 178 178

2003 Analyst/Investor Conference 11

In the future, supply basin flows to our region will change

2003 Analyst/Investor Conference 12

Existing and Proposed LNG Import Facilities

Elba Island, GA ( Operating)

Operator: El Paso

Vaporization Capacity 440 MMcf per day (maximum sendout is 675 MMcf per day

Storage Capacity 4 Bcf

Number of Tanks 3

Tanker Berths 1

Draft 12 metres

Pipeline Connections Southern Natural Gas

Baja, Mexico(ConocoPhillips, Sempra, ChevronTexaco, Shell,

BP, Marathon)

Bahamas(El Paso, AES, Tractebel)

East Coast(Golar, Somerset,

Weaver’s Cove)

Offshore GOM(Shell, El Paso, ChevronTexaco)

CameronCameron(Sempra)(Sempra)

West Coast(Mitsubishi, Crystal,

BHP Billiton)

West Coast(Calpine)

FreeportFreeport(Cheniere)(Cheniere)

Bear Head(ANE)

FairwindsFairwinds(TCPL, ConocoPhillips)(TCPL, ConocoPhillips)

Everett, MA (Operating)

Operator: Distrigas LNG

(Tractebel)

Vaporization Capacity 435 MMcf per day (expanding to 600 MMcf per day in mid-2001

Trucking Capacity 100 MMcf per day

Storage Capacity 3.6 Bcf

Number of Tanks 2

Tanker Berths 1

Draft 11 metres

Pipeline Connections Algonquin, Tennessee

Canaport(Irving)

Lake Charles, LA ( Operating)

Operator: Trunkline LNG

(CMS)

Vaporization Capacity Peak capability 1.0 Bcf per day. Sustained capability 630 MMcf per day

Storage Capacity 6.3 Bcf

Number of Tanks 3

Tanker Berths 1

Draft 12 metres

Pipeline Connections Trunkline, Gulf Coast Pipes

Cove Point, MD ( Operating)

Operator: Cove Point LNG

(Dominion)

Vaporization Capacity 1 Bcf per day (750 allocated for imports)

Storage Capacity5.0 Bcf (expanding to 7.5 Bcf)

Number of Tanks 4 (expanding to 5)

Tanker Berths 2

Draft 11 metres

Pipeline Connections Columbia Gas, Transcontinental

Existing Terminals

Proposed Terminals

2003 Analyst/Investor Conference 13

Global LNG Trade Routes

2003 Analyst/Investor Conference 14

LNG is Destined for Eastern Seaboard

• Trinidad LNG is bound for US, both eastern seaboard and Gulf Coast

• Qatar and Nigerian LNG may seek US markets as well

• Elba Island Terminal – Current capacity 440 MDthd

– Shell expansion 360 MDthd

– 800 MDthd available daily

– Total takeaway of 520 MDthd is mis-matched; AGL can be part of solution

• AGL is poised for East Coast market opportunities

2003 Analyst/Investor Conference 15

GeorgiaMarketplace

¯

Georgia HP System

Southeast Interstate Pipelines 20030321ID

East Tennessee Natural Gas Co

Southern Natural Gas Co

Southern Natural Gas Co (SGNG)

Transcontinental Gas Pipeline Corp

Gas Main - SizeNominal Diameter

0.500 - 1.500

1.501 - 3.000

3.001 - 5.000

5.001 - 7.000

7.001 - 9.000

9.001 - 11.000

11.001 - 13.000

13.001 - 16.000

16.001 - 19.000

19.001 - 37.000

Jacksonville

Elba Island LNG Elba Island LNG Import TerminalImport TerminalElba Island LNG Elba Island LNG Import TerminalImport Terminal

Atlanta

2003 Analyst/Investor Conference 16

AGL Marketplace: A Region of Opportunities

VNG Propane Peaking

East Tennessee Pipeline

Joint Use Pipeline

OPPORTUNITY Virginia Market Place

Elba Island LNG

Jacksonville

Transco Pipeline

SONAT Pipeline

a

Appalachian Production

Macon LNG

Georgia Market PlaceGeorgia Market Place

Cove Point LNG

2003 Analyst/Investor Conference 17

Potential Opportunities For Investment

Propane Air Plant

Macon Peaking Pipeline

Pipeline Replacement Project*

Pipeline Project

LNG Opportunity

2004 2005 2006 2007 2008 2009

*Required under pipeline replacement program.