Exhibit No. SOA-428
`Ree}Tt°DQa)°=~©x©3a
`Page 1 of 19
`
`et al.; RCA Docket Nos. P-08-9 etal.
`
`ConocoPhillips
`
`
`
`an
`
`
`
`
`
`BOISSTNAODALOLVINOTYLOWERSCY
`
`
`
`bl-s“V1Pe3ty
`
`
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`BSAVOSonxzeea
`
`JIAISOYPOSTSog
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`
`re Prohibited by Protective Order of the FERC
`
`TSRCOP00903487
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`

`®
`
`Exhibit No. SOA-428
`Docket Nos. ISO9-3.
`
`Page 2 of 19
`
`et al.; ROA Docket Nos. P-08-9 et al.
`
`TRANS ALASKA PIPELINE SYSTEM
`
`ConocoPhillips
`
`Overview
`800 Miles
`
`Five pumps currently operable
`
`Brief overview of the system
`Over 9 years from discovery well to Pipeline start up
`Literally took an Act of Congress before project could go forward (Trans Alaska
`Pipeline Authorization Act of 1973)
`Regulatory Oversight by 21 different State and Federal Agencies
`Capital allocated by ownership; operating expenses by BBL/mile share
`Celebrated 15 billion BBL in December 2005
`
`48” Diameter
`» Ten PumpStations
`Start Up June 20, 1977
`Peak throughput 2.03 MM BPDin 1988
`- 4 PumpStations currently in operation
`Ownership 28.3% ConocoPhillips
`Volume 34.5% ConocoPhillips
`2005 Throughput 0.89 MM BPD
`- Pipeline operator Alyeska Pipeline Service Company
`
`ConocoPhillips Alaska Pipelines
`
`April 20, 2006
`
`Operatorship incorporated in August, 1970
`
`
`
`-Hight-GeniidentiatProtectec:-haterals.- Disclosure Prohibited by Protective Order of the FERC TSRCOPO0003488
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`©
`
`Exhibit No. SOA-428
`Docket Nos. 1S09-3
`
`Page 3 of19
`
`al.; RCA Docket Nos. P-0B-9 et al.
`
`we a
`TRANS ALASKA PIPELINE SYSTEM
`ConocoPhillips
`Recent and Planned Successes
`
`Second best year everfor safety in 2005
`Reliability
`Organizational Realignment (2002)
`Tank Inspection timing at Valdez
`West Tank Farm Shut Down
`Reduction in Tugs
`Contracting Strategy
`Back Office G&A Reductions
`Subject Matter Expert cross-company knowledge sharing
`
`ConocoPhillips Alaska Pipelines
`
`April 20, 2006
`
`SMEs — BWT,integrity management, cold restart, risk assessment,etc.
`
`1.34 TRR
`
`Consistently better than 99%; Jess than 200,000 bb! prorated inlast three years
`OR - $28.5MM
`
`Tank timing $50MMover5 years
`WTF sd$4-6MM/year
`Tug reduction $3MM/yr
`Contracting strategy up to $30MM
`Back office — preliminary planning
`
`Hight-GertidentiatProtected-Materiais— Disclosure Prohibited by Protective Order of the FERC
`
`TSRCOPO0003489
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`

`

`@
`
`Exhibit No. SOA-428
`Docket Nos. IS03-3
`
`Page 4o0f 19
`
`al.; RCA Docket Nos. P-08-9 etal.
`
`Wee
`
`anne
`
`ConocoPhillips
`
`accountable. Needed capital infusion to address otherthree drivers
`
`Inefficient equipment at lower throughput
`30 year old technology
`High personnel costs due to manned stations; based on
`Contingency Plan (C-Plan) obligations
`Can’t do much about environment; significant improvementin holding operator
`
`TAPS STRATEGIC RECONFIGURATION
`
`Vision
`Minimize costof transportation to extend economic
`life of the pipeline system and North Slopeoil fields
`- Simplify facilities, renew assets, and automate using proven
`technology
`
`Project Boundaries
`eNo decrease in safety or operational integrity
`eMove all oil available at Pump Station 1
`e Maintain reliability factor of over 99%
`elmprove efficiency and lower costs
`
`ConocoPhillips Alaska Pipelines
`
`April 20, 2006
`
`TAPSoperating costs benchmark as highest in the nation by API
`Drivers
`Operating Environment
`Organizational structure where operator not held fully
`accountable for costs
`
`
`
`“rightyPretesied-Hatertats~ Disclosure Prohibited by Protective Order of the FERCGenfidertiat
`
`
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`TSRCOP00003490
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`©
`
`Exhibit No. SOA-428
`Docket Nos. IS09-3
`
`Page 5 of 19
`
`al.; RCA Docket Nos. P-08-9 et al.
`
`TAPS STRATEGIC RECONFIGURATION
`
`ConocoPhillips
`
`Project Details
`- Major upgrades at four pumpstations (1, 3, 4, and 9)
`Switch to regional maintenance and emergency response
`Amend Oii Spill Contingency Plans
`Upgrade control systems (PS 5, rampdown PSs, RGV's,
`fire systems)
`Replace SCADA system
`Upgrade telecommunications
`
`accountable. Needed capital infusion to address other three drivers
`
`Original COP Economicsfor main project
`> $61. MMnet. apital
`
`» NPV AARR|==J
`
`ConocoPhillips Alaska Pipelines
`
`April 20, 2006
`
`TAPS operating costs benchmark as highest in the nation by AP!
`Drivers
`Operating Environment
`Organizational structure where operatornot held fully
`accountable for costs
`
`Inefficient equipment at lower throughput
`30 year old technology
`High personnel costs due to manned stations; based on
`Contingency Plan (C-Plan) obligations
`Can’t do much about environment; significant improvementin holding operator
`
`
`
`*Highly-ConfidentiatProtectec-Materiais= Disclosure Prohibited by Protective Order of the FERC
`
`TSRCOPO0003491
`
`

`

`Exhibit No. SOA-428
`Docket Nos. ISO9-3
`Page 6 of 19
`
`t al.; RCA Docket Nos. P-08-9 etal.
`
`TAPS SR CHALLENGES
`
`ConocoPhillips
`
`
`
`« Early AFE sanction (January, 2004)
`— Early startup and accelerated tax benefits
`— Fire Marshall regulatory commitments
`— Inadequate Project definition — 15% detailed engineering
`completed
`¢« Unanticipated Regulatory Requirements
`— Fire suppression requirements in unmanned "cold"facilities
`— Extensive reviews/approval by Joint Pipeline Office
`¢ Underperformance of Engineering
`Contractor SNC Lavalin
`— Critical milestones missed
`— Delayin delivery of engineering packages
`¢ Organizational resistance
`— Misalignment between project team and operations
`
`ConocoPhillips Alaska Pipelines
`
`April 20, 2006
`
`Fire marshal
`
`Accelerated tax credits
`
`Deferred maintenance
`
`Result — inadequate project def.
`Alaska experience
`Management support/communications on organization
`
`
`
`“HighlyProtected-Metertaie- Disclosure Prohibited by Protective Order of the FERCConfidential
`
`
`
`TSRCOPO0003492
`
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`

`eS
`
`Exhibit No. SOA-428
`Docket Nos. 1S09-3
`
`Page 7 of 19
`
`al.; RCA Docket Nos. P-08-9 et al.
`
`RESULTANT TAPS SR SUPPLEMENTS
`
`ConocoPhillips
`
`Original AFE $020
`PS 1 Power, GVEA Supplement
`Supplement 1 Funding
`
`April 20, 2006
`
`Inaccurate Estimates
`
`Design Development
`Commadity Prices
`Design Changes
`Schedule Delay
`Productivity/Rework
`Contingency
`Supplement 2 Funding - Cumulative
`
`ConocoPhillips Alaska Pipelines
`
`inaccurate Estimates / Funding Gaps 12
`Underestimate of tie-ins during shutdown, 2; FCO/Commiseioning by Alyeska, 2; Telecoms SONETring network, 1; 12
`hr versus 10 hr shift OT premium, 1; Additional Inspection and Survey costs, 1; Drawings as-buiiding underestimate, 1;
`Additional field engineering support, 1; Alyeska supplied fuel, 1; Additional camp costs, 1; Additional Alyeska oversight
`staff, 1, Other <0.5 ea, 1
`Inadequate definition resulted In too many simplifying assumptions and identification of Issues and gaps
`Design Development
`8
`Electrical scope increased by thres,
`3; Piling scope (inc. air knifing), 2; Pipe rack steel (seismic and pipe stress), 1;
`T/G's arctic enclosure dasign & fuel haating, 1: PS3&4 back-up generators from 750kw te 2.25mw, 1; Other <0.5 ea -
`Additional VFD module fire walls, additional Security Camera's
`Commodity Prices and Freight
`6
`World-wide commodity & equipment price increases from summer 2003 until most equipment & material were
`purchased during 2004 andinto first half of 2005
`Structural Stesl (50 to GO% increase), 1; Electric cable & tray (25 to 30% increase), 1; Electrical equipment (20 to 25 %
`increass), 1; Freight (60% Increasa), 1: Pipe, Valves & fittings (40 to 50% increase), 1;
`Other <0.5 ea, Pile Steel, Instrumentation.
`DesignChanges
`4
`Additional retained buildings heating, 1; Multiple less than 0.5, 3 (Stiff shaft motor, 0.4; Additional Halon banks, 0.3;Add
`pumpstation recirculation, 0.3; Pump module piping sizes, 0.3; Additional disconnect switches, 0.2; Fuel gas metering,
`0.2; Pump medule layout review, 0.1; PS3 pad expansion, 0.1; Cold restart contingency piping, 0.1; Multipia Other, 1.0)
`Schedule Delay
`4
`Alyeska Project staff, 1; Construction Management Team, 1; Storage and temporary heating, 1; Multiple other, 1
`Performance/Rework/Regulatory Oversight
`3
`SNC/Hinz eng productivity (80%), 1; ANSI tie-in flanges replacement, 1: Responsa to JPO oversight (direct costs only),
`1; Fabricator claims due to late eng. & material delivery, 1; Motor vibration, <0.5
`Contingency on remaining work
`4
`All risk cannot be removed by more planning. Execution and design issues will occur beyond the control of the Project
`Taam, the Contractors, or the Gwners
`
`
`
`HighlyConfidentiatRratectedMaterials - Disclosure Prohibited by Protective Order of the FERC TSRCOP00003493
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`©
`
`Exhibit No, SOA-428
`Docket Nos. 1S09-348-0
`
`Page 8 of 19
`
`al; RCA Docket Nos. P-08-9 et al.
`
`FURTHER TAPS SR CHALLENGES
`
`We
`
`eas
`
`ConocoPhillips
`
`
`
`* Supplement 2 request based on 70% complete
`detailed engineering
`* Risk/Contingency Determination not adequately
`accountedfor
`~ Turbine generator corrosion
`- Construction resource availability
`— Severe winter 2005/2006
`¢ Project Management System inadequately staffed
`— Resources pulled from
`project at critical juncture
`— Trend Logs not reconciled to Forecast
`¢ Supplemental Cost Estimate contained errors
`* Significantly strengthened organizationstill did not
`have the experience sets to deliver the project
`
`Potential impact — Third Supplement request anticipated
`impact Being Evaluated
`Potential Scope Change
`
`ConocoPhillips Alaska Pipelines
`
`April 20, 2006
`
`|
`
`Fire marshal
`
`Accelerated tax credits
`
`Deferred maintenance
`
`+ighh;GenfidentialRrotected_Materials- Disclosure Prohibited by Protective Order of the FERC
`
`TSRCOPO00003494
`
`

`

`©
`
`Exhibit No. SOA-428
`Docket Nos. 1S09-348
`
`Page 9 of 19
`
`t al.; RCA Docket Nos. P-08-59et al.
`
`SR MITIGATION MEASURES
`
`ConocoPhillips
`
`April 20, 2006
`
`* Duplicated numerous previous Owner Peer Reviews and
`Operational Readiness Reviews
`* Direct Owner support for key project managementroles
`* Deferral of project work at two PumpStations
`* OwnerIntervention on Project
`— By May 4", Alyeska will provide
`* Revised, detailed work plan with risk based cost estimate
`+ Status of actions taken on Owner Review recommendations
`* Recovery Plan to meet current authorized capital limit
`including refreshed economic evaluation
`* Key milestones to measure progress
`* Root Causes behind newly projected cost increases
`* Clear explanation of how MOC was approved for each root
`cause
`* Further Owner Mitigations
`ConocoPhillips Alaska Pipelines
`
`Technical support — engineering management, project controls, turbine
`generators, corrosion, electrical design issues,reliability, etc.
`
`Ongoing Interventions
`Technical Oversight Group
`Numerous OwnerPeerAssists
`Operational Readiness Review
`Technical Assistance
`Electric Mator Solution
`
`Contracting Strategy
`Additional Owner Project Management Support
`OwnerMitigation Plans
`Additional Project Management Resources
`COP Project Control
`GPAI Project Management Construction Support
`EOM Project Management Support
`Controlled Contingency Management
`Additional Operation Readiness Review(s)
`Long Term Savings Assurance Review
`Reinforce Rigorous MOC Process
`
`
`
`“Highly CanfidentialProtectedMaterals.
`
`Disclosure Prohibited by Protective Order of the FERC
`
`TSRCOPON003495
`
`

`

`©
`
`Exhibit No. SOA-428
`Docket Nos. |S09-3
`
`Page 10 of 19
`
`al.; RCA Docket Nos. P-08-9 etal.
`
`FERCLitigation — 2005/2006 TAPSTariffs
`
`ConocoPhillips
`
`- Extensive discovery andfiled testimony from expert witnesses
`— Full hearing scheduled for October
`— No decisionlikely before late 2007
`
`|
`
`ConocoPhillips Alaska Pipelines
`
`April 20, 2006
`
`Contributors:
`
`¢ Significant increase in 2005tariffs levels
`ef
`Highly Confidential Protected
`Materials
`
`* Intra-state rollover
`
`* TSM renegotiations
`
`Head on challengeto tariffs set by TAPS Settlement
`Methodology.
`
`Burden on carrier to defendtariff, not shipperto justify
`
`« Protestors
`—- Anadarko
`* TSMinterstate tariff unjust and unreasonable
`— State of Alaska
`* Interstate tariff discrimination relative to lowerintrastate tariff
`* {mprudence re Strategic Reconfiguration costs
`* TAPS Settlement Methodology signatories contractually obligated to
`defend settlement
`Intervenors include Tesoro,Flint Hills, Williams, ASRC and CPAI
`*
`* Process at FERC
`
`2003 and 2004. (Williams seeking value from 1/1/03 to 4/1/04)
`
`“Protest” is objecting to current 2005tariff.
`
`“Complaint” is retroactive two years. Potential of refunds for
`
`TSRCOP00003496
`
`
`+ightyComidenttalProteeted-Materials-Disclosure Prohibited by Protective Order of the FERC
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`

`

`®
`
`Exhibit No. SOA-426
`
`Docket Nos. !S09-3
`
`Page 11 of 19
`
`et al.; RCA Docket Nos. P-08-9etal.
`
`Bingdine Property Tax
`eben
`
`valuations
`
`* State pushing uo 2006 pipeline
`assessments
`
`* Valuation basis shifling ta
`Replacement Cast rather than
`traditional Incume basis
`
`: TAPS and Ainine Assessments
`being appdaled io SARK -~ dacision
`itt June
`
`» Simullaneous FERC rare making
`piocass may pregent apnesance of
`conflicting positions
`
`* Slate's proposed gas contract
`PLT reguits in even higher implied
`
`
`
`
`
`
`
`
`
`
`
`eeeeneneesarneee e: tensea aeeeeemmeresreteenieatDAARAEDSPDRARSDRDRADADADS,2 os ee renenae
`
`
`
`
`
`erry
`
`
`
`
`
`anaaare
`
`;f
`
`neRaRAAARRAARAAAAAPEOCEDTETEETED
`
`RCA Request for Discontinuance of Service
`fr
`Approval for PS#7, 12... approval deferred on PS#2. 6. §, and 1D.
`Significant ixsnes remain re DRAund impact on raics.
`
`TAPS AVY
`
`Alaska Department of Revenge appeal of TAPS $38 value rejected (81.58
`income Hased estimate).
`
`Appeal to SARE In mid-Mayts next step
`
`;
`Orher ~ Labor issues
`| NURB granted yeview ofeartizr raling supporting the bargaining unit limited 10
`| ¥VMTteeh’s. Bricts and responses to NLRB regarding issues raised in appeat
`| due May 23 and June 6 respestively.
`
`
`BaeRreecereererePeeereneeeeRneeReRRrrneARERRSedePedeSRAGEEEOSELBROEETEES:
`
`
`
`“highty-SenfictentiatPretected-Matariais.Disclosure Prohibited by Protective Order of the FERC TSRCOP000G3497
`
`
`
`
`
`

`

`@
`
`Exhibit No. SOA-428
`
`Docket Nos. IS09-348
`
`Page 12 of 19
`
`at al.: RCA Docket Nos. P-08-9 etal.
`
`ConocoPhillips
`Polar Fleet Overview
`Mebtabiteaearntra
`
`‘ae *
`
`rs
`
`| Potur Alaska
`{979
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`
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`|
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`Polar Hiscovery
`
`Polar Adventure
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`2
`obo ing ay Ste 2
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`serra
`Loans
`
`eightyConfitemtiatPretested-Matedais...Disclosure Prohibited by Protective Order of the FERC TSRCOPOD003493.
`
`
`
`
`
`
`
`

`

`et al.; RCA Docket Nos. P-08-9 etal.
`
`Exhibit No. SOA-428
`Docket Nos. 1S09-3
`Page 13 of 19
`
`Highly Confidential Protected Materials
`
`
`
`
`
`HightyContidenttatProtectec-Metetiaia— Disclosure Prohibited by Protective Order of the FERC TSRCOPO0003499
`
`
`
`

`

`Exhibit No. SOA-428
`Docket Nos. |S09-3:
`Page 14 of 19
`
`et al.; RCA Docket Nos. P-08-9 et al.
`
`TAPS PIPELINE RECAPITALIZATION
`
`= @
`ConocoPhillips
`
`|
`
`BACKUP
`
`ConocoPhillips Alaska Pipelines
`
`___ April 20, 2006
`
`*Highty-GenfidentierProtected-Materials-- Disclosure Prohibited by Protective Order of the FERC
`
`TSRCOPO00003500
`
`

`

`Exhibit No. SOA-428
`Docket Nos. 1509-3
`Page 15 of 19
`
`et al.; RCA Docket Nos, P-08-9 et al.
`
`ConocoPhillips
`
`April 20, 2006
`
`TAPS PIPELINE RECAPITALIZATION
`Previous Mitigation Actions
`* Continued Interventions/Assistance
`— Technical Oversight Group
`— Numerous Owner Peer Assists/Reviews
`« Preliminary Engineering (2)
`+ Pre-Sanction
`» Feb 05
`» Aug 05
`* Feb 06
`— Operational Readiness Reviews
`+ Feb O05
`» June 05
`* Mar 06
`— Technical Assistance
`¢ Electric motor solution
`
`« Contracting sirategy
`+ Proj Mgmt Support
`* Turbine Generator support
`* Risk Assessment- Future
`ConocoPhillips Alaska Pipelines
`
`Ongoing Interventions
`Technical Oversight Group
`Numerous Owner Peer Assists
`Operational Readiness Review
`
`Technical Assistance
`
`Electric Motor Solution
`
`Contracting Strategy
`Additional Owner Project Management Support
`OwnerMitigation Plans
`Additional Project Management Resources
`COP Project Control
`CPAI Project Management Construction Support
`EOM Project Management Support
`Controlled Contingency Management
`Additional Operation Readiness Review(s)
`Long Term Savings Assurance Review
`Reinforce Rigorous MOC Process
`
`
`
`HightyProtected-Materiats— Disclosure Prohibited by Protective Order of the FERCConfidential
`
`
`
`TSRCOPO0003501
`
`

`

`@
`
`Exhibit No. SOA-428
`
`Docket Nos. 1S09-348
`
`Page 16 of 19
`
`etal.; RCA Docket Nos. P-08-9 etal.
`
`
`
`* TSM implemented in 1988
`+ Formula to determine maximum intastate
`and inferstate larifis
`* Variable tariff methodology for true up of
`estimated costs te acluais
`
`- vérsus morte traditional Fixed Cust
`method
`
`+ Term through 2011, option fo terminate in
`208
`
`* Successor agreement discussions sei hp
`bagin in 2007
`
`
`
`|
`
`
`ConscePhiiips AlaskaPipstinesApril29,2008
`eeeererenereeenreel‘
`
`
`eeenererenersrarerereeeeeeeee ane2reeALRRRAAARLRA
`
`
`
`
`
`Creative solution to impasse.
`
`Many unique features.
`
`For example:
`front end loading depreciation, greater than units of
`throughput
`Allowance per Barrel.
`
`These “unique features” were attacked in the RCA starting
`| in 1997, and are now under attack at FERC.
`
`
`
`
`
`
`
`RanmanentLanaaamaanenareveresnenseenenen
`
`
`
`
`
`
`
`TSM negotiations will be picked up at the end of the
`presentation
`
`:
`
`Lae
`
`TSRCOPO0003502
`
`
`srightyContidentia-Protected-Wateriale—Disclosure Prohibited by Protective Order of the FERC
`
`

`

`@
`
`Exhibit No. SOA-428
`
`Docket Nos. 1S09-348-
`
`Page 17 of 19
`
`et al.;: RCA Docket Nos. P-08-9 etal.
`
`
`
`"Bipclineos
`
`TAPS interstate
`+ 90% of TAPS tnroughput
`» Regulated by FERG
`+ Taff agreement will Hkely be
`lermingted in 2068
`> Subsequent FERC rate case will
`result in reduced tariff
`
`TAPS intrastate
`70% of TAPS throughput
`* Renelated uy Regulatory
`Commission i Alaska CRCA4
`» Protest of TSM rates resulted in
`ferential intnasiale lanfis
`» Rate cece on appral
`
` increase in 2005 is due to lower throughput, SR severance costs, higher
`
`owner insurance costs, and intrastate carryovar. This jump in tariffs.
`contributed fo FERC chailenge
`
`Overtime, the intrastate portionis proportionately growing. Now up to
`10%of throughput.
`
`The $1.20 to $1.50 dropin intrastate tariff after 2003 due to the RCA
`niandated rate for intrastate carriage.
`
`The interstate tariff drop affer 2008 due to TSM being terminated.
`
`Projections based on 2006 LRP.
`
`nannanneneIETT,
`
`“FERCbasis --cop| i=catescr|
`ROCEfrom TAPS gross pe
`based.
`oLot today's income stream:
`
`“COP internal FyFEE] ourchase price allocation [===]===]
`“Based on tariffsSSed to RGAleveis - low single digits
`
`
`
`#ighty-ConfidentiatProtectedMaterials.Disclosure Prohibited by Protective Order of the FERC TSRCOPGO003503
`
`
`
`
`
`
`
`

`

`.
`
`@
`
`Exhibit No. SOA-428
`
`Docket Nos. IS09-3
`
`Page 18 of 19
`
`etal.; RCA Docket Nos. P-08-9 et all.
`
`Tariff History
`
`$/bbl
`
`1998
`
`1999*
`
`2000
`
`2001
`
`2002
`
`2003
`
`2004
`
`2005*
`
`2006
`
`Highly Confidential Protected Materials
`
`Three majorlevers In TSM model:
`-Expected total system throughput
`-Exepected total system cost
`-Voluntary revenue reduction
`-Actual over/undercollection
`
`ConocoPhillips Alaska Pipelines
`
`April 20, 2006
`
`Note trend of BP/COPtariffs..... Discuss 1999 — 2000 and 2005 — 2006
`
`Only carriers with substantialempty spac¢ssid
`
`
`
`-+righty-Genficentie-froteciedMaterals—Disclosure Prohibited by Protective Order of the FERC TSRCOP00003504
`
`
`
`

`

`*
`
`Exhibit No. SOA-426
`Docket Nos. |S09-3:.
`Page 19 of 19
`
`et al.; RCA Docket Nos. P-08-9 etal.
`
`peersnnesensumeseneueroeraraeees cossauecenpesynuysHHAnanasnengmesnMnnuenenmenanenaahiesoeeqeecnbenusnansssunnensnsennnsanmuas Gaumeeesaesenees tuscnanenneccssseaenneaaneetneaunnnarernaneery,
`
`ras AMEKE Pigaite Rystair Caerriars
`
`Ong Pipeline coeraied as five separaie companies.
`
`Alyeska Fipshne Service Compariy created io operaie.
`[Pn et emer tereenen eeeeeee a EReRRenee nmin gt RARE
`KARAS NANA LEONARAee enemies Athd SERREseme ee eneee eeeeweeee
`
`Neneeee eee eeeem eee eeEE mn eee ee eee ee eee neemeemeee eeemeee enemeeee oneness SREa sm ESeen Ens een
`
`
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`DananaeanandRAEHengeeenneemceeeenbeesSdSEEEdeaenmeemennmenneenemensseenmesneed
`
`
`Undivided Joint interest Pipeline
`
`
`
`eeeaneseeneeeee AekEDERAAGH ODBRRLAREE PPRUeeereenererer:
`
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`
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`Structured to promote tariff competition.
`
`Opex initially based on ownership. After each year end
`ciose, the carriers settle up based on actual utilization
`(barrel-miles share).
`
`For 2004, COP will pay $29.1MM for using more than our
`28.3% share. Most of the payment goes to BP.
`
`| Gapex is based on ownership share.
`
`TSRCOPO0003505
`
`-Highty-Cenfidential_ProtectedMaterials-Disclosure Prohibited by Protective Order of the FERC
`
`