Nominations and Scheduling

Questar Gas Company

Annual Account Management

Customer Meeting

Will SchwarzenbachDirector, Gas Supply

NAESB Scheduling Process

• North American Energy Standards Board (NAESB)– Standard scheduling process used by all pipelines

• Communications between shippers and pipelines are done through nominations and confirmations

– This process is set up to ensure that all parties receive information at the same time (no market advantage)

– As the operator of the interconnecting distribution system Questar Gas is responsible for confirming nominations at its city gates

2

8am 12pm 8pm 12am 8am 12pm 8pm 12am

Gas Day 1 Gas Day 2

Timely Nominations (Cycle 1) Sent by 10:30 am

to the pipeline by 10:45 amScheduled at 3:30 pm

8:00 am GD2 Gas Flow

Evening Nominations (Cycle 2) Sent by 5:00 pm

to the pipeline by 5:15 pmConfirmations by 8:00 pm

Scheduled by 9:00 pm

8:00 am GD2 Gas Flow

Intraday 1 Nominations (Cycle 3)

Sent by 9:00 amto the pipeline by 9:15 amConfirmations by 12:00 pm

Scheduled by 1:00 pm

4:00 pm GD2 Gas Flow

Intraday 2 Nominations (Cycle 4)

Sent by 4:00 pmto the pipeline by 4:15 pmConfirmations by 7:00 pm

Scheduled by 8:00 pm

8:00 pm GD2 Gas Flow

3

“City Gate”

Upstream Pipeline

Shipper Contract

Upstream Pipeline Shipper Contract

Upstream Pipeline

Shipper Contract

1,000 DthSupplier 1

5,000 DthSupplier 2

20,000 DthSupplier 3

500 DthCustomer 1

5,000 DthCustomer 2

12,500 DthCustomer 3

7,000 DthCustomer 4

1,000 DthCustomer 5

Upstream Pipeline Questar Gas System

26,000 Dth

QGC & TS

Customer C

ontract 1

QGC & TS

Customer Contract 2

QGC & TS Customer Contract 3

QGC & TS Customer Contract 4

QGC & TS

Customer Contract 5

City Gates to QGC

Storage Facilities

Processing Plants

Well Interconnects

Pipe

line

Inte

rcon

nect

s

Upstream PipelineQuestar Gas System

Sales Customers

Transportation Customers

The Nominations Process prior to July 1, 2014

Manual Confirmation Process

Questar Pipeline changed its nominations & confirmations process effective July 1, 2014

• Questar Pipeline began requiring electronic confirmations

• Questar Pipeline began contacting shippers in mid 2013 to discuss a process change

– Concerns were verified on December 5, 2013 when Questar Pipeline could not schedule reductions in a timely manner

• Changes were required by Questar Pipeline to manage scheduling and allocations at the Questar Gas interconnects

– With additional cycles likely being required in the future, the time between cycles will be reduced making the manual process even more difficult

4

Questar Gas – The Operator

Questar Gas is responsible for operating the interconnects with all of the upstream pipelines serving the Questar Gas distribution system

– Confirm nominations for transportation customers on the Questar Gas distribution system

– Responsible for the delivery of supplies that arrive at the Questar Gas city gates for customers that hold transportation on the Questar Gas distribution system

6

Questar Gas (The Operator) Supports Electronic Confirmations

• Improves reliability on the Questar Gas system – System reliability is dependent on the ability of the operator to

effectively manage supply adjustments at the city gates• Timely customer notification of required reductions

• Provides the ability to better manage increasing number of Transportation customers’ nominations

7

Upstream Pipeline Transportation Capacity

8

Pipeline Capacity

Contracted Firm Capacity

Available Capacity on the Day (Interruptible or Flexed)

Utilized Firm Capacity on the Day (Nominated)

City Gates to QGC

Storage Facilities

Processing Plants

Well Interconnects

Pipe

line

Inte

rcon

nect

s

Upstream Pipeline Questar Gas System

Sales Customers

Transportation Customers

Storage Facilities

Processing Plants

Well Interconnects

Pipe

line

Inte

rcon

nect

s

Upstream Pipeline

City Gates to QGC

Questar Gas System

Sales Customers

Transportation Customers

9

“B”“A” “C” “D” “E”

“Flexed” Firm Capacity – “A” to “B” flexed to “E”

Firm Capacity

Released Firm Capacity

Interruptible Capacity

Prio

rity

of S

ervi

ceUpstream Pipeline Transportation Capacity

Customer Responsibility

• Customers are responsible for working with their Agents to understand the level of service being provided for their gas supply

• Firm Transportation on Questar Gas only guarantees delivery of gas that arrives at the Questar Gas city gate

Questions?