CONFIDENTIAL

Permian to Katy “P2K”Gas Pipeline Project

October 2017

CONFIDENTIAL

Producer Feedback and Concerns

2

● Market

− Ability to reliably and ratably sell gas every day to maintain oil production

− Looking for a deep market with a diversified customer pull

− Desire to sell at a liquid and transparent point - specifically ICE trade point

− Mexico market demand Timing of load development

Seasonality of gas consumption

Potential of competition with future Mexican unconventional gas production

● Contract

− Concerns about pipeline to pipeline rate stacking

− Reluctance to make long-term commitments in a low commodity price environment

− Desire to expand market flexibility and access beyond existing limited and opaque intrastate market

● Other

− Constructability and timing to go into service

− Competition with Eagle Ford associated gas

CONFIDENTIAL

P2K Project Overview

3

● 42” pipeline built and in service as intrastate 24 months after FID

● Project capacity of 1.5-2.0 Bcfd

● Receipts at Waha Hub Headers

● Long-term capacity commitments

● Equity opportunity for anchor shipper

● Deliveries into the Gulf Coast Market (“GCM”) area (power generators, LNG projects, Mexico exports, refineries and LDCs) including inter-and intrastate pipelines

● Creating a more robust Katy Hub with bilateral ICE trade point

● Promoting additional Katy demand and liquidity with incremental Permian supplies

CONFIDENTIAL

P2K Value Proposition: Superior Market Access

4

Interconnect Pipelines

HSC and Power

Gen Markets

LNG Export

MarketsMexico Exports

Storage Connectivity

Intrastate

Houston Pipe Line

√ √ √

Atmos Lone Star √ √

KM Texas & KM Tejas

√ √ √ √

Enstor Katy √ √ √ √

Interstate

TETCO √ √ √ √

TGP √ √ √ √

NGPL √ √ √ √

Transco √ √ √ √

GSPL √ √ √ √

Coastal Bend Header

√ √ √ √

P2K Katy Hub

CONFIDENTIALCONFIDENTIAL 5

P2K Katy Hub Operating Example

P2K Katy Hub

* HSC Market* LNG Export* Mexico Export

• Hub Buy (HB)• Wheel from Hub (WFH)

P2K Supply

* Mexico Export* LNG Export

• Hub Buy (HB)• Wheel from Hub (WFH)

HSHB

WFH

WFH

HSHB

P2K Supply

* Producer/Shipper• Wheel to Hub (WTH)• Hub Sale (HS)

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Local Demand at Sub-regional Level Relative to Production

P2K Value Proposition: GCM Size

● GCM area is the world’s largest and most concentrated natural gas market and is projected to grow to 13 Bcfd by 2025

● In contrast, the market size in South Texas is projected to grow to 5 Bcfd by 2025

Regional Gas Demand Outlook (Bcfd)

Source: Wood Mackenzie 1H17 Long-term Natural Gas Outlook

0

4

8

12

16

2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035Power Industrial LDC Freeport LNG Cameron LNG Sabine Pass LNG

0

4

8

12

16

2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035

Power Industrial LDC Corpus Christi LNG Exports to Mexico

South Texas Market Gulf Coast Market

CONFIDENTIAL 7

Sources: Wood Mackenzie, EIA. Numbers in the table include capacity outlook for 2022, in operation or under construction and potential incremental capacity by 2022.

South Texas

GCM

Gas-firedgeneration (GW) 8 24

LNG (Bcfd) 1.2 6.9

Refinery capacity (MMbbl/d)

0.8 4.1

New industrial demand (Bcfd) 0.1 1.3

P2K Value Proposition: GCM Depth

CONFIDENTIAL

P2K Value Proposition: CFE and LNG Customer Pull

8

CFE and LNG shippers hold ~4 Bcfd of long-term interstate capacity positions that support Permian gas purchases via P2K

● CFE holds 1.3 Bcfd of long-term transport from GCM to Agua Dulce (AD)

– HPL: Carthage to AD – 900 MMcfd

– TETCO: STX (Vidor to AD) – 400 MMcfd

● Direct access to Freeport LNG via Coastal Bend Header (CBH)

– Freeport LNG - 3 trains

Gulf South CBH: 1,420 MMcfd

Gulf South Katy: 250 MMcfd

TETCO Stratton Ridge: 400 MMcfd

KM Texas/Tejas: 320 MMcfd

● Cameron LNG - 3 trains

– TGP: ~100 MMcfd Z0 to terminal

– TETCO: ~200 MMcfd STX to terminal (up to 300 MMcfd available)

● Cheniere Sabine Pass LNG (5 trains) and Corpus Christi LNG (2 trains)

– NGPL: ~400 MMcfd TGP: 300 MMcfd

– Transco: 400 MMcfd KM Tejas: 250 MMcfd

CONFIDENTIAL

P2K Value Proposition: GCM Liquidity

9

20 20

62 62

87 87

21 107 40

380

South Texas GCM

Sources: Platts, ICE

Trade Volumes'000 MMBtu/d, 12 months ending Q2 2017, average of Platts and ICE data

Day-Ahead Month-Ahead

TGP Z0

196

Katy

598

Tetco STX

Transco Z1

NGPL STX

Agua Dulce HSCTransco Z2

14 1424 24

62 62

371

0 640

26

South Texas GCM

137

191

TGP Z0

Tetco STX

NGPL STX

TGP Z0

Tetco STX

Transco Z1

NGPL STX

Agua Dulce

Katy

HSC

Transco Z2

TGP Z0

Tetco STXNGPL STX

CONFIDENTIAL 10

P2K Value Proposition: Access to Storage

0

256

SouthTexas

GCM

Storage capacity, Bcf

Storage access assures reliable takes of natural gas including during LNG train trips

CONFIDENTIALCONFIDENTIAL 11

South Texas Market Considerations

Limited depth of regional market

● Two buyers (CFE and Corpus Christi LNG) account for ~3/4 of the market

● Gas could become stranded at Agua Dulce requiring another expansion to market

Timing and certainty of Mexico load growth

● Seasonal variability of Mexico load

● Mexico gas production increase

Timing and certainty of South Texas LNG development projects

Lack of storage could further exacerbate price volatility and impair the ability to maintain ratable gas flows

Direct competition with Eagle Ford associated gas

CONFIDENTIALCONFIDENTIAL 12

Market Comparison: South Texas vs GCM

Metric South Texas GCM

Liquidity 196137

598191

Market size(Bcfd)

45

813

Storage capacity (Bcf) 0 256

# of Large Buyers 4-6 20-30

New 1.5 Bcfd project as a share of 2020 demand

32% 15%

day-aheadmonth-ahead

current2022

CONFIDENTIALCONFIDENTIAL 13

P2K Project Value Proposition to Producers

A single project to reach large GCM area and its end-use customers

● GCM can easily accommodate 1.5 – 2 Bcfd from new supply source

● Multiple end users (CFE, LNG exporters, refiners, generators, LDCs) looking for supply

● Takeaway constraints at Agua Dulce may require a subsequent north flow project to Katy

● CFE has 1.3 Bcfd of long-term capacity and can serve its load from Katy

● STX market can pull incremental supply from Katy should the need materialize

P2K will move gas to a liquid and transparent point, assuring reliable takeaway

● Delivery points will trade as part of the Katy index (confirming with Platts)

● Diversification of interstate pipelines/LNG exports supplement intrastate market

● Incremental Permian supplies provide value uplift due to increased liquidity at Katy

Additional benefits for anchor shippers

CONFIDENTIAL

Anchor Shipper Benefits

14

Limited MDTQ proration exposure

Contract extension rates

Discounted rates

Other benefits to be negotiated

Equity investment opportunity

CONFIDENTIALCONFIDENTIAL 15

Key Milestones and Commercial Contacts

Boardwalk Pipeline Partners Sempra Energy

Jill Edwards (Jill.Edwards@bwpmlp.com) Brad Ledbetter (bledbetter@sempraglobal.com)

Edgar Tavares (Edgar.Tavares@bwpmlp.com) Jim Diemer (jdiemer@sempraglobal.com)

Commercial Contacts

Key Milestones

Open season Aug - Sep 2017

Negotiate and sign precedent agreements Oct - Nov 2017

Final Investment Decision Nov - Dec 2017

Commencement of operations Q1 2020 (potential phased in date of Dec 2019)