Bank of America Merrill Lynch Power & Gas Leaders Conference. Pat Reddy, CFO

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1 Bank of America Merrill Lynch 2009 Power & Gas Leaders Conference Pat Reddy, CFO September 23, 2009

2 Safe Harbor Statement Some of the statements in this document concerning future company performance will be forward-looking within the meanings of the securities laws. Actual results may materially differ from those discussed in these forward-looking statements, and you should refer to the additional information contained in Spectra Energy s Form 10-K and other filings made with the SEC concerning factors that could cause those results to be different than contemplated in today's discussion. Reg G Disclosure In addition, today s discussion includes certain non-gaap financial measures as defined under SEC Regulation G. A reconciliation of those measures to the most directly comparable GAAP measures is available on our website. 2

3 Key Investment Highlights Premier Natural Gas Infrastructure Company Strategically located assets Attractive long-term industry dynamics Attractive Growth Potential Large base of projects recently placed in service; higher than forecasted returns Deferred a portion of projects to 2010 and beyond Upside potential with improving commodity prices Financial Strength and Flexibility Strong, stable earnings and cash flows from fee based businesses Investment grade balance sheet and ample liquidity Approximately 80% of credit exposure is with investment-grade entities; another 15% of exposure is secured with collateral Experienced Management Team Significant experience in the natural gas industry with proven track record Management incentives aligned with long-term shareholder value 3

4 Strategically Located Assets 2008 Natural Gas Pipeline Throughput 3.6 Tcf Miles of Transmission Pipe 19,100 Miles of Gathering Pipe 62,500 Miles of Distribution Pipe 37,000 Storage Capacity 285 Bcf Retail Customers 1.3 million 4

5 Business Segment Overview NYSE: SE U.S. Transmission Distribution Western Canada Transmission & Processing Field Services Texas Eastern Transmission Algonquin Gas Transmission Maritimes & Northeast Pipeline (77.53%) Gulfstream Natural Gas System (25.5%) Market Hub Partners (50%) Southeast Supply Header (50%) Spectra Energy Partners (74%) NYSE: SEP Union Gas BC Pipeline & Field Services Empress System Midstream Assets DCP Midstream (50%) DCP Midstream Partners (18.9%) NYSE: DPM 5

6 Solid Fee Based Businesses U.S. Pipelines average contract term by pipe: Texas Eastern 4 years Algonquin 9 years East Tennessee 8 years Maritimes & Northeast (US & CN) - 9 years Gulfstream 19 years Southeast Supply Header 12 years U.S. Pipelines average renewal rate is ~99% Union Gas Regulatory Structure Incentive Rate Regulation Storage Forbearance Western Canada Regulated rate of return pipeline Fee based gathering and processing Over 80% of Spectra Energy customers are investment grade 6

7 Natural Gas Flows: Shifting Sources, Growing Demand Demand Volume CAGR : Combined SET Markets 2.9% Northeast 1.6% Southeast 5.5% Pacific Northwest -0.8% British Columbia 1.8% Ontario 1.8% Lower 48 States 1.6% Source: ICF International (Formerly EEA), July 2009 Emerging Shale Plays Supply Basins Major Spectra Energy Markets Supply Flows 7

8 Track Record of Successful Project Execution Year Number of Projects Capital Cost (USD in Millions) Incremental Annual EBIT (USD in Millions) ROCE $ 650 $ % , % % Total 42 $ 3,100 $ % Returns averaging above targeted 10 12% return on capital 8

9 2009 Projects: Expect $650 million to be placed in-service West Doe (Phase III) In-Service 2H09 - $60 MM West Doe (Phase II) In-Service 3/09 - $40 MM South Peace Pipeline In-Service 2H09 - $130 MM 2009 EBIT contribution from these projects ~$35 million Additional 2010 EBIT expected to be ~$45 million Total annual EBIT of ~$80 million Heritage Storage In-Service 9/09 $15 MM Sarnia Storage In-Service 6/09 $20 MM Algonquin J-2 In-Service 9/09 - $35 MM Northern Bridge In-Service 2H09 - $45 MM Egan Storage 3 In-Service 7/09 - $110 MM Steckman Ridge In-Service 4/09 - $140 MM Moss Bluff Storage In-Service 2H09 - $55 MM Execution In-Service 9

10 2010 and Beyond: Positioned for future growth T-North Expansion In-Service 1H10 - $50 MM Fort Nelson Expansion In-Service ~ $1B Peace River Arch 2010 capital expenditure opportunities of ~$1 billion D-T Expansion - Lobo D-T Expansion Brantford Kirkwall P/L Dawn Gateway In-Service 2H10 - $25MM TEMAX / TIME III In-Service 2H10 - $700MM AGT East West In-Service 2H10 $45MM ETX Expansion Egan Storage 3 In-Service 1H10 - $50 MM Moss Bluff Storage In-Service 2H11 $60 MM TEAM Northeastern Tennessee SESH Phase II Gulfstream Phase V In-Service 2H11 - $25 MM Execution Development 10

11 Texas Eastern Transmission Northeast Market - Rockies Supply Strategy Destination of Rockies Supply (Bcf/d) Rockies Supply Arriving at Clarington, OH ~ Confirmed TETLP Expansions from Clarington, OH (0.695) Third Party Projects (0.400) Remaining at Ohio ~ Rockies Supply ~ 1.5 Bcf/d Ohio 2 Northern Bridge Est. Nov MMcf/d BP, Merrill Lynch Oakford, PA 1 TIME II In-Service Nov MMcf/d NJN, PSEG Texas Texas Eastern Eastern Market Market Area Area New Jersey 4 TEMAX Est. Nov MMcf/d ConocoPhillips 3 TIME III Est. Nov MMcf/d PPL Energy Plus, CenterPoint Transco Interconnect 11

12 Well Positioned to Participate in Developing Resource Areas: SET West New Gas Developments: Existing Spectra infrastructure extremely well positioned for growth Largest G&P business in Western Canada Strong land sale activity a leading indicator of future exploration and development activity BC Government generated record C$1.0B in land sales in 2007; 2008 set another overall record (C$2.7B) Montney, Horn River, & Cordova areas hold significant reserves potential: Horn River Basin: 500 Tcf * Cordova Embayment: 200 Tcf * Montney/Doig: 450 Tcf * Spectra facility expansions underway in response to producer infrastructure requirements * Source: Canadian Society for Unconventional Gas; October

13 Western Canada Transmission & Processing Why we re optimistic Our assets are located in some of the most prolific, high growth producing areas in North America Expectations are for a significant increase in natural gas production in our core operating areas BC Gas Production (Bcf/d - Sales Gas) BC/Alta Gas Production (Bcf/d - Sales Gas) BC Horn River Shale Play BC Montney-Doig Play BC (current production) BC Horn River Shale Play BC Montney-Doig Play BC (current production) Alberta Source: Company data, Oil and Gas Commission of BC, National Energy Board, Energy Resources Conservation Board of Alberta 13

14 Fort Nelson Area Expansion Proposed multi-phased expansion program to increase gathering and processing capacity in Fort Nelson, BC to accommodate gas from Horn River Firm take-or-pay commitments from ten customers for 790 mmcf/d Expansion involves: Reactivation of existing processing capacity at Fort Nelson gas plant, looping and reconfiguration of area gathering and compression, addition of new processing capacity at Cabin Lake compressor station Staged in-service

15 Great Investment Opportunity Premier natural gas infrastructure company Connects diverse supply base to fastest growing markets Solid investment grade balance sheet; strong/stable cash flows Financial flexibility Solid, steady growth in core business and attractive dividend yield Management incentives aligned with long-term shareholder value Attractive industry dynamics 15

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