"I’m with LNG Canada and I’m the Legal Director. I’m employed by Shell and am seconded into LNG Canada, which is a joint venture of Shell and 3 large Asian companies which I’ll get to and describe in a moment.

LNG Canada is the project that Keith referred to this morning as the #2, and so I was just thinking, “Okay Keith, who won the race, the tortoise or the hare?”

Okay, so a cautionary note, which I find ironic as I’m the only lawyer, I think, presenting today and I have by far the shortest cautionary note. I think it’s because you can’t invest directly into LNG Canada - there’s probably a connection.

So a lot of people have set their presentations up this way and I’m no different, I’m going to talk about…why LNG? Why Canada? And why LNG Canada? And just as I introduce this, some of you are probably not as familiar with LNG as you might be with minerals and straight oil and gas, so I thought I would just put up some facts and helpful data points for you to understand.

There are a couple that I would highlight here, and actually one isn’t on there and I need to put it on for the next presentation. When natural gas is liquefied at 162 below Celsius, it condenses by 600 times. So when you see a LNG carrier you’ll see how massive a ship that is. So when you take that and you want to say what is the volume of actual consumable gas in that ship? Well, take the effective space that’s inside the cargo hold or carrier and multiply it by 600 times and that’s your volume.

If LNG Canada goes ahead as a project, it will take approximately 5 years to build start to finish. It will employ, during the construction phase, 16,000 people in the upstream and in the pipeline and in the plant itself. So you do that math and that’s 80,000 person years of employment.

Basically the travel time for a molecule which will be coming out of principally Northeastern BC to the time it hits a burner tip assuming its being shipped to Asia (and that’s the principle market but there are other markets for LNG but something coming on the Pacific is generally going to be headed to Asia where the largest consumers of LNG are) is approximately 12 to 13 days.

So why LNG? Well it’s the cleanest fossil fuel. Now I won’t take up a lot of time, at least in the presentation, talking about the merits of gas vs. oil or coal or any of the other conversations you could have about that, but it is the cleanest.

It’s safe. The LNG industry is about 50 years old. Shell developed the first technology and the first plant in the early 60’s and it’s been going for over 50 years with no accidents of any significance in terms of shipping or otherwise.

If I had a jar of LNG right here it would look like water and it would have a little boil off on the top so it would sort of look like dry ice too. And if I poured it on the rug it would make a sort of crackling sound and then about 10 seconds later there would be nothing – no stain, no wetness, nothing – because it’s gas and so it evaporates right? As soon as it’s touching something that warms it up it’s turning into a gas.

If I were to take a lit sparkler and throw it into the cargo hold of an LNG carrier, it would just do what water would do to it. It’s not going to explode because gas has an ignition point between 5 and 15% of gas to air mixture, which is where gas actually ignites . More than 15% is too rich and less than a 5% concentration of gas is too lean and it won’t ignite.

Gas is obviously plentiful, reliable and scalable. And here’s the thing I’d quickly like to point out: there are over a billion people in the world today that don’t have electricity. They don’t have the ability to walk into their hotel room or if you’re home tonight and flick on the switch and get electricity.

I think that’s something we all need to recognize and pay attention to as we’re considering and balancing very important other questions in the environmental space. There has to be, I think, a balance and I don’t think anybody has the right to deprive other people to have the kind of standard of living – or at least something close to it – that we enjoy. But that’s just me editorializing.

Why Canada? Well, it’s a G7 country with rule of law, public land tenure and fiscal stability and robust regulatory systems. All things that are all very attractive to someone if you’re talking about investing tens of billions of dollars…and that’s the number, tens of billions of dollars into an LNG plant and pipeline.

I’d like to talk about one thing in particular that’s up there – the export license. Until recently, Canada had the National Energy Board Act limiting the term that licenses could be granted for, for export of any kind and any way of natural resources or oil and gas whether it was by pipeline, truck, rail or anything. It was a 25 year export license and that was it.

In the current challenges of economics and given the massive upfront capital an LNG plant requires, those economics don’t necessarily work so well. So after some recent discussions with people in the Federal government because this is regulated by the Federal government, they saw the logic in the argument and so recently about 2 months ago announced that the legislation is going to be…well it has now been… amended to create the possibility – and not necessarily the guarantee because you still have to apply – but the possibility for an export license up to 40 years and that significantly enhances the viability of projects in Canada. So that was something that was well received by the industry.

Climate--I’d like to talk about that. What’s so great about climate? Well, remember the temperature of LNG, -162C, and so if you’re creating that LNG in Oman or Western Australia where they do have LNG liquefaction plants that are up and running and the ambient average temperature is between probably 35 degrees…imagine taking your freezer outside and sticking it in the sun in Phoenix and what would happen to your ice cream? Well it wouldn’t be as hard, right?

It’s the same principle; if you took the exact same plant and transplanted it from somewhere in the Middle East and put it into Kitimat--which I’ll talk about in a second--you can get about an average of 20% extra production just because of the climate you’re producing it in.

What are the challenges that Canada has? Well we’re remote, we’re northern and we don’t have a lot of…at least where our proposed location is going you don’t have the scale and size we need and you don’t have the same level of services we need. So the costs are higher for labor and materials.

Tax--it’s just a reality that the taxes in Canada, in terms of what’s happening both generally as well as in the LNG space, are higher and so that’s a challenge. Long distances between the basins and the upstream sources and the liquefaction plant are pipeline which is…our proposed pipeline, if built, will be built by Coastal Gas Link (a subsidiary of TransCanada) will be 670 kilometers long. You’d rather it be 6 kilometers long, but it’s not. It’s 670, and that increases the challenges.

Difficult terrain--you have to cross 2 mountain ranges with that pipeline. And you have a bunch of very complex and varied stakeholder interests, whether it’s governments, First Nations or local industry looking for employment opportunities. There are a lot of varied stakeholder interests at play and you want to do your absolute best to accommodate them all to the fullest extent you can.

So this is something I actually coined a little bit and I call it, “the gas revolution equation for Canada.” Keith was talking this morning about the (prolific natural gas formation in the US Northeast, ) Marcellus. The Marcellus is right there and there’s also another basin that it kind of overlaps called the Utica and those 2 basins (and I don’t know this for sure but I’ve read and heard a few times repeatedly) that those 2 basins between them contain in terms of reserves in place 500 trillion cubic feet of gas. Now that’s a massive, massive number. That’s enough gas to supply North America for longer than I can even think of.

As Keith also pointed out, those basins are being fitted with the necessary delivery of the pipelines and the delivery infrastructure and the processing facilities to be able to bring that gas to market.

So if Canadian markets have historically been where this light pink arrow is and the Marcellus is here and it’s coming on stream and part of the included costs for gas is the transportation (because that’s the one thing about natural gas: you have to keep it contained. So if the infrastructure and material costs are a material part of you doing business and you’re a closer upstream natural gas producer, you’ll be able to outcompete anybody on price if you’re delivering into a closer marketplace.

So Canadian gas is going to do exactly what and it’s already happening we were at 6:00 here in terms of the arrow and we’re now already at least at 7:30 or 8:00 and pretty soon it’s going to be pretty difficult for Canadian gas to compete with that massive quantity, and that’s only those 2 basins. You also have the Eagleford down here and there are others.

This is a reality that I think we all need to recognize and deal with. It’s a good thing for 2 types of companies. It’s a good thing for Granite (Oil) who has to buy make up gas and so they’ll like that and it’s a good thing for proposed LNG projects on the West Coast because your natural gas is your feedstock, it’s your product. If you’re in a supply chain raw environment where you’re doing transfer pricing all the way through, you actually want to buy your gas cheaply. For LNG projects, cheap gas is a good thing.

Then what an LNG project can also do is help stabilize prices and help to keep them from falling through the floor when there are basically no bids on the gas.

So why LNG Canada? First of all, it’s a powerful joint venture. There’s Shell, Kogas (Korea Gas Corporation), China Natural Petroleum and Mitsubishi, and all 4 are very experienced, very large and very knowledgeable in this space and you kind of have to be. Shell is the global leader in LNG worldwide and has the technology which I’ll get to in a second.

Secondly, one of the major differentiators in anything off the West Coast of British Columbia we learned very quickly as we were looking at this (and I’ve been on this project now for almost 5 years now), is location, location, location. Not every location is the same and they all have different pros and cons and Shell, believe it or not, in typical Shell overkill, when starting out looked at 570 sites up and down the coast.

The coast of British Columbia has 22,000 kilometers of coastline and Shell decided to start out at 570 and then after a few months of review basically created a short list of 10 and then did some boots on the ground and checked out others. Long story short, Shell picked this location in Kitimat as the perfect spot. And it is the best site in British Columbia by far.

One of the reasons it’s such a good site is because it’s so important in Canada, but especially I’d say in British Columbia, to do effective stakeholder engagement, especially with First Nations. As you can see here, we’re the blue dot right there and this is the Douglas Channel and we’re literally right at the cul de sac of the tip of the Douglas Channel. We are in the traditional territory of the Haisla First Nation, but as you follow any of the other lines on here you’ll see we’re only in the traditional territory of one First Nation, which is the Haisla.

Now our LNG carriers will go down the Douglas Channel and do a u-turn almost and go up through the Principe Channel and hit Prince Rupert and go out like that. So we’ll be going through the traditional territory of both the Gitga'at and Gitxaala and we are and regularly have been engaged and consulting with those 3 First Nation’s primarily but also with these others cause these are all listed in our environmental permits as the Section 11 First Nations. We’ve been doing that for pretty close to 4 years now.

And we now have signed Impact Benefit Agreements with both the Haisla and the Gitga'at and we’re currently negotiating and actually have a term sheet that was just signed with the Gitxaala but we’re not yet in the final agreement stage with them. But it’s a very positive relationship with all 3.

The 4th advantage is plentiful remote reserves; remote reserves that are otherwise stranded in a delivery system on a grid are actually a good thing for an LNG project. Most of our reserves are in the Montney and the Duvernay, and when I say ‘our’ it’s 3 out of the 4 joint venture participants or JVPs. Kogas has their gas up in here in the Cordova and all 4 at some point in time will take…we don’t have enough reserves for the full project at full build out so there will definitely be, especially if we go to our 2nd phase which is Trains 3 and 4 (and a train being a processing unit) and if we do that then we’ll be buying gas off the grid at wherever a sensible location is.

So that’s something that I think bodes well for the gas markets in BC and Alberta that I think otherwise will be, like I said, maybe in for some more difficult times then they’ve already been in.

And just to give you an idea of the size, the AECO hub trades on a daily basis approximately 15 billion cubic feet a day, which is basically more or less available in the pipes or the systems that the AECO hub represents for the Nova gas transmission.

If LNG Canada were to go to full build out and 4 trains, then we would be processing approximately just below 4 billion cubic feet a day, which is approximately 25% of the current available gas in pipe after processing in the entire Western Canadian Sedimentary Basin.

Advantage #5: shorter and technically simpler pipeline routes. Well, not shorter compared to some other places in the world but shorter compared to if you were taking this route here and going into Prince Rupert where some other projects are located. Our pipeline is probably about 150 kilometers or so shorter than other competitor pipelines, but also just as importantly it will run through a less environmentally sensitive area, one that’s easier to build in an environmentally sustainable and responsible way but also less challenging, so less expensive.

#6, which is an actual overhead of our location. This is an existing methanol terminal that we purchased 4 years ago from Cenovus who themselves bought it from Methanex. Then this is the existing Rio Tinto smelter that I’m sure many of you are familiar with and they’ve been there since the early 1950s. This is their wharf that we would option if we were to take FID. And this is the southwestern portion of the town of Kitimat.

It’s industrially zoned. It’s got an existing deep water wharf and so I like to call it a “partial brown field”. The reason I refer to it as brown field (and don’t quote me on that because it’s not a true brown field and some people would actually take issue with the use of that word), but it is a partial brown field because of the existence of that industrial area right there and it’s already built out. It’s not a full pure green field project.

Green fields are more expensive and they can be more controversial from a local stakeholder perspective because it’s green and undisturbed. We will do some disturbance in here and you saw the computer image of the project in a previous slide. Basically this will be the extent of our footprint right within this area and then a small line here for our cryogenic line which is the line that holds the cold liquid once it’s been processed.

The 7th and last advantage that I wanted to focus on is we have a best in class technology and emissions. The Shell double mixed refrigerant process is well known in the industry as sort of being the leader and top of class. And the thing that is actually really good about this project is we’re going to be supplying approximately 20% of our total power needs from BC Hydro, which is hydro power. So that, combined with the use of our LMS 100 turbines which are the industry leader in terms of greenhouse gas emissions, will mean that our plant will be approximately 50% of greenhouse gas emissions of the average LNG plant currently in operation today.

My last slide and I pointed out about the 16,000 jobs and the good news is that there are that many jobs and there are opportunities for people in trades to work, develop and get training. Concerns are that there are going to be perhaps competition for scarce labor. Canada does have, generally speaking, high turnover in construction plays and construction projects. So right now if there are more than 1 or 2 projects that go up there, there won’t be enough local labor but our project is absolutely committed to BC first, then Canada and then North America and then, if necessary, abroad.

Thank you very much and I’ll be happy to answer any questions."