Sequent Brochure

You’ve got a business to run.

Customers to serve.

Factories and power plants to operate.

Wells to produce.

Sequent has the natural gas answers you need.

For the transportation, storage, and delivery of wholesale natural gas supplies.

For optimum management of energy assets.

Utilities, municipalities, industrial users, power generators, retail aggregators, and producers east of the Rockies depend on Sequent Energy Management to deliver wholesale natural gas supplies to the right place, at the right time, for a competitive and responsible price. And they call on Sequent’s asset management services to make their energy assets work as hard as possible to reduce costs, maximize profit, and manage the risks inherent in today’s volatile energy marketplace.

Our clients depend on us.

For the physical resources to get the job done.

For the expertise to execute in their best interests.

For financial strength and solid credit ratings.

Sequent has a strong base of energy assets that stretches from the Rocky Mountains to the Eastern Seaboard, and we leverage these assets in our clients’ best interests. We manage more than 2 billion cubic feet per day (Bcf/day) of natural gas across all major pipelines east of the Rockies. We also control nearly 1 Bcf/day of firm transportation, and have access to over 50 Bcf of controlled gas storage, including liquefied natural gas (LNG) and propane (LPG).

Sequent’s senior managers average more than 20 years each in the energy business.

We know the markets, transportation logistics, risk management strategies, and financial instruments that can maximize the productivity of the natural gas supplies businesses depend on. We’ve proven our ability to design a variety of successful asset optimization programs, ranging from those with limited objectives to full asset management plans. Sequent’s expertise in the physical delivery of natural gas equips our clients with a key competitive advantage in the energy market.

A strong balance sheet makes Sequent a reliable and stable energy partner; investmentgrade credit ratings give us the resources and flexibility to handle large transactions and to customize physical and financial arrangements to meet the needs of our clients. Sequent Energy Management is a wholly owned subsidiary of Atlanta-based AGL Resources Inc., a regional energy holding company whose operations provide retail services to more than 2.2 million customers throughout the eastern United States.

Physical Volume Growth

Sequent makes physical natural gas delivery—catered

Since 2001, Sequent has expanded our physical nat-

specifically to meet our customers’ requirements—our

ural gas delivery from the Southeast to include a broad

primary focus. The natural gas industry has recognized

expanse of the eastern United States. This growth,

our strong asset base of firm transportation, storage, and

focused on the physical delivery of natural gas, posi-

gas supply by making Sequent the “first call” for many

tions Sequent as one of the top providers of wholesale

investor-owned utilities, municipal utilities, large indus-

natural gas in the United States.

trial customers, power generators, and other wholesale natural gas marketers.

Sequent leased storage or storage under Sequent management Pipelines ANR Pipeline Centerpoint Energy Columbia Gulf Pipeline Columbia Pipeline Dominion Transmission East Tennessee Pipeline Florida Gas Pipeline Great Lakes Gas Transmission Iroquois Gas Transmission National Fuel Gas Supply Natural Gas Pipeline Co. of America Northern Natural Gas Co. Panhandle Eastern Pipeline Sonat Pipeline Tennessee Gas Pipeline Texas Eastern Pipeline Texas Gas Pipeline Transco Pipeline Trunkline Gas Co. Viking Gas Transmission

Sequent Energy Management

p3

2.10 Average Daily Volumes (Bcf/day)

Physical Focus

1.75 1.39

0.26 2001

2002

2003

2004

Capabilities

Wholesale Trading

Risk Management

From our trading floor and headquarters on Houston’s energy row, Sequent maintains contact with more than 250 counterparties throughout the United States. To our wholesale trading partners, we deliver efficient execution of physical and financial products at most locations east of the Rockies.

Price protection.

Supply, Storage, and Transportation Clients depend on Sequent for a wide variety of logistical expertise, including • load balancing • peaking arrangements • city gate deliveries • spot and long-term supplies • a full range of transportation possibilities • stored energy alternatives

Security of supply.

Backup supply.

Inventory management.

The complexity and volatility of America’s energy markets create opportunities for businesses, but also risks.

When Sequent manages risk, locking in the best price is only a starting point.

We help companies analyze and make productive decisions about the rest of the critical issues: Is deliverability assured?

What backup plan has been considered?

Are there opportunities to benefit if the price goes up? Can adjustments be made to take advantage of new lower prices if the price goes down? Is there an opportunity to switch fuel sources?

Sequent also brings to the task a thorough understanding of how the tools of arbitrage, hedging, options, futures trading, contract flexibility, and alternative fuel choice can be used effectively to manage the dual risks all large energy users face: supply availability and acceptable prices.

Asset Management Asset optimization.

Commercial negotiation.

Inventory management.

Balancing energy assets for optimum performance requires experience, skill, vigilance, information, and access to physical assets. Sequent puts these capabilities to work for our clients, so they can navigate the volatile energy marketplace with confidence and focus more effort on their core business.

Two goals drive our asset management services: to help clients take advantage of energy market swings while preserving their ability to respond to future developments in the marketplace, and to help them manage storage and transportation assets for maximum profitability or maximum value to lower costs.

Custom-fit solutions are the only kind we offer because each of our clients brings a different set of circumstances, priorities, and challenges to the table.

Services and resources include • purchase and sale of significant physical volumes of natural gas or contracts for future delivery • management of capacity to capitalize on pipeline opportunities for transportation arbitrage • access to natural gas in numerous storage fields and to LNG and propane in storage • the skills, systems, and reporting mechanisms to effectively deliver industry-leading accounting and risk management support of all transactions • the expertise and assets needed for increasing natural gas deliverability

Sequent Energy Management

p5

Our clients have two things in common.

The transportation, storage, and delivery of natural gas is crucial to their business.

And each requires a custom-fit solution.

Utilities and Municipalities

Industrial Customers

Producers

Sequent brings to the table two important advantages/capabilities when we design delivery services for LDCs and municipalities: a detailed understanding of the state and federal regulatory environments in which they operate, and access to a firm gas supply at a variety of production area locations.

To the development of asset management plans, we bring a credit position strong enough to support large transactions, exceptional skills in natural gas delivery logistics, and a thorough understanding of the natural gas supply grid.

We can help LDCs get the most value for underutilized storage and firm transportation assets through superior market development upstream of the LDC’s city gate, and we can do so in ways that do not interfere with operations. Sequent’s logistical expertise can assure clients a least-cost dispatch of natural gas to their locations.

Sequent develops gas supply services for industrial customers that allow them to meet or beat budgeted costs for natural gas supplies. Energy market analysis and financial hedging of price exposure are often a part of these services. Our strong portfolio of firm transportation allows us to deliver gas directly to city gate or plant, so our customers can pay more attention to operational needs and less to the logistics of gas supply.

A substantial transport position across virtually all pipes serving the Gulf Coast, Mid-Continent, South, East, and Northeast supply regions, coupled with 2 Bcf/day or more of sales volume and investmentgrade credit quality, makes Sequent an ideal purchaser in today’s rapidly changing wholesale gas market. Supply aggregation and intra-day physical gas flow optimization means Sequent’s producers achieve market participation comparable to that of the energy industry’s largest players.

Sequent Energy Management

Power Generators Sequent’s physical resources mean we are equipped to deliver large volumes of natural gas on a moment’s notice. Full intra-day delivery capabilities position our client power generators to capitalize on hourly power market opportunities. Our large portfolio of firm transportation and storage provides power generators with optimal flexibility to call on natural gas only when they need it delivered, saving the expense of holding storage and transportation fixed costs in their own energy portfolio.

p7

Producer services include • commodity purchases • scheduling and nomination • risk management • gas supply, storage, and transportation options including load balancing, peaking arrangements, and city gate deliveries

Regional Retail Aggregators Sequent can help aggregators balance loads and develop long-term supply alternatives. We have the capability to make deliveries to the city gate of the aggregator’s customers through our strong portfolio of firm transportation, and the financial strength to offer creative credit solutions that enable aggregators to preserve capital to grow their businesses.

Sequent knows the challenges you face.

We are ready to supply the answers you need.

Sequent’s roots are firmly planted in the same ground as our clients.

We know the challenges our clients face because we’ve faced them ourselves: the nuts and bolts delivery of natural gas supplies to the right place at the right time for a competitive and responsible price, and the management of energy assets for cost reduction, profit maximization, and risk mitigation.

Our original charge in 2001 was to provide full asset management to regulated utilities serving more than a million customers in six southeastern states. We’ve grown enormously since that time. Today, Sequent participates in energy markets throughout the United States and serves clients in the Midwest, Northeast, and New England as well.

One on one is how we do business—meeting with you person to person to identify your needs and special circumstances. Call Sequent Energy Management today for • custom-fit solutions • up-to-the-minute market information • optimal energy delivery solutions

Two Allen Center 1200 Smith Street Suite 900 Houston, Texas 77002 Phone: (832) 397-1700 sequentenergy.com