Content

Strategy

EEP intends to increase its distributions primarily through the optimization of existing assets including increased throughput and the expansion of the existing liquids and gas midstream businesses, and potentially through the acquisition of complementary assets.

EEP is benefiting from strong supply growth in both the liquids transportation and gas midstream businesses. Oil sands volume growth will increase throughput and generate opportunities such as the Southern Access and Alberta Clipper expansions, described under Liquids Pipelines. Growing gas infrastructure needs, as a result of production growth and improved technology, are driving new capital investment and volume growth in EEP's principal gas regions. Tightening gas quality specifications are also increasing demand for EEP's treating and processing services. EEP's growing base of gas volumes has allowed it to aggregate volumes to improve margins and develop new take-away pipeline capacity projects.

In addition to the projects described under Liquids Pipelines, EEP is undertaking the following projects:

East Texas System Expansion and Extension (Project Clarity)

Project Clarity includes the construction of a 36-inch diameter pipeline to interstate and intrastate markets. This project is adding 0.7 bcf/d capacity to the current East Texas infrastructure. All phases of the project are complete with the exception of the Kountze, Texas to Orange, Texas stage which is expected to be completed in the first quarter of 2008. Additional capacity to downstream interconnects will increase as compression is added in mid-2008. When complete, the Clarity project will link growing natural gas production and third party storage assets in East Texas with major third party pipelines and markets in the Beaumont, Texas area.

North Dakota System Expansion

EEP is undertaking a further US$0.2 billion expansion of the Enbridge North Dakota Pipeline System. The expansion, if fully subscribed, is expected to increase system capacity from 110,000 bpd to 161,000 bpd by the end of 2009 and will consist of upgrades to existing pump stations, additional tankage as well as extensive use of drag reducing agents that are injected into the pipeline to increase throughput. The commercial structure for this expansion is a cost of service based surcharge that will be added to the existing tariff rates. Subject to approval from the FERC, this expansion is expected to be completed in early 2010.