ALLIANCE PIPELINE LIMITED PARTNERSHIP

ANNUAL INFORMATION FORM

For the Year Ended December 31, 2018

April 30, 2019

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TABLE OF CONTENTS

GLOSSARY OF TERMS .........................................................................................................................3

ABBREVIATIONS .................................................................................................................................9

FORWARD-LOOKING INFORMATION ................................................................................................ 10

CORPORATE STRUCTURE .................................................................................................................. 12

GENERAL DEVELOPMENT OF THE BUSINESS ...................................................................................... 12 General ................................................................................................................................................. 12 Recent Developments .......................................................................................................................... 14

DESCRIPTION OF THE BUSINESS ........................................................................................................ 16 The Alliance Pipeline System ................................................................................................................ 16

RISK FACTORS .................................................................................................................................. 30

DESCRIPTION OF CAPITAL STRUCTURE .............................................................................................. 43 Senior Notes and Senior Unsecured Notes .......................................................................................... 46 Ratings .................................................................................................................................................. 47 Bank Credit Facilities ............................................................................................................................ 47 Liquidity ................................................................................................................................................ 48

DISTRIBUTIONS ................................................................................................................................ 48 Cash Distributions ................................................................................................................................. 48 Distribution Policy ................................................................................................................................ 50 Distribution Limitations ........................................................................................................................ 50

MARKET FOR SECURITIES ................................................................................................................. 50

SECURITIES SUBJECT TO CONTRACTUAL RESTRICTIONS ON TRANSFER ............................................... 50

DIRECTORS AND OFFICERS ............................................................................................................... 51 Name, Occupation and Security Holdings ............................................................................................ 51 Conflicts of Interest .............................................................................................................................. 53

AUDIT COMMITTEE INFORMATION .................................................................................................. 53 Audit Committee Charter ..................................................................................................................... 53 Composition of the Audit Committee .................................................................................................. 54 Relevant Education and Experience ..................................................................................................... 54

CORPORATE GOVERNANCE DISCLOSURE .......................................................................................... 63 Board of Directors ................................................................................................................................ 63 Directorships ........................................................................................................................................ 63 Orientation and Continuing Education ................................................................................................. 63 Ethical Business Conduct ...................................................................................................................... 64 Nomination of Directors ....................................................................................................................... 64 Assessments ......................................................................................................................................... 64

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS ................................................................. 64

INTERESTS OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS ........................................ 64

AUDITORS, REGISTRAR AND TRANSFER AGENT ................................................................................. 65

MANAGEMENT CONTRACTS ............................................................................................................. 65

MATERIAL CONTRACTS .................................................................................................................... 65

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Common Agreement ............................................................................................................................ 66 Medium Term Note Indenture ............................................................................................................. 72

INTERESTS OF EXPERTS .................................................................................................................... 72

ADDITIONAL INFORMATION ............................................................................................................. 73

APPENDIX A AUDIT COMMITTEE CHARTER ..................................................................................... A-1

APPENDIX B ADDITIONAL DEFINITIONS USED IN MATERIAL CONTRACTS SECTION ........................... B-1

APPENDIX C CHANGE OF AUDITOR REPORTING PACKAGE .............................................................. C-1

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GLOSSARY OF TERMS

The following terms, when used in this Annual Information Form, have the meanings set forth below, unless otherwise indicated.

"Acceptable Credit Status" has the meaning ascribed thereto under the heading "Description of the Business - Shippers".

"ACE Hub" means the Alliance Chicago Exchange at the delivery header of the Alliance USA Pipeline where services are offered by Alliance USA.

"Administrative Services Agreement" means the Executive, Managerial and Administrative Services Agreement dated January 1, 2016 between Alliance Canada and Alliance USA.

"Affiliate(s)" means, as to any person, any other person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such person. For purposes of this definition, "control" of a person means the power, directly or indirectly, to either (i) vote securities having a majority of the ordinary voting power for the election of directors of such person, or (ii) direct or cause the direction of the management and policies of such person, whether by contract or otherwise.

"Alliance" means, together, Alliance Canada and Alliance USA.

"Alliance Canada" means Alliance Pipeline Limited Partnership, an Alberta limited partnership.

"Alliance Canada Pipeline" means the Canadian portion of the System.

"Alliance USA" means Alliance Pipeline L.P., a Delaware limited partnership.

"Alliance USA Pipeline" means the U.S. portion of the System.

"Amended and Restated Shareholders Agreement" means the unanimous shareholders agreement dated as of May 10, 1996 among the Canadian General Partner, Pembina Pipeline Corporation (as amalgamation successor to Veresen Energy Infrastructure Inc.) and Enbridge Income Partners L.P., as amended and restated effective as of December 31, 1998, as amended pursuant to extraordinary resolutions of the shareholders of the Canadian General Partner on April 20, 2000, March 22, 2001, September 20, 2002, April 29, 2003, April 23, 2004, March 9, 2005, January 1, 2011, February 24, 2011, January 1, 2014, February 27, 2014, and January 31, 2017, and as amended and restated effective June 25, 2018.

"Annual Information Form" means this annual information form.

"ATP" means Alliance Trading Pool.

"Audit Committee" has the meaning ascribed thereto under the heading "Audit Committee Information".

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"Aux Sable" means Aux Sable Extraction, the Aux Sable Extraction Facility and Aux Sable Liquid Products or any one or more of them as the context may require.

"Aux Sable Extraction" means Aux Sable Extraction L.P.

"Aux Sable Extraction Facility" has the meaning ascribed thereto under the heading "Description of the Business – The Alliance Pipeline System".

"Aux Sable Liquid Products" means Aux Sable Liquid Products L.P.

"Bakken" means the Bakken shale formation, which includes much of the Williston Basin and is primarily located in Montana, North Dakota, Saskatchewan and Manitoba.

"Canadian General Partner" means Alliance Pipeline Ltd., the general partner of Alliance Canada.

"Class A Units" means Units designated as Class A Units in the Limited Partnership Agreement.

"Class B Units" means Units designated as Class B Units in the Limited Partnership Agreement.

"Commercial Operation Services Agreement" means the commercial operations services agreement dated effective June 25, 2018 between Alliance Canada and the Pipeline Commercial Operator.

"Common Agreement" means the second amended and restated common agreement dated as of December 1, 2015 among Alliance Canada, Alliance USA, The Bank of Nova Scotia, National Bank of Canada, National Bank of Canada, New York Branch, National Bank Financial, Export Development Canada, The Bank of New York Mellon, BNY Trust Company of Canada, Deutsche Bank Trust Company Americas, Computershare Trust Company of Canada and the other lenders and lenders' representatives from time to time party thereto, setting out common provisions regarding the financing of the System pursuant to the Transaction Documents (as defined in Appendix B to this Annual Information Form).

"Construction and Operation Services Agreement" means the construction and operation services agreement dated effective June 25, 2018 between Alliance Canada and the Pipeline Physical Operator.

"Contracted Capacity" means the daily volume of natural gas which a Shipper has agreed to ship on the System on a firm basis or to pay reservation or demand charges in respect thereof, as set forth in its respective Transportation Contract.

"Credit Facility" means the $200 million revolving credit facility.

"DBRS" means DBRS Limited, DBRS, Inc., or DBRS Ratings Limited, as the case may be, or any of their successors.

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"DSCR" means the debt service coverage ratio, which for any period is the ratio of cash flows minus all operating costs for such period, divided by all scheduled debt service payable during such period;

"Enbridge" means Enbridge Inc. or its affiliates.

"FERC" means the United States Federal Energy Regulatory Commission or any successor or analogous U.S. federal governmental authority.

"Firm Capacity" means the volume of natural gas which Alliance Canada is contractually committed to transport on a firm service basis.

"GHG" has the meaning ascribed thereto under the heading "Description of the Business – Environmental".

"GP Board" means the board of directors of the Canadian General Partner.

"HCM Agreement" has the meaning ascribed thereto under the heading "Description of the Business – Aux Sable Extraction Facility".

"Heat Content Management Services" has the meaning ascribed thereto under the heading "Description of the Business – Aux Sable Extraction Facility".

"Investment Grade Rating" has the meaning ascribed thereto under the heading "Description of the Business – Shippers".

"Limited Partners" mean the limited partners of Alliance Canada, being Enbridge and Pembina.

"Limited Partnership Agreement" means the limited partnership agreement relating to Alliance Canada dated as of February 1, 1996, as amended and restated as of December 31, 1998, and further amended pursuant to extraordinary resolutions of the limited partners of Alliance Canada on February 20, 2001, September 20, 2002, May 23, 2003, June 24, 2003, June 30, 2003, February 15, 2012, an amending agreement dated December 19, 2017 and a transfer agreement dated December 20, 2017, and as amended and restated effective as of June 25, 2018.

"LTIP" has the meaning ascribed thereto under the heading "Statement of Executive Compensation – Compensation Discussion and Analysis – Long-Term Incentive Plan".

"Market Comparator Group" has the meaning ascribed thereto under the heading "Statement of Executive Compensation – Compensation Discussion and Analysis".

"Medium Term Note Indenture" has the meaning ascribed thereto under the heading "Description of Capital Structure – Senior Notes and Senior Unsecured Notes".

"MD&A" means Alliance Canada’s Management's Discussion and Analysis for the year ended December 31, 2018, an electronic copy of which is available on Alliance Canada's profile on the SEDAR website at www.sedar.com or at www.alliancepipeline.com.

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"Moody's" means Moody's Investors Service, Inc.

"Named Executive Officers" has the meaning ascribed thereto in Form 51-102F6, Statement of Executive Compensation – Venture Issuers.

"NEB" means the National Energy Board or any successor or analogous Canadian governmental authority.

"NEB Act" means the National Energy Board Act (Canada), as amended from time to time.

"NGLs" means natural gas liquids, including ethane, propane, butane, and condensate.

"NI 52-110" means National Instrument 52-110 - Audit Committees.

"NI 58-101" means National Instrument 58-101 - Disclosure of Corporate Governance Practices.

"NRGreen" has the meaning ascribed thereto under the heading "Description of the Business – NRGreen Power".

"Operating Agreements" means, collectively, the Commercial Operations Services Agreement and the Construction and Operation Services Agreement.

"Operators" means, together, the Pipeline Commercial Operator and the Pipeline Physical Operator.

"Owner-Operator Transition" has the meaning ascribed thereto under the heading "Corporate Structure – Recent Developments”.

"Pembina" means Pembina Pipeline Corporation or its affiliates.

"Performance Period" has the meaning ascribed thereto under the heading "Statement of Executive Compensation – Compensation Discussion and Analysis – Long-Term Incentive Plan".

"person" includes an individual, partnership, corporation, business, trust, joint stock company, limited liability company, trust, unincorporated association, joint venture, governmental authority or other entity of whatever nature.

"PHMSA" has the meaning ascribed thereto under the heading "Description of the Business – Pipeline Safety".

"Pipeline Commercial Operator" means Pembina Alliance North Inc.

"Pipeline Physical Operator" means Enbridge Alliance (Canada) Management Inc.

"Rate Base" means the Alliance Canada regulatory rate base, which includes, among other things: (i) actual capital costs, which includes costs that Alliance Canada actually and reasonably incurred in developing, designing, financing, constructing, commissioning, operating and maintaining the

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Alliance Canada Pipeline (including construction cost overruns); and (ii) an allowance for funds used during construction, under which Alliance Canada has capitalized, and hence is entitled to recover in tolls, and the net cost of funds (both debt and equity) required to finance the development and construction of the Alliance Canada Pipeline.

"S&P" means Standard & Poor's Services LLC (a division of the McGraw Hill Financial), or its successor. "SCADA" means supervisory control and data acquisition.

"SEDAR" means the System of Electronic Document Analysis and Retrieval of the Canadian Securities Administrators.

"Senior Note Indenture" means the indenture dated as of July 6, 1999 between Alliance Canada, as issuer, and The Trust Company of the Bank of Montreal, as trustee, as amended by the first supplemental indenture dated February 28, 2001, the second supplemental indenture dated October 30, 2002, the third supplemental indenture dated September 9, 2003, and the fourth supplemental indenture dated November 29, 2011.

"Senior Notes" means, collectively, the notes issued by Alliance Canada pursuant to the Senior Note Indenture.

"Senior Unsecured Notes" has the meaning ascribed thereto under the heading "Description of Capital Structure – Senior Notes and Senior Unsecured Notes".

"Services Offering" means the new tolls and services framework approved by the NEB for Alliance’s pipeline transportation services commencing December 1, 2015.

"SGER" has the meaning ascribed thereto under the heading "Description of the Business – Environmental".

"shippers" means Shippers, prospective shippers, and parties to an interruptible transportation service agreement with Alliance.

"Shippers" means, collectively, the oil and natural gas exploration, production, pipeline, aggregator, local distribution and marketing companies, partnerships, trusts or other entities that are parties to Transportation Contracts, and "Shipper" means any one of them.

"STIP" has the meaning ascribed thereto under the heading "Statement of Executive Compensation – Compensation Discussion and Analysis – Short-Term Incentive Plan".

"System" means the entire Alliance pipeline system of approximately 3,850 kms, including the approximately 3,000 kms high-pressure transmission pipeline that runs from northeastern British Columbia to Illinois, approximately 730 kms of lateral pipelines in Canada, the approximately 130 kms Tioga lateral, and related infrastructure.

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"Tioga Lateral" has the meaning ascribed thereto under the heading "General Development of the Business – Recent Developments".

"TPR" has the meaning ascribed thereto under the heading "Statement of Executive Compensation – Compensation Discussion and Analysis – Long-Term Incentive Plan".

"Transportation Contracts" means agreements for firm transportation service between Alliance and Shippers, and "Transportation Contract" means any such agreement.

"TSA" means the United States Department of Homeland Security – Transportation Security Administration.

"Units" mean the interests of the Limited Partners in Alliance Canada, as represented by units.

"U.S." or "United States" means the United States of America.

"USA Managing General Partner" means Alliance Pipeline Inc., the managing general partner of Alliance USA.

"WCSB" means the Western Canadian Sedimentary Basin.

All dollar amounts set forth in this Annual Information Form are in Canadian dollars unless otherwise indicated. References to "$" or "C$" are to Canadian dollars and references to "US$" are to U.S. dollars. On April 29, 2019, the daily exchange rate reported by the Bank of Canada, was C$1.00 equals US$0.7432.

Except where otherwise indicated, all information in this Annual Information Form is presented as at the end of Alliance's most recently completed financial year, being December 31, 2018.

A reference made in this Annual Information Form to other documents or to information or documents available on a website, does not constitute the incorporation by reference into this Annual Information Form of such other documents or such other information or documents available on such website unless otherwise stated.

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ABBREVIATIONS

In this Annual Information Form, the following abbreviations have the indicated meanings:

"bcf/d" means billion cubic feet per day;

"CO2e" means carbon dioxide equivalents;

"hp" means horsepower;

"km" means kilometre;

"mmcf/d" means million cubic feet per day; and

"MW" means megawatt.

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FORWARD-LOOKING INFORMATION

Certain information in this Annual Information Form is forward-looking and related to anticipated financial performance, events and strategies of Alliance Canada. The use of any of the words "estimate", "proposed", "forecast", "anticipate", "believe", "plan", "project", "intend", "may", "will", "could result", "target", "expect" and "continue" or similar words is intended to identify forward-looking information. All statements other than statements of historical fact are forward-looking statements. By their nature, these statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information.

In particular, this Annual Information Form contains forward-looking information pertaining to the following: (i) Alliance Canada’s ability to re-contract under the Services Offering; (ii) the timing, scope and nature of new contract offerings; (iii) the continued acceptance by the NEB of the tolls and tolling methodology of the Transportation Contracts Alliance has executed with its Shippers; (iv) continuing acceptance of Alliance Canada’s Services Offering; (v) Alliance's continued use, enhancement and/or replacement of its gas management system; (vi) the timing and effect of new climate change regulations in Canada and the United States, and the impact of such regulations on approved tolls; (vii) the expectation that costs associated with environmental requirements or abandonment will be recovered through transportation tolls; (viii) the continuing production of natural gas shipped on the System from the WCSB and the Bakken and the Appalachian basin; (ix) the proposed in-service dates of announced and current construction projects, planned outages and system capacity expansions; (x) the System’s ability to accommodate new receipt volumes with varied gas compositions; (xi) the potential impact of the ratification of the Canada United States Mexico Agreement; (xii) planned in-line investigations on the System and timing thereof; and (xiii) potential distributions to the Limited Partners.

The forward-looking information contained in this Annual Information Form is based on certain assumptions and analyses made by Alliance Canada in light of its experience and perception of historical trends, current conditions and expected future developments and other factors it believes are appropriate. The material factors and assumptions used to develop these forward-looking statements include: (i) Alliance Canada's operations, structure, financial position, and available credit facilities; (ii) Alliance Canada's assessment of commodity and currency markets; (iii) the markets and regulatory environment in which Alliance Canada operates; (iv) the state of capital markets; (v) management's analysis of applicable tax legislation; (vi) the assumption that the currently applicable and proposed tax laws and regulations will not change and will be implemented; and (vii) the performance of contractors and suppliers. Alliance Canada believes the assumptions reflected in the forward-looking information are reasonable, but no assurance can be given that the expectations based on these assumptions will prove to be correct.

Whether actual results, performance or achievements will conform to Alliance Canada's expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results to differ materially from Alliance Canada's expectations. Such risks and uncertainties include, but are not limited to, risks relating to (i) volatility of, and assumptions regarding, natural gas or NGLs prices, including substantial or

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extended decline of the same and their adverse effects on the operations and financial conditions of shippers, (ii) dependence on Shippers who may fail to perform their obligations under their respective Transportation Contracts; (iii) the continuing ability of Alliance Canada to obtain new transportation commitments after the expiry of the initial term of the Transportation Contracts under the Services Offering; (iv) the continuing approval by the NEB of Alliance Canada’s Services Offering; (v) dependence on the services provided by Aux Sable; (vi) competitive factors in the pipeline transportation services industry; (vii) changing levels of natural gas supply from the WCSB, the Bakken and the Appalachian basin; (viii) factors affecting the continued operation of the Alliance USA Pipeline; (ix) the continuous conduct of inspections and audits in respect of the System and the implementation of changes necessitated by such inspections and audits; (x) the breakdown or failure of equipment and facilities; (xi) the exposure of pipelines to terrorist attacks and exposure of information systems to cyber-attacks; (xii) changes in regulatory and government decisions including changes to environmental regulations and regulatory authorities; (xiii) changes in existing and proposed tax laws and other legislation in Canada and the United States; (xiv) adequacy of insurance; (xv) liquidity, and (xvi) any changes in regulatory requirements relating to the abandonment of the Alliance Canada Pipeline. See "Risk Factors".

The foregoing risks, assumptions and other factors should not be considered exhaustive. Readers are cautioned not to place undue reliance on forward-looking information as actual results could differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements. Forward-looking information is provided for the purpose of presenting information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. Except as required by law, Alliance Canada disclaims any intention and assumes no obligation to update any forward-looking information.

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CORPORATE STRUCTURE

Name, Address and Formation

Alliance Canada is a limited partnership formed under the Partnership Act (Alberta) on February 1, 1996 under the name "Alliance Pipeline Limited Partnership". The Canadian General Partner is the general partner of Alliance Canada. The head and registered office of both Alliance Canada and the Canadian General Partner is located at Suite 200, 425 – 1 Street S.W., Calgary, Alberta T2P 3L8. Alliance Canada is governed by the terms and conditions of the Limited Partnership Agreement. Alliance Canada has no subsidiaries.

As of the date of this Annual Information Form, Enbridge and Pembina, directly or through their respective Affiliates, each own 50% of Alliance Canada and the Canadian General Partner, and 50% of Alliance USA and the USA Managing General Partner.

GENERAL DEVELOPMENT OF THE BUSINESS

Alliance Pipeline System

General

The business objective of Alliance Canada is to provide to shippers competitively-priced, safe, reliable and efficient transportation of natural gas, including natural gas with entrained NGLs (i.e.,

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"rich gas") through the Alliance Canada Pipeline. Alliance transports natural gas to major markets in the midwestern United States and, via interconnections in the Chicago area, reaches other markets in the United States and eastern Canada. Alliance Canada believes that the System offers several advantages over other existing natural gas transportation systems, including:

(1) Market Connectivity

Alliance Canada Pipeline is in close proximity to significant natural gas production areas in northeastern British Columbia and northwestern Alberta, including liquids-rich plays such as the Montney and Duvernay. Production in this region, within a 40 km radius of the Alliance Canada Pipeline, has grown significantly driven by rich gas development. From 2014 to 2018, Alliance Canada added or approved for construction receipt points that provide for approximately 1.4 bcf/d of new receipt capacity from rich gas plays. Included in this amount for 2018, Alliance Canada connected 100 mmcf/d of new supply to the Alliance Canada Pipeline through one new receipt point interconnection in northwest Alberta. This interconnection called Glacier is currently waiting to be commissioned by the customer. The Alliance Trading Pool ("ATP") in the gathering area of Alliance Canada Pipeline has been a cleared trading point on ICE NGX Clearinghouse ("NGX") since December 1, 2015.

Alliance USA transports gas received from Alliance Canada as well as from the Bakken formation in North Dakota through its Tioga Lateral and the Bantry receipt point. Alliance USA has two long-term Transportation Contracts from the Bakken region in North Dakota: (i) one for 92.8 mmcf/d from the interconnection with the Prairie Rose pipeline at Bantry; and (ii) the other for 70.7 mmcf/d on the Tioga Lateral and Alliance USA Pipeline. If further development of the Bakken area results in increased requests from shippers, the Tioga Lateral and its associated facilities are designed to be expandable to provide additional capacity beyond its current nameplate capacity of 126 mmcf/d.

The liquidity of the Chicago market along with the associated takeaway capacity and diversity of pipeline connections have enabled Alliance USA to offer market hub services at its delivery header in the Chicago area to shippers ("ACE Hub services"). Since 2014, the Alliance Chicago Exchange market hub has been a cleared trading point on the NGX.

The delivery header has over 6 bcf/d of downstream natural gas delivery capability with major interstate pipelines as well as local gas distribution systems operating in the mid-western U.S. These interstate pipelines and local gas distribution systems supply residential, commercial and industrial customers, and have access to gas storage facilities.

(2) Competitiveness

Alliance Canada provides a unique solution for customers seeking to transport rich gas through its Services Offering for transportation services that commenced December 1, 2015. Key features of the Services Offering include competitive, long-term fixed tolls for full-path as well as segmented receipt and delivery transportation services that appeal to a diverse range of customers, and a Canadian trading pool, ATP.

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Alliance Canada received approval from the NEB to change the Hydrocarbon Dewpoint ("HCDP") gas quality tariff specification from -10 degrees Celsius to -5 degrees Celsius effective December 1, 2015. Similarly, Alliance US received approval from the FERC in 2015 to change the HCDP gas quality tariff specification from 14 degrees Fahrenheit to 23 degrees Fahrenheit effective December 1, 2015. Curtailment mechanisms are included in the tariffs to ensure that the pipeline operations and safety are not compromised. The HCDP specification change enhances shipper access to rich gas transportation and thus facilitates an increase in the NGL content of the gas Alliance transports for its shippers. In addition to this HCDP change, Alliance Canada also offers additional services that further enable shippers to optimize the heat content of their natural gas deliveries.

(3) Design and Operational Efficiency

Alliance’s pipeline service provides for the dense phase transmission of rich gas, which increases the efficiency of the System. As a result, Alliance Canada provides a unique solution for its Shippers as the only direct pipeline link from the WCSB to the midwest U.S. market for rich gas.

The System design provides an alternative for rich gas shippers looking to avoid building costly field extraction plants and reduce the time to market for their rich gas production.

In addition to long-term firm capacity, Alliance Canada has successfully contracted winter and summer seasonal firm contracts as well as short-term firm contracts, all through a bidding process, to capture the strong demand for its transportation services.

Recent Developments

2015 and 2016

In July 2015, the NEB issued its Reasons for Decision approving Alliance Canada’s Services Offerings tolls and tariff, subject to certain conditions, and a revised tariff was approved on a final basis by the NEB on July 21, 2016. Since 2016, Alliance Canada, through consultation with its shippers, has sought and obtained NEB approval of tariff modifications that have served to enhance its Service Offerings.

Similarly, in June 2015, the FERC issued an Order pursuant to which Alliance USA amended its tariff effective December 1, 2015, subject to the outcome of a subsequent hearing. In July 2016, Alliance USA filed a recourse rate settlement addressing all issues set for hearing by FERC. Although all of the rate elements of the settlement were uncontested, one issue relating to gas processing was disputed by two of the settling parties. In December 2016, the FERC issued an order approving the recourse rate provisions of the settlement but remanded the disputed gas processing issue back to the FERC judge for the purposes of conducting a hearing on that one matter.

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2017

In 2017, Alliance Canada posted and processed approximately 200 bidding windows and held nine open seasons where the term in the capacity offering was a month or greater. Alliance also successfully marketed available interruptible transportation service under a similar bidding process.

In October 2017, Alliance Canada conducted a month-long renewal window for contracts otherwise scheduled to end in October 2018. Approximately 281 mmcf/d of firm receipt service and firm full path service capacity was eligible for renewal. Similarly, approximately 309 mmcf/d of firm delivery service capacity and 385 mmcf/d of firm U.S. transportation capacity were eligible for renewal. All eligible contracts were renewed in accordance with the renewal rights of the respective Transportation Contracts.

2018

On March 27, 2018, Alliance announced that Enbridge and Pembina had decided to convert the operation and administration of Alliance into an owner-operator model, whereby Alliance’s business functions would be carried out by Enbridge and Pembina.

Effective June 25, 2018, Alliance completed its transition to an owner-operator model whereby affiliates of Enbridge and Pembina, as the operators, assumed responsibility to manage all Alliance functions (the “Owner-Operator Transition”) in accordance with the terms of the Operating Agreements. Effective June 25, 2018, the General Partner engaged affiliates of Enbridge under the terms of the Construction and Operations Services Agreement and affiliates of Pembina under the Commercial Operations Services Agreement to provide management, administrative, operational and workforce related services to Alliance. The Pipeline Physical Operator is an affiliate of Enbridge and the Pipeline Commercial Operator is an affiliate of Pembina.

In March 2018, Alliance USA reached an agreement-in-principle resolving the remaining FERC hearing issue related to the gas processing disputed in 2016. The resulting uncontested settlement was approved by the FERC in June 2018.

On March 28, 2018, in response to expression of interest from shippers for additional capacity, Alliance Canada issued a binding open season for additional firm transportation services from one or more designated receipt points to the point of interconnection between the Alliance Canada Pipeline and the Alliance USA Pipeline. On the same date, Alliance USA issued a similar binding open season for additional firm transportation services from one or more designated receipt points to one or more designated delivery points on the Alliance USA Pipeline. The expansion service would have been available primarily through incremental compression along the System to provide approximately 400 mmcf/d of additional capacity.

On June 15, 2018, Alliance announced that the binding commitments for the capacity expansion open season did not reach the targeted 400 mmcf/d of additional capacity. Based on the open

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season results and feedback from producers, Alliance is assessing potential alternatives and next steps.

In October 2018, Alliance Canada conducted a month-long renewal window for contracts otherwise scheduled to end in October 2019. Approximately, 205 mmcf/d of Firm Receipt Service and Firm Full Path Service capacity was eligible for renewal. Similarly, approximately 87 mmcf/d of Firm Delivery Service capacity and 137 mmcf/d of firm US Transportation capacity were eligible for renewal. All eligible contracts were renewed in accordance with the renewal rights of the respective contracts.

Developments to date in 2019

By Q2 2019, Alliance will complete the construction of two new interconnections at the upstream end of the System, thereby adding approximately 320 MMcf/d of new capacity. The new interconnections to be added in Northwestern Alberta are, Saskatoon Mountain (Q2 2019) and Wilson Ridge (Q2 2019).

DESCRIPTION OF THE BUSINESS

The Alliance Pipeline System

Construction of the System commenced in May 1999 and the System commenced commercial operations on December 1, 2000. The System includes an approximately 3,000 km integrated, high-pressure transmission pipeline, and a series of gathering laterals located in Western Canada and North Dakota, U.S., and related equipment such as compressor stations, meter stations, Block Valves, and communication and station control equipment. The System includes 14 mainline compressor stations that operate between approximately 31,000 hp and 46,000 hp each, spaced at approximately 193 km intervals. The facilities also include lateral compression facilities, meter stations and mainline block valves, spaced at 32 km intervals on average, and an associated SCADA system.

The System delivers rich gas through a high-pressure transmission service primarily from the WCSB to the Chicago area. The transportation of rich gas increases operating efficiency and delivers more energy to markets than a typical natural gas pipeline.

The Alliance Canada Pipeline consists of approximately 1,560 km of natural gas mainline pipeline and 730 km of related lateral pipelines connected to 59 receipt point locations (including 55 natural gas receipt point locations, primarily at gas processing facilities in northwestern Alberta and northeastern British Columbia, and four NGLs receipt points), and related infrastructure.

The Alliance USA Pipeline consists of an approximately 1,430 km natural gas mainline pipeline, the approximately 130 km Tioga Lateral in North Dakota, three receipt points (one at the international border, and two in North Dakota), 12 delivery points (three in North Dakota, one in Iowa and eight along the delivery header near Chicago) and related infrastructure owned by Alliance USA. The Alliance Canada Pipeline and the Alliance USA Pipeline are connected at the Canada-US border near Elmore, Saskatchewan and operate as an integrated pipeline system.

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The Alliance USA Pipeline connects near its terminus in the Chicago area with five interstate natural gas pipelines and two local natural gas distribution systems, which provide shippers with access to these and other major natural gas markets in the United States and eastern Canada.

The Alliance USA Pipeline also connects with an NGL extraction plant (the "Aux Sable Extraction Facility") in Channahon, Illinois near the terminus of the System. The Aux Sable Extraction Facility is one of the largest extraction and fractionation plants in North America and provides access to multiple NGL markets and distribution channels. All existing Alliance Canada shippers have signed extraction agreements that give Aux Sable the exclusive right to extract the NGLs from the rich gas transported on the System. The Aux Sable Extraction Facility is owned by Aux Sable Liquid Products, a related party of Alliance Canada. The System is also connected to three ethanol producing plants (two in North Dakota and one in Iowa) and a manufacturing plant in North Dakota.

A suite of services that leverages the System’s interconnections in the Chicago area to other pipelines and downstream markets is available at the ACE Hub. The ACE Hub services enable shippers and other market participants to access greater commercial liquidity and delivery flexibility in their transactions.

Shippers

As at December 31, 2018, Alliance Canada had 28 long-term firm Shippers, and Alliance USA had 19 long-term firm Shippers. As of December 31, 2018, the total quantity of firm transportation, including seasonal firm service with contract terms of one day to seven months, contracted was 1.524 bcf/d to the Canadian border and 1.620 bcf/d on the Alliance USA Pipeline. Firm Transportation Contracts are take-or-pay, and Shippers are obligated to pay demand charges on Contracted Capacity in Canada and reservation charges on Contracted Capacity in the U.S. In addition, Alliance sells Interruptible Transportation ("IT") service on a price-biddable basis. Long-term firm receipt and full path Shippers in Canada are also able to nominate Priority Interruptible Transportation Service ("PITS") for up to 25% of their contracted capacity, if available, at premiums to their long-term firm tolls.

As at December 31, 2018, no Shipper represented more than 26% of the firm transportation revenues on the Alliance Pipeline. The ten largest Shippers, in terms of transportation revenues, represent approximately 82% of the transportation revenues of the Alliance Canada Pipeline, and 84% of the Alliance USA Pipeline. Entities affiliated with Enbridge and entities affiliated with Pembina accounted for approximately 16% of the transportation revenues on the Alliance Canada Pipeline, and approximately 19% on the Alliance USA Pipeline for the year-ended December 31, 2018.

Credit

Alliance reviews the credit status of each Shipper at least quarterly and determines whether the Shipper or applicable guarantor possesses sufficient credit. Alliance and its Lenders (as defined in Appendix B) may release a Shipper from the requirement to post credit security if the Shipper

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obtains Acceptable Credit Status or an Investment Grade Rating. The credit status of each Shipper is classified into one of two categories:

(a) "Creditworthy" means a Shipper who either possesses an Investment Grade Rating or has Acceptable Credit Status. "Investment Grade Rating" means a Shipper, or its respective guarantors, if applicable, or a Shipper's senior unsecured securities, that has a credit rating of any of the following as applicable (i) "Baa3" or better from Moody's, (ii) "BBB-" or better from S&P, or (iii) "BBB" or better from DBRS. "Acceptable Credit Status" means a Shipper, or its respective guarantors, if applicable, that does not have an Investment Grade Rating, but is of sufficient financial strength that Alliance does not require such Shipper to post security for such Shipper's obligations to Alliance; or

(b) "Security Required" means Shippers that do not have an Investment Grade Rating or Acceptable Credit Status and have, in accordance with the terms of the Transportation Contracts, either posted security in the form of letters of credit equal to three months of demand and reservation charges, or have made other credit support arrangements satisfactory to Alliance and its Lenders (as defined in Appendix B).

The following is a summary percentage of contracted long-term firm revenue for Alliance Canada and Alliance USA and credit status of the Shippers, or their respective guarantors, as at December 31, 2018:

Alliance Canada Shipper

Number of Shippers

% of Contracted Long Term Revenue

Investment Grade Rating 6 25 Acceptable Credit Status 5 17 Security Required 17 58

Total 28 100

Alliance USA Shipper

Number of Shippers

% of Contracted Long Term Revenue

Investment Grade Rating 6 42 Acceptable Credit Status 3 4 Security Required 10 54

Total 19 100

Alliance also contracts firm transportation to shippers on a seasonal/short-term basis, which is not reflected in the long-term revenue numbers above.

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Transportation Contracts

Alliance Canada executed long-term firm Transportation Contracts that flowed an average Firm Capacity of 1.51 bcf/d in 2018 and had contracts in place to flow an average Firm Capacity of 1.35 bcf/d in 2019 as December 31, 2018. Alliance USA had executed long-term firm Transportation Contracts for Firm capacity of 1.59 bcf/d for 2018 and an average Firm Contracted capacity of 1.50 bcf/d for 2019, as of December 31, 2018. Alliance Pipeline is fully contracted for its available long-term Firm capacity through to the end of 2020 with some firm commitments that extend to October 31, 2025.

Regulation in Canada

The Alliance Canada Pipeline is subject to Canadian federal regulation by the NEB. The NEB exercises jurisdiction over the construction and operation of all international and interprovincial natural gas pipelines in Canada pursuant to the NEB Act. Under this legislation, the NEB has jurisdiction with respect to commercial aspects of Alliance Canada’s business, including in relation to toll and tariff matters, pipeline operations and the construction of new facilities.

Alliance Canada must comply with all laws and regulations regarding abandonment of the Alliance Canada Pipeline at the end of its economic life. The NEB directed that pipeline companies collect and set aside funds to cover future abandonment costs. The collected funds are deposited in an NEB-approved pipeline abandonment trust. Each of Alliance Canada's transportation services includes a pipeline abandonment surcharge designed to collect in aggregate $11.6 million on an annual basis. Following an NEB initiated review of abandonment cost estimates for all NEB-regulated pipelines, the NEB approved a revised abandonment cost estimate for Alliance on April 18, 2018. This in turn led to a redetermination of the annual abandonment collection amount that was approved by the NEB on October 24, 2018, resulting in an increase from the $10.9 million collection requirement in prior years to the current $11.6 million figure.

In February 2018, the Government of Canada introduced proposed legislation, which is presently undergoing final review by the Canadian Senate, that would replace the NEB with a new Canadian Energy Regulator. If approved, this new regulatory body would oversee pipeline operations, toll and tariff matters, and minor facility projects, while transferring regulatory assessment authority for major pipeline projects to a newly created Impact Assessment Agency of Canada.

Regulation in the United States

Alliance USA is regulated by the FERC as a "natural gas company" under the Natural Gas Act of 1938, as amended. Under such legislation, the FERC has jurisdiction over Alliance USA with respect to commercial aspects of its business, including transportation of natural gas, rates and charges, construction of new facilities, extension or abandonment of service and facilities, accounts and records, depreciation and amortization policies, the acquisition and disposition of

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facilities, the initiation and discontinuation of services, affiliate relationships and certain other matters.

In general, rates charged by interstate natural gas pipeline companies may not exceed the "just and reasonable" or "recourse" rates approved by the FERC, and natural gas pipeline companies are prohibited from granting any undue preference to any person or maintaining any unreasonable difference in their rates or terms and conditions of service. However, under a FERC policy in effect since 1996, a pipeline may obtain approval to charge negotiated rates which differ from (and may exceed) the FERC-regulated recourse rate. The FERC approved Alliance USA's proposal to offer shippers both negotiated and recourse rate options. Accordingly, Alliance USA's currently effective tariff contains both recourse rates and negotiated rates.

On July 18, 2018, the FERC issued an order requiring FERC-jurisdictional natural gas pipelines to file a one-time report to assist in determining which pipelines may be collecting unjust and unreasonable rates in light of FERC’s revised income tax policy and the December 2017 corporate income tax reduction. On November 28, 2018, FERC approved Alliance USA’s request to waive the filing requirement given the currently effective rate settlement agreement.

Tolls and Tariff Structure Effective December 1, 2015, all of Alliance Canada’s long-term Shippers pay NEB-approved fixed tolls in accordance with the service and term selected. Seasonal/short-term firm service and interruptible service shippers pay tolls established through a bidding mechanism. Effective December 1, 2015, most of Alliance USA’s Shippers have chosen to be governed by fixed negotiated rates under their respective Transportation Contracts. Some shorter-term firm services and all interruptible services have been contracted in accordance with Alliance’s recourse rate provisions. All Shippers are required to provide fuel-in-kind based on annual fixed fuel rates by service type. The fuel rates are adjusted annually on an actual tracked and trued-up basis. Technical Description of the Alliance Pipeline System

The Mainline Pipeline

The pipe used for the Alliance Canada Pipeline was manufactured using low carbon alloy steel, with controlled rolling practices used to improve strength, ductility, weldability and toughness. All piping and appurtenances were coated externally for corrosion protection and internally to reduce friction. A cathodic protection system was installed to protect against corrosion for the operating life of the Alliance Canada Pipeline.

The Alliance USA Pipeline was constructed with characteristics similar to the Alliance Canada Pipeline. Like the Alliance Canada Pipeline, the Alliance USA Pipeline has a cathodic protection

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system installed, has been coated externally to prevent corrosion and internally to reduce friction. U.S. regulations call for different requirements in calculating the maximum stress levels compared to Canadian regulations; therefore, the pipe wall thicknesses used in the Alliance USA Pipeline are slightly thicker than those used in the Alliance Canada Pipeline.

Interconnecting Pipelines and Local Distribution Companies

The System interconnects at its terminus in the Chicago area with the following five interstate natural gas pipelines: (i) ANR Pipeline Company (a subsidiary of TransCanada Corporation); (ii) Midwestern Gas Transmission Company (a subsidiary of ONEOK Partners, L.P.); (iii) Natural Gas Pipeline Company of America (a subsidiary of Kinder Morgan, Inc.); (iv) Vector Pipeline L.P. (an indirect subsidiary of Enbridge); and (v) Guardian Pipeline L.L.C. (a subsidiary of ONEOK Partners, L.P.). The System connects with the following two local natural gas distribution systems: (i) NICOR Gas (a subsidiary of AGL Resources Inc.); and (ii) Peoples Gas (a subsidiary of Integrys Energy Group). These pipelines and local distribution systems serve major natural gas consuming areas in the midwestern United States and Ontario. Connection to these pipelines provides shippers with access to other major natural gas markets in the northeastern United States and eastern Canada. The current downstream natural gas receipt capability of these pipelines and local distribution systems in the Chicago area exceeds 6 bcf/d. The System also connects with the Aux Sable Extraction Facility and has four upstream delivery connections to ethanol producing plants owned and operated separately by three independent ethanol producers as well as an Industrial Manufacturer.

Operations and Maintenance

Effective June 25, 2018, the Pipeline Physical Operator operates and maintains the Alliance Canada Pipeline and the Alliance USA Pipeline. Prior to that time, the Canadian General Partner and the USA Managing General Partner operated and maintained the Alliance Canada Pipeline and the Alliance USA Pipeline, respectively. The Pipeline Physical Operator maintains the requisite permits to ensure the continued operation of the System. Alliance Canada has entered into the Construction and Operation Services Agreement to have the Pipeline Physical Operator manage the operations and maintenance of the System. In addition, Alliance USA has contracted with Alliance Canada to provide certain managerial and administrative support pursuant to the Administrative Services Agreement.

Alliance Canada and Alliance USA had entered into agreements with an original equipment manufacturer ("OEM") and its affiliate to provide for maintenance services for the System's mainline compressors. As of January 1, 2018, Alliance Canada and Alliance USA have entered into limited service agreements with the OEM for a further two-year period, expiring December 31, 2019. Alliance is evaluating the possibility of entering into a further agreement with the OEM, with a decision to be made later in 2019.

The System is remotely monitored, including by video, and operated from a main control centre located in Alberta. Control centre operators have the ability to remotely adjust operating parameters and shut down or start up individual stations or facilities on the System. Facilities

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monitored and operated from this control centre include receipt stations, compressor stations, delivery stations and mainline block valves. In addition, all facilities have local controls, which include emergency shutdown capabilities. A back-up control centre has also been established in a different location. Alliance utilizes a satellite communications system for data transmission to and from its remote facilities and the main and back-up control centres. The satellite system is backed up by land lines to key remote facilities. All major compressor station equipment integrity is monitored via on-site control systems that monitor sensors for parameters such as temperature, pressure and vibration. Compressor station equipment performance is monitored and controlled by an automated, station-sited programmable logic control system. Each compressor station is designed to be unmanned but is monitored and operated on a continuous year-round basis from the main control centre. Alliance's gas management system ("GMS") is a critical element of the System's operations. It meets both business and regulatory requirements by providing functionality which includes contract management, customer account management, capacity release/allocation, nomination entry, scheduling, confirmation and allocation, imbalance management, title transfers, wheeling, park and loan transactions, invoicing, and reporting.

In December 2018, Alliance notified its shippers that the Alliance USA pipeline system would require a complete shutdown to enable repairs to the pipeline in Iowa and Illinois. The outage is expected to be four days in duration starting June 18, 2019. No transportation services will be available on Alliance USA during this period. The curtailment of service on the Alliance USA system will constitute an event of Force Majeure on the Alliance Canada system in accordance with the Alliance Canada Tariff. To enhance efficiency, Alliance plans to combine other operating, maintenance and project work into this outage and reduce the need for other planned outages. Pipeline Safety

Natural gas pipelines in Canada are required to meet construction, operating and maintenance standards established by the NEB, other federal regulators and the Canadian Standards Association. Natural gas pipelines in the United States are required to meet construction, operation and maintenance regulations established by the United States Department of Transportation Pipeline and Hazardous Materials Safety Administration ("PHMSA") and standards established by the FERC.

The Alliance Canada Pipeline is subject to the NEB’s Onshore Pipeline Regulations and CSA Z662 Oil and Gas Pipeline Systems standard. The Onshore Pipeline Regulations concern the design, construction, operation and abandonment of pipelines within the jurisdiction of the NEB. CSA Z662 Oil and Gas Pipeline Systems is a consensus standard administered by the Canadian Standards Association with ongoing participation from regulators, industry, suppliers and engineering consultants. Alliance Canada has implemented practices and procedures common in the pipeline industry and necessary to meet applicable laws in all material respects.

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The Alliance USA Pipeline is subject to PHMSA regulations (Title 49, CFR 191, 192 ,195 and 199) promulgated under the United States Natural Gas Pipeline Safety Act of 1969, as amended. Alliance maintains and follows required plans, procedures and specifications written in compliance with these regulations for the design, construction, operation and maintenance of the Alliance USA Pipeline, including emergency response, employee qualifications, integrity programs, public awareness programs, control room management and drug and alcohol testing.

Alliance Canada conducted routine internal safety and security inspections at its compression facilities in 2018 with corrective actions being identified and addressed as appropriate. The NEB also conducted safety inspections at certain Alliance Canada locations with no material findings resulting. Alliance Canada’s owners, Enbridge and Pembina, are members of the Canadian Energy Pipeline Association ("CEPA") and committed to CEPA’s “Integrity First” program. Alliance conducts ongoing due diligence reviews regarding its Protection Program plans, practices and procedures, using a three-year minimum review cycle.

In response to the NEB operational audit conducted in 2015, Alliance submitted a corrective action plan to the NEB at the end of March 2016. In 2017, Alliance continued to implement the NEB corrective actions and build out the protection programs to support the Alliance Integrated Management System.

The NEB performed a detailed Integrity Audit of the Alliance Pipeline assets with Enbridge in the fourth quarter of 2018. The audit findings suggested some improvements within the management system regarding hazards, risks and surveillance and monitoring programs. Enbridge has completed and submitted an Alliance corrective and preventive action plan (CAPA) to the NEB to address these findings. In 2019, Alliance is transitioning from the Alliance Integrated Management System to the Enbridge Integrated Management System.

As part of the transition to the Alliance Integrated Management System, Alliance is integrating physical, cyber and information management security into its Security Management Program ("Program"). The Program overview was complete in 2016 and the Integrated Security Program was developed and implemented in 2017.

Regular maintenance is performed on all portions of the Alliance pipeline system in accordance with industry and government standards. Regular maintenance includes, but is not limited to, inspections and tests of corrosion control systems, pressure control and overpressure protection, shut off valves, gas detection, emergency shutdown devices, and leak surveys and aerial patrols. In addition to complying with normal operations and maintenance requirements in both Canada and the U.S., Alliance has rigorous integrity management programs in which in-line inspection ("ILI") tools are used to assess the condition of the System. In 2018, Alliance initiated the fourth cycle of in-line inspections of the Canadian and U.S. mainline and lateral systems. The frequency of these assessments is based on a detailed evaluation of risk, the not-to-exceed maximum intervals established under current Canadian and U.S. regulations, and on conditions contained within the waiver granted to increase the maximum allowable operating pressure in the U.S. by PHMSA in July 2006. Investigative programs to validate the ILI technology performance have been conducted since the first cycle of ILI runs were performed. Additional investigations will be

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performed on the basis of the results of the fourth round of ILI. Alliance has excavated and examined the pipe and coating condition at several locations and on a range of pipeline segment diameters. As at the date hereof, no material anomalies requiring immediate pipe repair or replacement have been found in either the Alliance Canada Pipeline or the Alliance USA Pipeline, other than as previously discussed above.

Environmental

Several design features of the Alliance System make it more efficient than older, conventional designs of natural gas pipelines. However, greenhouse gas ("GHG") emissions are created during the combustion of the natural gas in turbines to drive compressors that move natural gas through the System. Although the GHG emissions have been reduced by using high efficiency gas turbines, the emissions from the System still exceed the emissions limit calculated under Alberta's new Carbon Competitiveness Incentive Regulation ("CCIR"), which replaced Alberta’s Specified Gas Emitters Regulation ("SGER") in January 2018. Under the CCIR, facilities that annually emit more than 100,000 tonnes of CO2e are subject to emission reduction requirements. Given that the Alliance Canada Pipeline already uses efficient turbines, attaining further emission reductions at the source is challenging and Alliance Canada's remaining compliance options to meet its required emission reduction target are to purchase credits from the Alberta Climate Change Fund for $30.00 per credit (1 credit = 1 tonne of CO2e emission reductions) or to purchase offsets from qualified projects. The cost to purchase the necessary credits for 2016 was $2.9 million. The cost to purchase the necessary credits for 2017 was $4.4 million. The cost to purchase the necessary credits for 2018 was $3.8 million.

British Columbia implemented the Carbon Tax Act in 2008, which taxes consumption of all fuel sources in the province. Alliance Canada’s facilities in British Columbia are subject to this tax. The cost related to 2017 amounted to $0.6 million. The cost related to 2018 amounted to $0.6 million.

In October 2016, the Federal Government passed a motion in the House of Commons to introduce a carbon pricing mechanism in accordance with the Paris Climate Agreement. The motion included a requirement for minimum carbon pricing in all jurisdictions in Canada by 2018. The minimum price on carbon emissions was set at $10 per tonne in 2018, rising by $10 a year for the next four years, reaching $50 per tonne in 2022. Provinces are free to implement their own carbon plan; however, the provincial plans must meet the federal minimum price, or the federal government will impose a levy that makes up the difference.

The operations of Alliance Canada are subject to federal, provincial and local laws and regulations relating to the protection of the environment. Alliance Canada believes that adequate measures have been taken to mitigate the environmental effects of the operation and maintenance of the Alliance Canada Pipeline. Alliance conducts regular inspections of its facilities, allows pertinent agency inspections as required, and follows defined practices to ensure that regulatory requirements and commitments are met during the construction, operation, and maintenance of its facilities.

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Insurance

Alliance maintains insurance that is consistent with prudent pipeline practice and applicable law for natural gas transmission systems of a similar size and nature. The insurance coverage obtained with respect to the System is subject to limits and exclusions or limitations on coverage that Alliance considers reasonable given the cost of procuring insurance and current operating conditions.

Competition

The System faces competition in pipeline transportation to its Chicago area delivery points and interconnected pipeline delivery points downstream of its Chicago terminus from both existing pipelines and proposed projects.

Alliance expects that substantially all of the natural gas shipped on the System for the foreseeable future will be produced from the WCSB and the Bakken formation in North Dakota. Continued sales of WCSB and Bakken natural gas by Alliance’s Shippers in the U.S. Midwest and to other parts of the United States and eastern Canada will be dependent on a number of factors over which Alliance has no control, including:

(i) the level of exploration, drilling, reserves and production of WCSB and Bakken natural gas and the price of such natural gas;

(ii) the accessibility of WCSB and Bakken natural gas, as such may be affected by weather, natural disasters or other impediments to access;

(iii) the price and quantity of natural gas available from alternative United States, Canadian and international sources, and the differential in market demand for natural gas in western Canada and the U.S. Midwest;

(iv) the market demand for natural gas in North America;

(v) the market demand for natural gas (including liquefied natural gas) exported from North America;

(vi) the impact of domestic demand on the availability of WCSB natural gas for export; and

(vii) regulatory environments in the United States and Canada, including the continued willingness of both countries to permit the export of natural gas from Canada into the United States on a commercially acceptable basis.

A number of other natural gas pipelines currently provide, and potential future natural gas pipelines may provide, transportation services for natural gas produced from the WCSB and the Bakken to natural gas markets in the midwestern United States and Ontario. Such pipelines, existing and proposed, constitute current and potential competitors to the System. In addition

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to the System, natural gas from the WCSB is currently transported to markets in the midwestern United States through the following pipelines:

• TransCanada/Viking Gas Pipeline;

• TransCanada/Great Lakes Pipeline; and

• TransCanada/Foothills/Northern Border Pipeline.

Alliance and its Shippers are also exposed to competition from new sources of natural gas such as the Permian and DJ basins, as well as the Marcellus/Utica plays in the Appalachian basin. Producers from these locations have also built or have proposed to build, repurpose or expand natural gas pipelines that would deliver natural gas into the midwestern and eastern United States. Such pipelines may compete against the System in the future. The Marcellus and Utica plays in particular are in close proximity to the Chicago Hub to which the Alliance Pipeline currently provides the majority of its transportation service. The continued development of these plays has and could further provide an alternate source of gas to this location and further decrease natural gas imports from Canada into the northeastern region of the U.S. Two new interstate pipelines were substantially constructed through 2017 and 2018 that are designed to deliver volumes to Vector Pipeline thus sending substantial incremental volumes to markets in central Canada. The majority of Alliance volumes delivered to Chicago previously moved on to Vector, but with the construction of these two pipelines, a majority of Alliance volumes now moves to markets in the US Midwest via alternate pipelines. The overall Alliance delivery levels have been maintained as these two pipelines came into service.

Based on tolls and rates currently filed with the respective regulatory authorities, management believes Alliance's tolls and rates are competitive in each of the above markets; however, changes to the costs of service or rates and/or discounted tolls of any of these pipelines, or new competition from any future pipeline may affect Alliance's competitiveness. In addition, emerging technologies could enable gas plays that are not currently commercially viable or accessible, to be competitive in the marketplace that the Alliance Pipeline serves.

Any new or upgraded pipelines could offer natural gas transportation services that may be more desirable to shippers than those provided by the System because of location, facilities or other factors. In addition, these pipelines could charge rates or provide attractive service to locations that result in greater net profit for shippers, which may result in a decrease to revenues and cash flow for Alliance.

Any project to expand the System could be subject to competition from other pipeline systems which could be expanded or integrated to serve the market for shipping natural gas from the WCSB and the Bakken to the midwestern and eastern United States and eastern Canada.

From time to time, Alliance has short term capacity available, above its long-term firm capacity levels, that is offered to the market on an interruptible or seasonal/short-term firm basis. This

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capacity would be expected to have greater exposure to competition risk than Alliance’s long-term firm capacity.

Outlook

Current market dynamics and increased rich gas development and/or supply from unconventional developments are key growth drivers for Alliance Canada, particularly given the System’s significant and unique rich gas carrying capability. In addition to addressing egress issues faced by many Western Canadian Sedimentary Basin producers, the Alliance pipeline system is a reliable connection to the vital US Midwest market, which offers new market access and diversification options beyond western Canada.

Alliance Canada has re-contracted approximately 96% of its available year-round delivery capacity through the end of October 2020. The advantages of the Alliance System resulted in a successful re-contracting campaign where receipt capacity on Alliance Canada has an average contract term of approximately three years remaining as at December 31, 2018. A 2017 capacity offering on Alliance Canada for firm delivery service was fully subscribed with terms extending to October 31, 2025. Offerings of seasonal firm capacity and interruptible transportation are expected to be fully utilized as demand for Alliance’s transportation services continues to exceed available capacity.

Employees

As at December 31, 2018, due to the completion of the Owner-Operator Transition, the Canadian General Partner and the USA Managing General Partner do not have any employees. Effective June 25, 2018, pursuant to the terms of the Operating Agreements, the General Partner engaged affiliates of Enbridge and Pembina to provide management, administrative, operational and workforce related services to Alliance.

Legal Proceedings and Regulatory Actions

On May 11, 2016, JL Energy Transportation Inc. ("JL Energy") filed a Statement of Claim in the Alberta Court of Queen’s Bench against Alliance Canada, the Canadian General Partner, Alliance USA, the USA Managing General Partner, (together, the "Alliance Defendants") and certain other defendants (the Alliance Defendants and other defendants are, collectively, the "Defendants") alleging that the Defendants violated a technology licensing agreement with JL Energy and infringed a patent owned by JL Energy concerning certain technology (the "Technology") for the injection of natural gas mixtures for the purpose of increasing hydraulic efficiency. JL Energy claims entitlement to the entirety of revenues obtained by the Defendants through the alleged improper use of the Technology in the amount of $638,400,000, or the entirety of the profits obtained by the Defendants through the alleged improper use of the Technology in the amount of $195,125,000.

The Alliance Defendants filed a defence to the claim asserting that they do not use the Technology, have not violated the terms of any agreements with JL Energy, and have not

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infringed any patents owned by JL Energy. The Alliance Defendants further assert that the claims of JL Energy are barred by the passage of the applicable limitation periods, and that JL Energy, in fact, suffered no damages. The Alliance Defendants seek to have the claims of JL Energy dismissed in their entireties. The Alliance Defendants have filed an application to strike many portions of the JL Energy claim and to stay the balance of the claim pending the outcome of a Federal Court patent impeachment action brought by third parties against JL Energy. The Federal Court trial commenced on March 11, 2019 and all oral submissions were completed in the first quarter of 2019. Alliance takes the position that this claim is without merit, and that JL Energy’s likelihood of success at trial is remote at best.

In August 2015, Alliance experienced a short-term shutdown of its mainline pipeline due to the entry of hydrogen sulfide ("H2S") in excess of concentrations specified in Alliance’s tariff into the pipeline from an upstream operator. Alliance is pursuing its legal options to recover its costs related to the August 2015 H2S event and short-term shut down. No other material legal proceedings are known to Alliance Canada to be contemplated.

During the year ended December 31, 2018, there have been (i) no penalties or sanctions imposed against Alliance Canada by a court relating to securities legislation or by a securities regulatory authority, (ii) no other penalties or sanctions imposed by a court or regulatory authority against Alliance Canada that would likely be considered important to a reasonable investor in making an investment decision, and (iii) no settlement agreements that Alliance Canada has entered into before a court relating to securities legislation or with a securities regulatory authority.

Aux Sable Extraction Facility

The System is designed to permit the transportation of rich gas which may then be processed for the extraction of NGLs at the Chicago area terminus of the System. Aux Sable Extraction owns the Aux Sable Extraction Facility in Channahon, Illinois, near the terminus of the System, and Aux Sable Liquid Products owns the fractionation facilities. Aux Sable Liquid Products operates the Aux Sable Extraction Facility, which is a two-train facility designed to process up to 2.1 bcf/d of natural gas, on behalf of Aux Sable Extraction. Aux Sable Extraction is, directly and indirectly, wholly owned by Aux Sable Liquid Products. Aux Sable Liquid Products is owned either directly or indirectly by the entities set out below:

Name of Entity Ownership (%)

Enbridge 42.698 Pembina 42.698 The Williams Companies, Inc. 14.604

Total 100.000

Enbridge and Pembina are not under any continuing obligation to maintain any direct or indirect ownership interest of Aux Sable Liquid Products. Pursuant to extraction agreements entered into between each of the Shippers and Aux Sable Liquid Products, Aux Sable Liquid Products has the sole and exclusive right which, if exercised, allows it to extract and take title to NGLs from Shippers' natural gas. In return, Aux Sable Extraction has an obligation to compensate Shippers

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for any NGLs so extracted by replacing such NGLs with "make-up" natural gas having a heat content equal to the heat content removed as a result of the extraction of such NGLs.

In connection with these extraction arrangements, Aux Sable Liquid Products and Aux Sable Extraction have entered into a Restated Heat Content Management Agreement made as of December 1, 2015 (the "HCM Agreement") with Alliance USA. Aux Sable has also entered into a Restated Extraction Facility Interconnection Agreement dated August 1, 2000 with Alliance USA which deals with technical matters relating to the interconnection of the Alliance USA Pipeline with the Aux Sable Extraction Facility. Under the terms of the HCM Agreement, Aux Sable Extraction has agreed with Alliance USA, subject to certain exceptions and limitations, to provide heat content management services (the "Heat Content Management Services") involving the extraction of NGLs to the extent required to reduce the gross heating value of the natural gas being delivered out of the System downstream of the Aux Sable Extraction Facility to a heating value that may be acceptable to the two local natural gas distribution systems and five interstate natural gas pipelines with which Alliance USA presently has delivery interconnection agreements. Under certain circumstances, if Aux Sable Extraction fails to perform the Heat Content Management Services, Alliance USA may itself perform or cause the performance of such services. Although the Heat Content Management Services are provided primarily through the extraction of NGLs, Aux Sable Extraction also has the option to implement alternative heat content reduction arrangements should it so elect.

NRGreen Power

NRGreen Power Limited Partnership ("NRGreen") is an entity related to Alliance Canada by virtue of being indirectly owned by a common ownership group. NRGreen produces electricity generated by harnessing and converting to electrical energy the waste heat produced by certain of Alliance Canada's gas turbines. As part of these operations, NRGreen and Alliance Canada have entered into agreements with respect to waste heat supply, manpower services, and compressor site access.

Dealings with related parties

The Executive, Managerial, and Administrative services agreement allows Alliance Canada to provide or receive services to or from Alliance USA, an entity related by virtue of a common ownership group, in exchange for reimbursement of incurred costs plus an applicable mark-up. Certain amounts reimbursed under this agreement also include a recovery of costs, plus an applicable mark-up, relating to the use of common administrative assets. Amounts charged to Alliance USA under the Agreement for the year ended December 31, 2018 were $38.8 million (December 31, 2017 - $45.0 million), while amounts charged by Alliance USA under the Agreement for the year ended December 31, 2018 were $3.7 million (December 31, 2017 – $3.5 million).

From time to time, Alliance Canada sells operational linepack to Alliance USA to supplement operational line pack or as fuel gas to support the efficient operation of the pipeline. The terms

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of these purchase transactions are the same as those that would be associated with purchases made from independent third parties.

The Operators provide management, administrative, operational and workforce related services to Alliance pursuant to the terms of the Limited Partnership Agreement and is reimbursed for the cost of these services in accordance with the terms of such agreement. Services are invoiced and settled on a monthly basis. The Canadian General Partner does not record any profit or margin for the services charged to Alliance Canada.

On September 13, 2011, Alliance executed an Offset Purchase Agreement to purchase offset credits from NRGreen. In 2017 and 2018, Alliance purchased available offset credits from NRGreen under the terms of the Offset Purchase Agreement.

During the year, Alliance Canada engaged a related entity to assess the commercial feasibility to increase throughput by adding more compression facilities along the pipeline. All amounts incurred to date are presented as operating and maintenance.

RISK FACTORS

The following information is a summary only of certain risk factors relating to Alliance Canada and is qualified in its entirety by reference to, and must be read in conjunction with, the detailed information appearing elsewhere in this Annual Information Form. Certain statements in this Annual Information Form that are not historical facts constitute "forward-looking statements". Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Alliance Canada's actual results to differ materially from results expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors include, but are not limited to, the matters described below.

Pipeline Operating Risks

Operational risks include, but are not limited to: pipeline leaks; the breakdown or failure of equipment, pipelines and facilities, information systems or processes; the compromise of information and control systems; the performance of equipment at levels below those originally intended (whether due to misuse, unexpected degradation or design, construction or manufacturing defects); releases; failure to maintain adequate supplies of spare parts; operator error; labour disputes; disputes with interconnected facilities and carriers; operational disruptions or apportionment on third-party systems or facilities, which may prevent the full utilization of Alliance Canada's assets; and catastrophic events, including, but not limited to, extreme weather events, including fires, floods and other natural disasters, explosions, earthquakes, acts of terrorism or sabotage, and other similar events, many of which are beyond the control of Alliance Canada and all of which could result in operational disruptions, damage to assets, related spills or releases or other environmental issues. Alliance Canada may also be exposed from time to time to additional operational risks not stated in the immediately preceding sentence. The occurrence or continuance of any of the foregoing events could have a material

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adverse impact on Alliance Canada and its financial results. Additionally, facilities and pipelines are reliant on electrical power for their operations. A failure or disruption within the local or regional electrical power supply or distribution or transmission systems could significantly affect ongoing operations.

Alliance Canada is committed to proactively managing operational risk through safe and reliable operations. Alliance Canada maintains safety policies, disaster recovery procedures and insurance coverage in accordance with prudent pipeline operating standards in the case of an incident. Inspection, robust maintenance and monitoring methods are also employed to manage pipeline, turbine and facility integrity as well as to minimize system disruptions.

Regulatory Risk

The Alliance Canada Pipeline is a federally-regulated, inter-provincial natural gas pipeline under the jurisdiction of the NEB. Our natural gas transportation assets and operations are also subject to federal, provincial, and local regulations, as applicable. Regulation of Alliance Canada's business includes, but is not limited to, the methodology to determine tolls, terms and conditions of service, pipeline construction, operations and maintenance, and expansion of current operating facilities.

Alliance Canada is subject to the risk of regulatory authorities or other government bodies revising or rejecting proposed or existing arrangements and agreements. This can include international trade agreements, permits and regulatory approvals for new projects, offering of new services, and the tariff structure of Alliance Canada. Any revisions or rejections to existing or proposed arrangements or agreements could have a significant and potentially adverse effect on Alliance Canada's earnings and financial condition. As well, compliance with legislative changes may have an impact on the costs of existing operations or future projects.

In the U.S., tolls on pipelines, including the Alliance USA Pipeline, are regulated by and reported to the FERC and pipeline operations are governed by the PHMSA, which sets standards for the design, construction, pressure testing, operation and maintenance, corrosion control, training and qualification of personnel, accident reporting and record keeping. The Office of Pipeline Safety, within the PHMSA, inspects and enforces the pipeline safety regulations across the U.S. All regulations and environmental compliance obligations are subject to change at the initiative of PHMSA. Alliance Canada and Alliance USA continually monitor existing and changing regulations in all jurisdictions in which they currently operate, or into which they may expand in the future, and the potential implications to their operations; however, Alliance Canada cannot predict future regulatory changes, and any such compliance and regulatory changes in any one or multiple jurisdictions could have a material adverse impact on Alliance Canada and its financial results.

On February 8, 2018, the Canadian federal government introduced Bill C-69, an Act to enact the Impact Assessment Act and the Canadian Energy Regulator Act, to amend the Navigation Protection Act and to make consequential amendments to other Acts ("Bill C-69"), which proposes to, among other things, replace the NEB with a new regulator, the Canadian Energy

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Regulator ("CER"). The CER would continue to oversee approved federal, interprovincial and international energy projects in a manner similar to the current regime under the NEB. Alliance Canada continues to actively monitor developments relating to Bill C-69 and other regulatory initiatives; however, as there can be no assurances that Bill C-69 will be passed in its current form, or at all, Alliance Canada cannot predict the outcome of this or any other future regulatory initiatives. As such, the impact on Alliance Canada resulting from the enactment of the proposals under Bill C-69 and any other future regulatory initiatives is uncertain. In the event that such changes, or any future proposed changes, negatively impact Alliance Canada's current business, such changes could materially and directly impact Alliance Canada's business and financial results. Such regulatory initiatives could also indirectly affect Alliance Canada's business and financial results by impacting the financial condition and growth projects of its customers and, ultimately, production levels and throughput on the System.

Alliance Canada believes that regulatory risk is managed through the expertise of Alliance Canada's Operators' respective legal and regulatory teams, and their review of existing and proposed tariffs and tolls for compliance with regulatory guidelines and requirements. Alliance Canada has established and maintains strong relationships with our shippers, which also helps to reduce regulatory risk.

Demand for Transportation Services

Effective December 1, 2015, Alliance Canada shifted from a cost-of-service model to a market-based model as the Services Offering became effective. Under the new services framework, Alliance Canada assumed transportation revenue and cost risk for the majority of its operations. There can be no assurance that all operating costs incurred by Alliance Canada will be recoverable through the transportation tolls.

Accordingly, Alliance Canada's business is exposed to commodity price volatility and a substantial decline in the prices of these commodities could adversely affect its financial results. A decrease in volumes transported on the System due to depressed natural gas and NGL prices can directly and adversely affect Alliance Canada's financial results. The demand for, and utilization of, the System may be impacted by factors such as changing market fundamentals, capacity bottlenecks, operational incidents, regulatory restrictions, system maintenance, weather and increased competition. Market fundamentals, such as commodity prices and price differentials, natural gas consumption, alternative energy sources and global supply disruptions outside of Alliance Canada's control can impact both the supply of and demand for the commodities transported the System.

Despite the general slowdown in the oil and gas sector, Alliance Canada has successfully re-contracted all of its long-term firm receipt transportation capacity through 2019 and approximately 96% of long-term firm receipt capacity for 2020. Through 2018, demand was in excess of available firm capacity, and Alliance Canada marketed other available services to capture this strong demand for transportation services.

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In addition to long-term firm capacity, Alliance has successfully contracted winter and summer seasonal firm contracts as well as short-term firm contracts, all through a bidding process, to capture the strong demand for transportation services. In 2018, Alliance posted and processed approximately 200 bidding windows and held 7 open seasons where the term in the capacity offering was a month or greater. Alliance has also successfully marketed available interruptible transportation service under a similar bidding process.

Reserve Replacement

Future throughput on the System and replacement reserves in the service areas will be dependent upon the activities of producers operating in those areas as they relate to exploiting their existing reserve bases and exploring for and developing additional reserves, and technological improvements leading to increased recovery rates. Without reserve additions, or expansion of the service areas, volumes on pipelines and in facilities would decline over time as reserves are depleted. As natural gas and NGL reserves are depleted, production costs may increase relative to the value of the remaining reserves in place, causing producers to shut-in production or seek out lower cost alternatives for transportation. If, as a result, the level of tolls collected by Alliance Canada decreases, cash flow available to service Alliance Canada's debt obligations could be adversely affected.

Over the long-term, the ability and willingness of shippers to continue production will also depend, in part, on the level of demand and prices for natural gas and NGLs in the areas and markets served by Alliance Canada. Producers may shut-in production at lower product prices or higher production costs.

Global economic events may continue to have a substantial impact on the prices of natural gas and NGLs and Alliance Canada cannot predict the impact of future supply/demand or economic conditions. A lower commodity price environment will generally reduce drilling activity and, as a result, the demand for midstream infrastructure could decline. Producers in the areas serviced by Alliance Canada may not be successful in exploring for and developing additional reserves or achieving technological improvements to increase recovery rates and lower production costs during periods of lower commodity prices, which may also reduce demand for midstream infrastructure.

Future prices of hydrocarbons are determined by supply and demand factors, including weather and general economic conditions as well as economic, political and other conditions in other crude oil and natural gas producing regions, all of which are beyond Alliance Canada's control. The rate and timing of production from proven natural gas and NGLs reserves is at the discretion of producers and is subject to regulatory constraints. Producers have no obligation to produce from their natural gas and NGLs reserves, which means production volumes are at the discretion of producers. Lower production volumes may lead to less demand for pipeline and processing capacity.

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Competition

The System faces competition for natural gas pipeline transportation services to the Chicago area from both existing and proposed pipeline projects. Existing pipelines, other than the System, provide natural gas transportation services from the WCSB and the Bakken to natural gas markets in the Midwest, the Northeast, and the Gulf Coast of the United States and Eastern Canada. In addition, there could be proposals to upgrade existing pipelines or to build new pipelines serving such areas and markets. Any new or upgraded pipelines could: (i) allow shippers and competing pipelines to have greater access to natural gas markets in addition to the markets served by the System and the pipelines to which it is connected; (ii) offer natural gas transportation services that are more desirable to shippers than those provided by the System because of location, facilities or other factors; or (iii) charge tolls or provide transportation services to locations that result in greater net profit for shippers. In addition, the introduction of competing transportation alternatives into the areas served by the System could limit Alliance Canada's ability to adjust tolls as it may deem necessary and result in the reduction of throughput on the System.

There is also competition from other sources of natural gas such as the Marcellus and Utica shale plays within the Appalachian Basin. Situated in an area ranging from parts of Quebec and upstate New York to Virginia in the south and as far west as Ohio, the Marcellus and Utica shale plays are in relatively close proximity to the Chicago Hub and Eastern Canadian markets to which the System currently provides the majority of its transportation service. The ongoing development of shale gas within the Appalachian Basin, coupled with new infrastructure, provides an alternative source of gas to the Midwest and the Northeast United States and Eastern Canada. Growing demand in the region will absorb some of the incremental volumes but there will be displacement of flows, particularly from the Gulf Coast, Rockies and Midcontinent regions. Similarly, the growth in Appalachian supplies has reduced the reliance of the Northeast region of the United States on natural gas imports from Canada.

Alliance Canada's pipeline system and services are uniquely designed to enable natural gas producers to maximize the value of their product. Alliance Canada has the unique ability to transport NGLs within the methane gas stream. This provides significant competitive advantages to producers and shippers within our Services Offering, including: (i) the ability to transport NGLs, thereby potentially reducing producers' processing infrastructure and costs and time to market; (ii) the ability to access U.S. NGL markets; (iii) the opportunity to access the Aux Sable extraction and fractionation facility at the terminus of the Alliance USA Pipeline, which can provide considerable economies of scale; and (iv) the capability to provide a higher netback for liquids-rich natural gas.

See "Description of the Business – Competition".

Dependence on Related Parties

There is a significant dependence on Enbridge and Pembina now due to the Owner-Operator Transition. See "Corporate Structure – Recent Developments” and “General Development of the Business – Employees”.

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There is a significant degree of dependency on Aux Sable, a related party, to satisfy its requirements to provide heat content management services to Alliance USA. Should the Aux Sable Extraction Facility fail to provide heat content management services for any reason, the System and the shippers may experience operational issues. In certain circumstances, the failure to provide heat content management services could result in an interruption or curtailment of transportation service on the System. It is not possible to predict the extent or duration of these operational issues or their precise financial or operational impact to Alliance Canada. To clarify the expectations and mitigate risks among the parties, a new Heat Content Management Agreement was entered into with Aux Sable and made effective December 1, 2015.

There can be no assurance that Aux Sable will remain continuously operational or will continue business operations indefinitely. Aux Sable's business involves processing, refining and marketing NGLs and its profitability will depend in part on the differential in the price of natural gas versus the price of various NGLs in its market area.

The System operates as an integrated pipeline. Therefore, any matters which limit or restrict the ability of the Alliance USA Pipeline to operate could affect the ability of the Alliance Canada Pipeline to operate. Alliance Canada may have no control over matters which may adversely affect the Alliance USA Pipeline.

See "Description of the Business – Aux Sable Extraction Facility".

Pursuant to the Transportation Contracts, each Shipper is obligated to pay monthly demand charges based on the Shipper's contracted volume. A number of the Shippers, accounting for approximately 16% of transportation revenues as at December 31, 2018 (December 31, 2017 – 24%), are also related entities of Enbridge and Pembina or their respective Affiliates; however, the terms of these transportation agreements were the same as those agreed to with independent third parties. Alliance Canada recorded transportation revenue from the Transportation Contracts of $83.3 million for the year ended December 31, 2018 (December 31, 2017 - $117.2 million) (net of capacity assignments) for charges to Shippers who are or were Affiliates of the Limited Partners. Trade accounts receivable at December 31, 2018 includes $8 million (December 31, 2017 - $8.3 million) of transportation revenue receivable from Shippers who are related entities of the Limited Partners.

Environmental Costs and Liabilities

Alliance Canada's operations are subject to extensive national, regional and local environmental, health and safety laws and regulations governing, among other things, discharges to air, land and water, the handling and storage of natural gas and NGLs and hazardous materials, waste disposal, the protection of employee health, safety and the environment, and the investigation and remediation of contamination. Alliance Canada's facilities may experience incidents, malfunctions or other unplanned events that may result in spills, emissions or releases and/or result in personal injury, fines, penalties, other sanctions or property damage. Alliance Canada may also incur liability for environmental contamination associated with past and present activities and properties.

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Alliance Canada and the System must maintain a number of environmental and other permits from various governmental authorities in order to operate. Failure to maintain compliance with these requirements could result in operational interruptions, fines or penalties. Licenses and permits must be renewed from time to time and there is no guarantee that a license or permit will be renewed on the same or similar conditions as it was initially granted. There can be no assurance that Alliance Canada will be able to obtain all licenses, permits, registrations, approvals and authorizations that may be required to conduct operations that it may wish to undertake.

Alliance Canada and each of the Operators has established safety and environmental policies that are designed to reduce Alliance Canada's exposure to the inherent risks of operating a natural gas pipeline. Alliance Canada's and the Operators' policies and practices are designed to ensure that all aspects of its operations comply with existing laws and regulations relating to personal safety and protection of the environment, including those related to GHG emissions. Nonetheless, Alliance Canada and its Shippers may be exposed to additional costs of complying with new, more stringent regulations.

While Alliance Canada believes its current operations are in compliance with all applicable environmental, health and safety laws, there can be no assurance that substantial costs or liabilities will not be incurred as a result of non-compliance with such laws. Moreover, it is possible that other developments, such as changes in environmental, health and safety laws, regulations and enforcement policies thereunder, including with respect to climate change and claims for damages to persons or property resulting from Alliance Canada's operations, could result in significant costs and liabilities to Alliance Canada. If Alliance Canada is not able to recover the resulting costs or increased costs through insurance or increased tolls, Alliance Canada's ability to service its debt obligations could be adversely affected.

Changes in environmental, health and safety regulations and legislation, including with respect to climate change, may also impact Alliance Canada's customers and could result in natural gas and NGLs development and production becoming uneconomical, which would impact throughput on the System and Alliance Canada's financial results.

See "Description of the Business – Environmental".

Pipeline Right-of-Way Encroachment

Population growth adjacent to the System's right-of-way is a normal event that occurs throughout Canada and the U.S.; however, when industrial, commercial or residential development activities occur in close proximity to a pipeline right-of-way, pipeline companies are required to make an assessment of the changed circumstances and whether there is a need for remedial action, and, in Canada, if required, to submit a plan for approval by the NEB of the steps to be taken by the pipeline company to address the encroachment. Remedial actions can impact operations and result in significant costs associated with maintaining pipeline safety and could include moving the pipeline or reducing the pressure in a segment of the pipeline or other alternatives. A pipeline re-route could require a services curtailment, and a pressure reduction in a pipeline segment could result in lower volumes transported.

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Adequacy of Insurance

Alliance Canada is exposed to operational risks and hazards inherent in operating in the pipeline industry. See "Pipeline Operating Risks" above. Alliance Canada has a comprehensive insurance program in place to protect against significant unexpected losses. Alliance Canada's insurance coverage has been determined with reference to prudent practice in the pipeline industry. Alliance Canada's insurance program includes policies covering general liability and property and business interruption resulting from insured perils. There can be no assurance, however, that these insurance policies will fully compensate Alliance Canada for all losses, and certain provisions of such insurance may limit the availability thereof. In the event there is a total or partial loss of the System, there can be no assurance that the insurance proceeds, if any, received by Alliance in respect thereof will be sufficient in any particular situation or sufficient to offset all of the resultant financial impacts to Alliance. Further, the pipeline industry is subject to environmental regulations pursuant to federal, provincial, state and local laws of Canada and the United States. A breach of such laws may result in the imposition of fines or the issuance of clean-up orders, the cost of which may not be recoverable through insurance.

See "Description of the Business – Insurance".

Abandonment Costs

Pipeline companies are responsible for compliance with all applicable laws and regulations regarding the dismantling, decommissioning, environmental, reclamation and remediation activities on abandonment of their pipeline systems and other assets at the end of their economic life, and these abandonment costs may be substantial. The NEB directed pipeline companies, including Alliance Canada, to collect abandonment funds starting January 1, 2015. Each of Alliance Canada's transportation services includes a pipeline abandonment surcharge designed to collect in aggregate $11.6 million on an annual basis. The collected funds are deposited in an NEB-approved pipeline abandonment trust fund. To the best of its knowledge, Alliance Canada has complied with NEB requirements for abandonment funding and has completed the compliance-based filings that are required under the applicable NEB rules and regulations regarding abandonment.

As the costs of future abandonment cannot be precisely determined at this time, such collection is based on preliminary cost estimates that may be periodically adjusted over time. The actual costs of abandonment will depend on the regulatory requirements and economic factors prevailing at the time of abandonment, as well as the regulatory acceptance of Alliance Canada's specific abandonment plans.

While this collection mechanism is designed to mitigate abandonment funding risks, it will not entirely eliminate the risk of any funding shortfall. Additionally, the introduction of this collection mechanism could potentially impact Alliance's competitiveness, depending on its relative magnitude (i.e., relative to the amount of funds collected by competing pipeline companies).

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See "Description of the Business – Regulation in Canada".

Operating and Capital Costs

The operating and capital costs of Alliance Canada's assets may vary considerably from current and forecasted values and rates and represent significant components of the cost of providing service. In general, as equipment ages, costs associated with such equipment may increase over time. In addition, operating and capital costs may increase as a result of a number of factors beyond Alliance Canada's control, including general economic, business and market conditions and supply, demand and/or inflation in respect of required goods and/or services. If significant increases in operating or capital costs are incurred, this may impact the ability of Alliance Canada ability to service its debt obligations could be adversely affected.

Although certain operating costs are recaptured through the tolls charged on natural gas and NGLs volumes processed and transported, to the extent such tolls escalate, producers may seek lower cost alternatives or stop production of their natural gas and NGLs reserves.

Credit Risk

Alliance Canada is exposed to credit risk as the business is concentrated in the natural gas transportation industry and its revenue is dependent upon the ability of Shippers to pay monthly charges. A majority of the Shippers operate in the crude oil and natural gas exploration and development, energy marketing or transportation industries and may be exposed to long-term downturns in energy commodity prices, including the price for natural gas, or other credit events impacting these industries.

Should a Shipper be unable to fulfill their contractual obligations and if suitable replacement shippers were not readily available, Alliance Canada's financial results may be adversely impacted. Alliance Canada limits, to an extent, its exposure to this credit risk by requiring Shippers to provide letters of credit or other suitable security if Shippers do not maintain specified credit ratings or a suitable financial position. The risk of non-performance of Shippers is mitigated by Alliance Canada's credit approval process and on-going monitoring procedures. Alliance Canada believes these measures are prudent and allow for effective management of its counterparty credit risk, but there is no certainty that they will protect Alliance Canada against all material losses. As part of its ongoing operations, Alliance Canada must balance its market and counterparty credit risks when making business decisions.

At December 31, 2018, approximately 75% of Firm Capacity (as represented by percentage of those associated revenues) is contracted to Shippers who do not have an investment grade rating or acceptable credit status and are required to post security. These Shippers have provided required security, but in no case does such security cover more than three months of obligations under the applicable Transportation Contract.

Over the past three years, energy prices have experienced significant volatility resulting in continued uncertainty for companies throughout the crude oil and natural gas industry.

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Reductions in producers' capital and operating budgets and the impact of reduced revenues on corporate liquidity positions has resulted in an increase in potential credit risk to Alliance Canada.

Alliance Canada actively monitors the financial condition of its Shippers and requires Shippers to provide letters of credit or other suitable security if Shippers do not maintain specified credit ratings or a suitable financial position. Alliance Canada expects that, should a Shipper be unable to fulfill its contractual obligations in the future, re-contracting of the repudiated contract is possible, although there may be a risk that the revenue may be lower than the original Transportation Contract.

Currently there are no material accounts receivable that meet the definition of past due and/or impaired. Alliance Canada will continue to monitor both current and potential shippers based upon Alliance Canada's credit approval process.

The credit risk arising from cash deposits is minimal as cash is held with major financial institutions. Aside from this, Alliance Canada does not hold any other short or long-term investments.

See "Description of the Business – Shippers", "Description of the Business – Transportation Contracts", and "Description of the Business – Services Offering".

Liquidity Risk

Alliance Canada manages liquidity risk by ensuring access to sufficient funds to meet its obligations. It forecasts cash requirements to ensure funds are available to fund liabilities as they become due. The primary sources of liquidity are funds received from transportation tolls, borrowings under its revolving credit facility and funding from the Limited Partners. Alliance Canada is highly dependent upon its Shippers for revenues from their Contracted Capacity on the Alliance Canada Pipeline portion of the System. The failure of such Shippers to fulfill their contractual obligations under the applicable Transportation Contracts or the failure to replace such Shippers on equivalent terms and conditions could have a material adverse effect on Alliance Canada's financial results and could impair its ability to service its debt obligations.

Alliance Canada also holds in its debt service reserve account an amount at least equal to six months of scheduled interest and principal payments, which is funded by letters of credit under its revolving credit facility. The debt service reserve is in addition to the funds that are transferred monthly to the debt service account to be held for the semi-annual interest and principal payments on the Senior Notes outstanding and the monthly debt service amounts due on the revolving credit facility. Funds available under the revolving credit facility may also be accessed from time to time should cash receipts prove insufficient to fund the month's operating and investing activities.

Alliance Canada may be required to refinance its indebtedness under its revolving credit facility and the outstanding Senior Unsecured Notes at their maturity date and may require additional financing depending on future developments, enhancement opportunities or acquisition plans.

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If Alliance Canada is unable to access additional capital, through either debt or equity financing, then future opportunities may be foregone.

The ability of Alliance Canada to refinance existing indebtedness and arrange additional financing in the future will depend, in part, upon prevailing market conditions at the time, as well as the business performance of Alliance Canada. There can be no assurance that debt or equity financing will be available, including on terms acceptable to Alliance, or sufficient to meet or satisfy Alliance Canada's initiatives, objectives, or requirements.

Uncertainty and volatility in financial markets may adversely affect Alliance Canada's ability to arrange permanent long-term financing for significant capital expenditures and potentially to refinance indebtedness under the revolving credit facility or the outstanding Senior Unsecured Notes at their maturity date. This may also affect Alliance Canada's credit ratings.

Having an investment grade credit rating supports Alliance Canada's ability to refinance existing debt as it matures and the ability to access cost competitive capital for future growth. Rating agencies regularly evaluate Alliance Canada and base their ratings of its debt on a number of factors. This includes Alliance Canada's financial strength as well as factors not entirely within Alliance Canada's control, including conditions affecting the industry in which Alliance Canada operates generally and the wider state of the economy. There can be no assurance that one or more of Alliance Canada's credit ratings will not be downgraded. A ratings downgrade below investment grade may have a materially adverse effect on the ability of Alliance Canada to obtain financing on favourable terms and conditions.

Future cash distributions of Alliance Canada may be adversely affected if Alliance Canada is unable to refinance its indebtedness or arrange additional financing on terms and conditions at least as favourable as the existing terms and conditions of such indebtedness. If Alliance Canada is unable to refinance its indebtedness then, at maturity, Alliance Canada will have to use available cash to repay the indebtedness. This may adversely affect the ability of Alliance Canada to make distributions.

Reliance on Management and Other Key Individuals

Alliance Canada is dependent on the Owners and the senior management and directors of the Owners who manage the business of Alliance. The loss of the services of key individuals who have historical knowledge about the business and assets of Alliance could have a detrimental effect on Alliance Canada. There can be no assurance that the Owners will continue to attract, retain and dedicate the resources and personnel necessary for the successful development and operation of the business of Alliance.

Canada-United States-Mexico Agreement

On November 30, 2018, Canada, the U.S. and Mexico signed the trilateral Canada-United States-Mexico Agreement ("CUSMA"), which, once ratified, will replace the existing trilateral North American Free Trade Agreement ("NAFTA").

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NAFTA imposes certain requirements on Canada with respect to exports of energy and basic petrochemicals, requiring that export measures be applied such that the proportion of total supply exported over a three-year period remains unchanged. This requirement does not appear in CUSMA and is, therefore, expected to permit Canada to expand its exports of crude oil and natural gas beyond the U.S. In addition, CUSMA includes a change to the crude oil and natural gas rules of origin, which is expected make it easier for Canadian exporters to qualify for duty-free treatment on shipments to the U.S. and Mexico. Canada must, however, notify the U.S. of its intention to enter into free trade talks with any "non-market economies" under CUSMA, which may include China or any other potential importers of Canadian crude oil and natural gas exports.

Although CUSMA has been signed, it is still required to be ratified and implemented by legislators from each of the three countries according to their own domestic legislative processes before it takes effect and replaces NAFTA. The ratification and implementation process in each of Canada, the U.S. and Mexico is not yet complete.

If CUSMA is not ratified and implemented by all three countries, this may alter the terms of trade for energy and petrochemical resources in North America, which could impact the ability of Alliance Canada and Alliance USA to sell and transport natural gas within North America and could have an adverse impact on our results from operations and financial condition.

Climate Activism

Recently, there has been an increase in climate change or environmental activism with energy companies as the targets. While the efforts of groups engaged in such activism have been focused primarily on oil pipelines, these groups generally condemn all forms of hydrocarbon extraction and transportation.

The activities of these groups can pose serious risks, including but not limited to: (i) intimidation of, or potential injury to employees, landowners, and others; (ii) damage to corporate assets or interruption of pipeline operations; and (iii) adverse publicity.

Alliance Canada maintains communications with local, provincial, and federal law enforcement and other agencies, including the NEB, which allows Alliance Canada to share information, receive reports of relevant incidents and provide reports of incidents to the authorities and industry peers.

Interest Rate Risk

Alliance Canada is exposed to interest rate fluctuations on variable rate debt. Amounts outstanding under its revolving credit facilities are floating-rate based. At December 31, 2018, Alliance Canada has fixed interest rates on 99% of its total long-term debt, and consequently its exposure to fluctuations in future cash flows caused by interest expense as a result of changes in interest rates is very limited.

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Litigation

In the course of its business, Alliance Canada may be subject to lawsuits and other claims. Defence and settlement costs associated with such lawsuits and claims may be substantial, even with respect to lawsuits and claims that have no merit. Due to the inherent uncertainty of the litigation process, the resolution of any particular legal or other proceeding may have a material adverse effect on Alliance Canada and its financial results.

Cyber Security

Alliance Canada is exposed to cyber risk as day-to-day business operations are connected and conducted over the internet. These risks include, but are not limited to: (i) damage to corporate assets and interruption to pipeline operations; (ii) compromise of the System's operating system; (iii) degradation of internally delivered services; (iv) theft of personal or corporate information; (v) compromise of data integrity; and (vi) cyber extortion. These risks can be realized from malware infections in emails or websites as well as social engineering activities such as phishing and employee impersonation.

Alliance Canada and each of the Operators uses safeguards to ensure its information systems remain secure and reliable. Alliance Canada maintains communication with the Canadian Center for Cyber Security, formerly Canadian Cyber Incident Response Centre, which allows it to stay current with any new cyber threats. This information sharing is bi-directional, where appropriate, resulting in cyber threats and incidents being reported to authorities around the world.

Numerous cyber security technologies and practices have been implemented throughout Alliance Canada as part of an in-depth defense strategy that follows guidelines issued by the Canadian Standards Association ("CSA") and National Institute of Standards and Technology ("NIST") and is recommended by the NEB in Canada and TSA and FERC in the U.S. These technologies and practices provide detection and protection of, and response to, cyber security threats. Alliance Canada regularly evaluates its cyber security technologies and practices and either replaces them or augments them as needed.

As of the date of this Annual Information Form, there have been no known material cyber security incidents at Alliance Canada or Alliance USA.

Terrorist Risk

Alliance Canada has taken specific measures to enhance the security of its pipelines from terrorist and other threats. These measures include instituting baseline security assessments according to the risk profile of each facility and initiating upgrades in equipment and procedures as required. Although Alliance Canada does not believe that its exposure to a terrorist attack is any greater than the exposure of its competitors, there is no assurance that its assets and facilities will not become the subject of a terrorist attack regardless of the steps taken to increase security.

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DESCRIPTION OF CAPITAL STRUCTURE

Alliance Canada has been capitalized through the issuance of the Units, the Senior Notes, the Senior Unsecured Notes and through borrowings under its Credit Facility.

Units

General

Alliance Canada is authorized to issue an unlimited number of Class A Units and an unlimited number of Class B Units. As of December 31, 2018, Alliance Canada has issued Class A Units and Class B Units to the Limited Partners, as follows:

Limited Partner Total Units Issued to Date Percent (%)

Enbridge Class A: Class B:

278,103.6305 36,778.9505

50

314,882.5810

Pembina

Class A: Class B:

278,103.6305 36,778.9505

50

314,882.5810

Total Class A: Class B:

556,207.2610 73,557.9010

100

629,765.1620 The Class A Units and the Class B Units are equal with respect to all rights, benefits, obligations and limitations provided for under the Limited Partnership Agreement.

The holders of the Class A Units and Class B Units are entitled:

(a) to one vote in respect of each Class A Unit and Class B Unit held on any matters requiring the approval or consent of the partners in general or the Limited Partners in particular, unless otherwise specified in the Limited Partnership Agreement; and

(b) to participate in profits, to have allocated to them any losses, or to receive distribution of the Capital Contribution (as defined in the Limited Partnership Agreement) in respect of each Class A Unit and Class B Unit.

Limited Liability of Holders of Units

The Limited Partners are not permitted to, among other things, take part in the control or management of the business of Alliance Canada or to transact any business on behalf of Alliance Canada or to bind or hold themselves out as having the authority or power to bind Alliance

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Canada. The Canadian General Partner has the full and exclusive right, power and authority to manage, control, administer and operate the business and affairs of Alliance Canada.

Alliance Canada was formed in order for each Limited Partner to benefit from limited liability to the extent of the capital contributed to Alliance Canada, plus its pro rata share of any undistributed income of Alliance Canada. A Limited Partner may lose the protection of limited liability if, among other things, it takes part in the control or management of the business of Alliance Canada. In the event that the limited liability of a Limited Partner is lost by reason of a breach by the Canadian General Partner of the Limited Partnership Agreement or any act or omission of the Canadian General Partner or any of its officers, directors, shareholders, employees or agents, the Canadian General Partner is required to indemnify and hold harmless such Limited Partner.

Allocation of Net Income and Losses

The net income or loss, as the case may be, of Alliance Canada as determined for accounting purposes for a given fiscal year of Alliance Canada is allocated among the Canadian General Partner and the holders of the Class A Units and the Class B Units as follows:

(a) 1% to the Canadian General Partner; and

(b) 99% to the holders of the Class A Units and the Class B Units at the end of such fiscal year in proportion to the number of Class A Units and Class B Units respectively held by them.

The net income or loss, as the case may be, of Alliance Canada for tax purposes for a given fiscal year, which may vary from the net income or loss of Alliance Canada as determined for accounting purposes, is allocated among the Canadian General Partner and the holders of the Class A Units and the Class B Units in the same proportions and manner as the allocation of net income or loss for accounting purposes.

Distributions

The Canadian General Partner may, at any time, distribute to the Canadian General Partner and the holders of the Class A Units and the Class B Units such portion of the net income of Alliance Canada, including any undistributed income, as the Canadian General Partner determines in good faith to be in the best interests of Alliance Canada, as follows:

(a) 1% to the Canadian General Partner; and

(b) 99% to the holders of the Class A Units and the Class B Units on the record date for such distribution in proportion to the number of Class A Units and Class B Units respectively held by them.

No distribution is permitted to be made to the Canadian General Partner or the Limited Partners unless the distribution complies with the Common Agreement and provided that, after making

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the distribution, sufficient property of Alliance Canada remains to satisfy all liabilities of and claims against Alliance Canada, except liabilities to Limited Partners (on account of the capital contributions made by them to Alliance Canada) and to the Canadian General Partner.

See "Material Contracts – Common Agreement".

See "Distributions – Cash Distributions" for a summary of the distributions per Unit declared and paid by Alliance Canada during Alliance Canada's three most recently completed financial years.

Return of Capital

The Canadian General Partner may, at any time, subject to applicable laws, return as capital to the holders of the Class A Units and the Class B Units and to the Canadian General Partner such portion of the capital contributions respectively made by them as the Canadian General Partner determines in good faith to be in the best interest of Alliance Canada. Any such return of capital is required to be allocated among the Canadian General Partner and the holders of the Class A Units and the Class B Units in the same proportions and manner as any distribution of net income made to them.

Dissolution

In conjunction with a dissolution of Alliance Canada and after the payment of, or provision for, the debts, liabilities and liquidation expenses of Alliance Canada, the holders of the Class A Units and the Class B Units are entitled, on the date of dissolution, in proportion to the number of Class A Units and Class B Units respectively held by them:

(a) to an amount equal to the balance in the capital account maintained under the Limited Partnership Agreement at such time, or a pro rata share where sufficient funds are not otherwise available; and

(b) to a distribution of 99% of the balance of the remaining assets of Alliance Canada.

Right of First Refusal

A Limited Partner that proposes to transfer any of its Units to a purchaser that is not an Affiliate or nominee of such Limited Partner, or to a financial investor, or that undergoes a change of control must first offer such Units to the other Limited Partners at the same price and on the same terms, unless such transfers are approved by an extraordinary resolution of the Limited Partners.

Constraints of Ownership

Under the terms of the Limited Partnership Agreement, each Limited Partner is prohibited from becoming a "non-resident" of Canada within the meaning of the Income Tax Act (Canada) and must promptly advise the Canadian General Partner if it becomes a "non-Canadian" within the meaning of the Investment Canada Act (Canada). Upon request, each Limited Partner must

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provide the Canadian General Partner with evidence of its represented and agreed to status under such legislation. If a Limited Partner fails to provide evidence of its represented and agreed to status under such legislation within a reasonable time of request or if the evidence it does provide is not reasonably satisfactory, the Canadian General Partner has the right, subject to the right of first refusal granted to the Limited Partners under the Limited Partnership Agreement, to sell or purchase for cancellation the Units held by such Limited Partner for the lesser of their acquisition cost or their fair market value determined in accordance with the terms of the Limited Partnership Agreement. In addition, pursuant to the Limited Partnership Agreement, no transfer of Units is permitted if the transferee of the Units is a non-resident of Canada within the meaning of the Income Tax Act (Canada).

Senior Notes and Senior Unsecured Notes

As at December 31, 2018, the following Senior Notes were outstanding: (i) $191.2 million principal amount bearing interest at 7.181% per annum and maturing on June 30, 2023; (ii) $148.3 million principal amount bearing interest at 7.217% per annum and maturing on December 31, 2025; (iii) $169.4 million principal amount bearing interest at 6.765% per annum maturing on December 31, 2025; (iv) $67.8 million principal amount bearing interest at 5.546% per annum and maturing on December 31, 2023. In addition, Alliance has issued $120.0 million principal amount of senior unsecured notes bearing interest at 4.928% per annum and maturing on December 16, 2019 (the "Senior Unsecured Notes") pursuant to a trust indenture as of December 16, 2009, as amended by the first supplemental indenture dated November 29, 2011 between BNY Trust Company of Canada and Alliance Canada (collectively, the "Medium Term Note Indenture").

See "Material Contracts – Medium Term Note Indenture".

Interest and principal repayments on the Senior Notes are payable semi-annually each June 30 and December 31. Interest on the Senior Unsecured Notes is payable semi-annually on each of June 16 and December 16 with principal repayment due at maturity.

Alliance Canada may be required to redeem the Senior Notes in whole or in part, from proceeds received under insurance claims or other claims for damages if the proceeds are not applied to repair or rebuild the Alliance Canada Pipeline.

Along with Alliance Canada's bank credit facilities, the Senior Notes are collateralized by a first priority perfected security interest in the Transportation Contracts with a term greater than one year, Alliance Canada's NEB permit, certain other material contracts, the trust accounts into which Alliance Canada's transportation revenue is deposited, and a floating charge debenture over Alliance Canada's real property and tangible personal property. The Senior Notes rank equally with Alliance Canada's bank credit facilities and may be redeemed by Alliance Canada at any time at a price equal to the greater of: (i) the applicable Government of Canada yield plus a premium, and (ii) par, together with accrued interest.

See "Material Contracts – Senior Note Indenture".

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Ratings

The Senior Notes are rated BBB+ by S&P and Baa2 (stable) by Moody's. The Senior Unsecured Notes are rated Baa3 by Moody’s. Credit ratings are intended to provide investors with an independent measure of the credit quality of any issue of securities.

S&P's credit ratings are on a long-term debt rating scale that ranges from AAA to D, which represents the range from highest to lowest quality of such securities rated. According to the S&P rating system, an obligation rated "BBB" exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. The ratings from AA to CCC may be modified by the addition of a plus (+) or minus (–) sign to show relative standing within the major rating categories.

Moody's credit ratings are on a long-term debt rating scale that ranges from Aaa to C, which represents the range from highest to lowest quality of such securities rated. According to the Moody's rating system, debt securities rated Baa are judged to be medium-grade and subject to moderate credit risk and as such, may possess certain speculative characteristics. Moody's applies numerical modifiers 1, 2 and 3 in each generic rating classification from Aa through Caa in its corporate bond rating system. The modifier 1 indicates that the issue ranks in the higher end of its generic rating category, the modifier 2 indicates a mid-range ranking and the modifier 3 indicates that the obligation ranks in the lower end of its generic rating category.

The credit ratings accorded to the Senior Notes and the Senior Unsecured Notes by the rating agencies are not recommendations to purchase, hold or sell the Senior Notes or the Senior Unsecured Notes, as such ratings do not comment as to market price or suitability for a particular investor. Alliance Canada cannot provide assurance that any rating will remain in effect for any given period of time or that any rating will not be revised or withdrawn entirely by a rating agency in the future. If, in the judgment of a rating agency, circumstances so warrant and if any such rating is so revised or withdrawn, Alliance Canada is not obliged to update this Annual Information Form.

Alliance pays industry-standard fees to Moody’s and S&P in regards to the ratings of its Senior Notes and Senior Unsecured Notes. No other payments were made to any of these credit rating agencies for other services provided to Alliance Canada.

Bank Credit Facilities

On June 26, 2015, Alliance Canada entered into the Credit Facility, a three-year $200 million revolving credit facility with a syndicate of lenders.

Loans under the Credit Facility bear interest at floating rates based on Canadian bankers' acceptance rates plus an applicable margin to those rates. The Credit Facility includes a provision that may increase its aggregate amount to $300 million. The credit agreement relating to the

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Credit Facility includes customary representations, warrants, covenants (including financial covenants and restrictions on additional indebtedness), and conditions to funding.

See "Material Contracts – Common Agreement".

The Credit Facility ranks pari passu with other senior secured debt of Alliance Canada, including the Senior Notes, and the lenders under the Credit Facility share the benefit of all collateral required to be provided under the Senior Note Indenture and the Medium Note Indenture on a pari passu basis. Any letters of credit drawn under the Credit Facility will constitute senior debt; however, the reimbursement obligations arising pursuant to the letters of credit will rank after payment of other senior debt.

Effective November 2, 2016, the maturity date of the Credit Facility was extended to June 29, 2019. Effective April 27, 2017, the Credit Facility was extended to June 29, 2020. Effective May 3, 2018, the maturity date of the Credit Facility was extended to June 29, 2021. There are provisions in the credit agreement governing the Credit Facilities to extend the term but the length of the Credit Facility cannot extend beyond four years. Extensions are subject to acceptance of the lenders under the credit agreement.

As of December 31, 2018, the amount available to draw down on the Credit Facility had been reduced by the outstanding debt service reserve letters of credit of $75 million, an outstanding letter of credit to support the purchase of operational line pack of $3 million and by drawings of $2 million.

Liquidity

As of December 31, 2018, Alliance Canada had $51.4 million in cash and trust deposit accounts. Cash totaling $51.0 million is held in trust accounts to meet certain covenants contained in financing agreements and restricted deposits on behalf of shippers. Undrawn amounts under the Credit Facility were $120.0 million at December 31, 2018. The total of cash, trust deposits and the bank Credit Facility are, in management’s view, adequate to meet on-going liquidity and capital resource requirements.

DISTRIBUTIONS

Cash Distributions

The following tables summarize the quarterly distributions declared and paid by Alliance Canada to the Limited Partners and to the Canadian General Partner, respectively, in each of Alliance Canada's three most recently completed financial years. The distributions made to the Limited Partners represent the 99% allocation of distributable net income to which the Limited Partners are entitled and the distributions made to the Canadian General Partner represent the 1% allocation of distributable net income to which the Canadian General Partner is entitled, in each case under the Limited Partnership Agreement. The historical distribution payments in the tables below are not indicative of future distribution payments that may be made to the Limited Partners and the Canadian General Partner.

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Net Cash Distribution Per Unit to Limited Partners

(in thousands of dollars) Payment Date

2018

2017

2016

Q1 $ 92.7489 $ 62.8806 $ 53.4485 Q2 134.5645 97.4649 50.1473 Q3 110.6699 86.4608 71.2123 Q4 96.0501 118.8443 91.1768

Total $ 434.0334 $ 365.6506 $ 265.9849

Alliance Canada has both Class A Units and Class B Units outstanding. The cash distributions declared and paid per Class A Unit and per Class B Unit during the three most recently completed financial years of Alliance Canada were equal. The Canadian General Partner does not own any Units.

The following table sets forth the gross distributions declared and the net distributions paid to the Limited Partners in each of the preceding three financial years:

Net Distributions to Limited Partners (in thousands of dollars)

($ per Unit) 2018 2017 2016

Gross Cash Distribution $ 434.0334 $ 365.6506 $ 275.1026 Maintenance Capital Contribution 0 0 (9.1177)

Net Distributions $ 434.0334 $ 365.6506 $ 265.9849

Gross Cash Distribution to Canadian General Partner (in thousands of dollars)

Payment Date 2018 2017 2016

Q1 $ 590 $ 400 $ 340 Q2 856 620 340 Q3 704 550 490 Q4 611 756 580

Total $ 2,761 $ 2,326 $ 1,750

Prior year distribution balances paid to the Canadian General Partner reflect the gross distribution paid to the Canadian General Partner.

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In January 2019, the Canadian General Partner declared distributions of $59.7366 per Unit payable to the Limited Partners and a distribution of $380,000 payable to the Canadian General Partner, in each case on January 18, 2019.

Distribution Policy

Alliance Canada targets to distribute to the Limited Partners an amount equal to revenues less operating costs and amounts required to service debt obligations. In determining what amounts may be paid, Alliance Canada takes into account the prevailing circumstances at the time, including expected capital expenditures and working capital requirements, and limitations placed on Alliance Canada as a result of its financing agreements. Increases in distributions to the Limited Partners may be supported by increases in cash available for distribution due to consistent performance and operational results, along with available liquidity.

Distribution Limitations

Pursuant to the Common Agreement, Alliance Canada may make quarterly distributions so long as at the time of distribution (a) no potential event of default or event of default has occurred and is continuing; (b) its debt service reserve account is fully funded; (c) its debt service account is fully funded; and (d) its DSCR for the preceding four fiscal quarters and the projected DSCR for the four succeeding fiscal quarters are at least 1.25 to 1.

See "Material Contracts – Common Agreement".

MARKET FOR SECURITIES

The Units, the Senior Notes and the Senior Unsecured Notes are not listed on any exchange or similar market.

SECURITIES SUBJECT TO CONTRACTUAL RESTRICTIONS ON TRANSFER

Description of Class

Number of Securities that are Subject to a

Contractual Restriction on Transfer Percentage of Class (%)

Class A Units (1) 556,207.2610 100 Class B Units (1) 73,557.9010 100

Note: (1) The Units are subject to contractual restrictions on transfer under the Limited Partnership Agreement, which do not expire. See "Description

of Share Capital – Units – Right of First Refusal" and "Description of Share Capital – Units – Constraints of Ownership".

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DIRECTORS AND OFFICERS

Name, Occupation and Security Holdings

The Canadian General Partner has a board of directors which monitors management's activities and reviews the business strategies of Alliance Canada. As of the date of this Annual Information Form, the GP Board consisted of six members, each of whom will serve as a director of the Canadian General Partner until the next annual meeting of its shareholders or until such director's successor is duly elected or appointed. The table below sets out, as of the date of this Annual Information Form, the full name of each director and executive officer of the Canadian General Partner, his or her municipality of residence and position with the Canadian General Partner, his or her current principal occupation and, if applicable, principal occupations within the five preceding years and, for each director, the year in which such person became a director of the Canadian General Partner. No director or executive officer of the Canadian General Partner and no associate or affiliate of any director or executive officer of the Canadian General Partner beneficially owns, directly or indirectly, or exercises control or direction over, any Units.

Name and Municipality of Residence

Position Principal Occupation Director Since

HAROLD K. ANDERSEN Calgary, Alberta, Canada

Director Senior Vice President, External Affairs and Chief Legal Officer of Pembina since August 1, 2017; prior thereto, Vice President, Legal and General Counsel of Pembina since April 1, 2013.

October 2, 2017

J. SCOTT BURROWS (1) Calgary, Alberta, Canada

Director Senior Vice President and Chief Financial Officer of

Pembina since August 1, 2017; prior thereto, Vice

President, Finance and Chief Financial Officer of

Pembina since January 1, 2015; prior thereto, Vice

President, Capital Markets of Pembina since

September 2013; prior thereto, Vice President,

Corporate Development and Investor Relations of

Pembina since March 2013.

October 2, 2017

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Name and Municipality of Residence

Position Principal Occupation Director Since

TIMOTHY H. CURRY (1)

Calgary, Alberta, Canada

Director and

Chief Executive Officer

Chief Executive Officer of the Canadian General Partner since June 2018. Mr. Curry also currently serves as Vice President, Canadian Gas Transmission & Midstream of Enbridge. Mr. Curry also served as the Assistant Treasurer of Spectra Energy Corp. from May 2008 to February 2017. He has worked in the natural gas industry for over 30 years and has held various positions within Enbridge, Spectra Energy Corp. and other companies in the areas of gas and natural gas liquids marketing, finance, regulatory affairs and gas supply.

June 12, 2018

JASON T. WIUN Calgary, Alberta, Canada

Director and Chief Financial

Officer

Chief Financial Officer of the Canadian General Partner since June 2018. Senior Vice President and Chief Operating Officer, Pipelines of Pembina Pipeline since January 1, 2018; prior thereto, Vice President, Conventional Pipelines of Pembina since January 1, 2014.

October 2, 2017

CHRISTOPHER A. HARGREAVES Calgary, Alberta, Canada

Director and Vice President

Vice President of the Canadian General Partner since June 2018. Senior Specialist, JV Management, Canadian Gas Transmission & Midstream, Enbridge since March 2018. Manager, Commercial South Peace, Canadian Gas Transmission & Midstream, Enbridge from March 2017 to February 2018. Director, Commercial Development, Spectra Energy Midstream Corporation from August 2016 to February 2017. Director, Pricing and Market Research, Spectra Energy Corp. from January 2015 to July 2016. Director, Commercial Development, Spectra Energy Midstream Corporation from March 2013 to December 2015.

October 22, 2018

STEPHEN J. NEYLAND (1) Houston, Texas, U.S.

Director Vice President – Finance, Gas Pipelines & Transmission for Enbridge since 2016, Vice President, Finance for Enbridge Energy Partners, L.P. and Enbridge Management Services Inc. since October 2010. Appointed Vice President – Finance of Midcoast Holdings, L.L.C., general partner of Midcoast Energy Partners, L.P., from 2013-2017. Previously Controller of the Enbridge Energy Partners, L.P. and Enbridge Management Services Inc. effective September 2006.

September 1, 2016

DARREN D. MARINE (2) Calgary, Alberta, Canada

Vice President Vice President of the Canadian General Partner since June 2018. Vice President, Transmission Business Unit for Pembina since October 2, 2017, Senior VP Business Joint Ventures, Veresen Inc. February 2014 to October 1, 2017. Director of Alliance Canada from February 19, 2014 to October 2, 2017. President of SemCAMS ULC (an owner and operator of gas gathering, compression and processing assets) from September 2006 to January 2011.

N/A

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Name and Municipality of Residence

Position Principal Occupation Director Since

DAVE DUNLOP Calgary, Alberta, Canada

Controller Controller of the Canadian General Partner since June 2018. Senior Manager, Controller, Transmission Pipelines of Pembina since October 2, 2017; prior thereto Vice President, Finance, Veresen Inc., since September 1, 2014.

N/A

DAVID TANIGUCHI Calgary, Alberta, Canada

Corporate Secretary

Corporate Secretary of the Canadian General Partner since June 2018. Associate General Counsel of Enbridge since 2014, and Corporate Secretary for Enbridge’s Canadian subsidiaries, including Enbridge Pipelines Inc., Enbridge Gas Inc. and Westcoast Energy Inc.

N/A

Notes:

(1) Member of the Audit Committee.

(2) Mr. Marine was an officer of SemCAMS ULC from September 2005 to February 2011. SemCAMS ULC obtained an order from the Alberta Court of Queen’s Bench on July 30, 2008 for creditor protection pursuant to the Companies’ Creditors Arrangement Act (Canada).

Conflicts of Interest

A potential material conflict of interest may exist between Alliance Canada and the directors of the Canadian General Partner by virtue of the following:

(a) The directors of the Canadian General Partner are also officers or employees of Enbridge Management Services Inc., Enbridge or Pembina or their respective Affiliates;

(b) Certain Affiliates of Enbridge and Pembina are also shippers on the System; and

(c) Enbridge and Pembina or their Affiliates also have ownership interests in Aux Sable Extraction and Aux Sable Liquid Products.

AUDIT COMMITTEE INFORMATION

Alliance Canada is a "venture issuer" as defined in NI 52-110. Accordingly, in presenting certain information regarding the audit committee of the Canadian General Partner (the "Audit Committee") below, Alliance Canada is relying on the venture issuer exemption set out in Section 6.1 of NI 52-110.

Audit Committee Charter

A copy of the Audit Committee charter is attached as Appendix A to this Annual Information Form.

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Composition of the Audit Committee

As of December 31, 2018, the members of the Audit Committee were Stephen J. Neyland (Chair), J. Scott Burrows and Timothy H. Curry, each of whom is independent and financially literate within the meaning of NI 52-110.

Relevant Education and Experience

A synopsis of the education and experience of each member of the Audit Committee is set out below:

Stephen J. Neyland (Chair)

Mr. Neyland is a Certified Public Accountant and has over 25 years of experience in accounting and financial reporting. Mr. Neyland’s roles have included: Vice President – Finance, Gas Pipelines & Transmission for Enbridge since 2016; Vice President, Finance for Enbridge Energy Partners, L.P. and Enbridge Management Services Inc. since October 2010; Appointed Vice President – Finance of Midcoast Holdings, L.L.C., general partner of

Midcoast Energy Partners, L.P., from 2013 to 2017; previously, Controller of the Enbridge Energy Partners, L.P. and Enbridge Management Services Inc., effective September 2006.

J. Scott Burrows

Mr. Burrows was appointed Senior Vice President and Chief Financial Officer of Pembina on June 30, 2017. Responsibilities of his position include overseeing Pembina’s financial, treasury, accounting, tax, risk, investor relations, capital markets, corporate development and planning functions. Previous roles at Pembina have included Vice President, Finance and Chief Financial Officer, Vice President, Capital Markets, and Vice President, Corporate Development & Investor Relations. Prior to joining Pembina, Mr. Burrows spent several years in energy-focused investment banking. Mr. Burrows has a Bachelor of Commerce from the University of British Columbia and is a CFA® Charterholder.

Timothy H. Curry

Mr. Curry is the Vice President, Canadian Gas Transmission & Midstream for Enbridge He has worked in the natural gas industry for over 30 years and has held various positions within Enbridge, Spectra Energy Corp. and other companies in the areas of gas and natural gas liquids marketing, finance, regulatory affairs and gas supply. Mr. Curry graduated with a Bachelor of Science degree in Chemistry and received his Master of Business Administration degree from McMaster University in Hamilton, Ontario. He is also a Chartered Professional Accountant.

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External Auditor Service Fees

The following table sets out the fees billed to Alliance Canada for professional services provided by PricewaterhouseCoopers LLP, Alliance Canada’s former auditor, during each of the last two financial years:

YEAR AUDIT FEES(1) AUDIT-RELATED FEES(2)

TAX FEES(3) ALL OTHER FEES(4)

2018 $162,650 $48,199 $22,000 $21,025

2017 $181,500 $83,799 $22,000 $30,550

Notes: (1) Audit fees were for professional services rendered by PricewaterhouseCoopers LLP for the audit of Alliance Canada's annual financial statements

and reviews of Alliance Canada's quarterly financial statements, as well as services provided in connection with statutory and regulatory filings or engagements.

(2) Audit-related fees are for assurance and related services, including French translations in connection with statutory and regulatory filings for 2017, reasonably related to the performance of the audit or review of Alliance Canada’s financial statements and not reported under "Audit Fees" above.

(3) Tax fees in 2018 and 2017 were for tax compliance. In addition to the 2018 fees stated above, PricewaterhouseCoopers LLP billed $22,000 in 2019 prior to the date hereof. The fees were for non-audit tax services.

(4) All other fees are fees for products and services provided by Alliance Canada's auditors primarily for accounting assistance other than those described as "Audit Fees", "Audit-related Fees" and "Tax Fees."

DIRECTOR AND OFFICER COMPENSATION

Officers' Compensation Prior to the Owner-Operator Transition Compensation Discussion and Analysis Prior to the Owner-Operator Transition, the executive compensation program of the Canadian General Partner was previously administered by the Human Resources and Compensation Committee (the "HRCC") of the GP Board, which was responsible for reviewing overall compensation policy and guidelines. The HRCC also reviewed and approved the annual compensation of the executive officers of the Canadian General Partner, including the Named Executive Officers of the Canadian General Partner prior to the Owner-Operator Transition (the "Former Named Executive Officers"). The members of the HRCC were neither current nor former officers nor employees of Alliance Canada or the Canadian General Partner. Prior to the Owner-Operator Transition, the HRCC consisted of Mr. R. Mark Fiedorek and Mr. Harry Andersen. The Canadian General Partner adopted a market-based compensation program that was designed to be competitive in attracting and retaining employees and to appropriately reward accomplishments and results through pay-for-performance. The program was comprised of four major components: base salaries, a short-term incentive plan, a long-term incentive plan, and benefits and perquisites. In addition, employees of the Canadian General Partner, including

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executive officers, were entitled to receive recognition awards of a minor value. The Canadian General Partner did not have an option plan, nor did it grant any equity-based awards. In determining compensation, the HRCC made use of formal assessments and market comparisons. The HRCC used competitive compensation data from organizations within the energy industry (the "Market Comparator Group"), and the compensation programs were targeted to be at the 50th percentile of the Market Comparator Group. Each component of the Canadian General Partner's executive compensation program is discussed in more detail below. Base Salary Base salaries for executive officers were determined using market data for similar roles, levels of responsibility and position scope in the Market Comparator Group. Within the overall structure set by that data, the specific salary for each executive officer was reviewed annually and the incumbent's responsibilities, business performance, performance reviews conducted by the President & Chief Executive Officer and the HRCC's assessment of performance were utilized to determine the salary. Industry market conditions, including anticipated salary increases within the Market Comparator Group, were also considered in the determination of annual salary increases. Short-Term Incentive Plan Through the Canadian General Partner's former Short-Term Incentive Plan ("STIP"), a portion of each executive officer's annual compensation was linked to the achievement of pre-defined corporate and individual performance objectives. Target incentive payments based on each participant's level of responsibility within the organization were established as a percentage of base salary and reflected competitive practice within the Market Comparator Group. The STIP provided for the payment of awards, which may be below or above target awards, subject to a set maximum payout. Prior to the Owner-Operator Transition, all of the Former Named Executive Officers had corporate performance measures in 2017 that included health, safety and environmental stewardship weighted at 25%, operational performance weighted at 10%, governance and compliance weighted at 10%, strategic direction weighted at 15% and financial performance weighted at 40%. In addition to the performance measure targets, the HRCC also retained the flexibility to make final determinations in respect of awards made under the STIP. Long-Term Incentive Plan The Canadian General Partner’s former Long-Term Incentive Plan (the "LTIP") also formed an integral part of its executive compensation program. It was intended to reinforce commitment to the medium to long-term growth and profitability of Alliance. It also served as a tool to encourage the retention of key employees, and to ensure that the Canadian General Partner's total compensation packages were competitive within the Market Comparator Group. As the

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Units are not traded publicly, the LTIP was set up as a cash plan. Target incentive payments based on each participant's level of responsibility within the organization were established as a percentage of base salary (the "TPR") and to reflect competitive practice within the Market Comparator Group. The LTIP provided for the payment of awards, which may be below or above target awards, subject to a set maximum payout. Awards were made when certain threshold corporate performance measures, as set by the HRCC, were achieved. Each plan year had a three-year performance measurement period (the "Performance Period"). The HRCC was responsible for making the final determinations in respect of awards made under the LTIP, pursuant to the text of the LTIP, and placed considerable emphasis on Alliance Canada's long-term interests and the achievement of associated long-term goals. The elements used in calculating the overall LTIP award and their associated weightings for each plan year for which the participants were eligible for prior to the Owner-Operator Transition were the Limited Partner Unit award weighted at 60% (30% Enbridge and 30% Pembina) and Alliance Canada's financial performance weighted at 40%. The Limited Partner Unit award was based upon the performance of each of the Limited Partners’ performance share units against set measures within their respective long-term incentive plans over the Performance Period, as well as dividend equivalents earned during the Performance Period and the Unit value at the end of the Performance Period. The award relating to the financial performance of Alliance Canada rewarded management for achieving distribution and EBITDA (earnings before interest, taxes, depreciation and amortization) targets. The maximum award amount was equal to 2.5 times each participant's TPR. For the period from January 1, 2018 to June 24, 2018 (being the date prior to the effective date of the Owner-Operator Transition), all of the Former Named Executive Officers had the corporate performance measures noted above. Actual 2015 LTIP awards paid in 2018 to the Former Named Executive Officers are discussed in greater detail below, under the heading "Table of Compensation Excluding Compensation Securities". For clarity, no LTIP was granted to the Former Named Executive Officers in 2018. Benefits and Perquisites Benefit amounts were intended to cover the costs for items not included in the Canadian General Partner’s executive compensation program such as, but not necessarily limited to: medical plans, health and dental plans, pensions, insurance for life, long term disability and other related items. Benefit amounts provided to employees, including the Former Named Executive Officers, was reduced in 2017 in line with the median of the Market Comparator Group. The Canadian General Partner also previously provided short term disability and some major medical and dental coverage to its executive officers. Perquisite amounts were intended to cover the costs for items including, but not necessarily limited to: executive health programs, executive financial counselling services, or club memberships, as may be made available to the executive officer based on corporate policy from time to time.

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President & Chief Executive Officer Compensation The President & Chief Executive Officer's compensation was previously determined through compensation surveys and was reviewed annually based on corporate and individual performance. The pay-for-performance philosophy of the Canadian General Partner’s executive compensation program applied equally to the President & Chief Executive Officer. The HRCC approved the compensation of the President & Chief Executive Officer after assessment of his personal contribution to the performance of Alliance Canada. This assessment was based on a number of quantitative and qualitative factors, which included financial results, strategic planning and initiatives, personal leadership and business acumen. The President & Chief Executive Officer’s compensation was comprised of base salary, incentive awards granted under the STIP and LTIP and a benefits and perquisites amount. The Former President & Chief Executive Officer’s term ended on December 31, 2017 and he received no compensation in 2018. Table of Officers' Compensation Excluding Compensation Securities The table below sets forth information regarding the total compensation paid during the financial year ending December 31, 2017 and for the period from January 1, 2018 to June 24, 2018 (being the date prior to the effective date of the Owner-Operator Transition) to: (i) the former Senior Vice President & Chief Financial Officer of the Canadian General Partner and (ii) the other most highly compensated executive officers of the Canadian General Partner, measured by the total compensation for such period in 2018 as reported in the summary compensation table below.

Effective December 31, 2017, two interim co-Presidents from Enbridge and Pembina were named: Mr. R. Mark Fiedorek and Mr. Jason T. Wiun, neither of which was paid by Alliance Canada or the Canadian General Partner. Aggregate compensation was paid to Mr. Fiedorek and Mr. Wiun by Enbridge and Pembina, respectively, for serving as employees of Enbridge and Pembina, respectively, and as officers of the Canadian General Partner, although no separate amount of compensation was specifically allocated to those individuals for serving as officers of the Canadian General Partner. Information relating to the compensation programs of Enbridge and Pembina, including information relating to the compensation governance and programs and policies of Enbridge and Pembina, can be found in the proxy statement of Enbridge dated March 4, 2019 and the management information circular of Pembina dated March 15, 2019, electronic copies of which are available on the profiles of Enbridge and Pembina, respectively, on the SEDAR website at www.sedar.com.

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Table of Compensation Excluding Compensation Securities

Name and Principal Position Year(1)

Salary ($)

Bonus ($)

Value of All Other

Compensation(4) ($)

Total Compensation(5)

($)

Annual Incentive

Plans(2)

Long-term Incentive Plans(3)

Keith M. Palmer(6) Former Senior Vice President & Chief Financial Officer

2018

2017

173,458

362,000

185,869

201,706

369,240

504,296

1,251,008

89,897

1,979,575

1,157,899

Daniel B. Sutherland(7) Former Vice President, Commercial Operations

2018

2017

147,344

307,500

147,129

182,102

301,788

428,580

1,080,472

84,914

1,676,733

1,003,096

James P. Walsh (8) Former Vice President, Pipeline Operations & Engineering

2018

2017

137,042

286,000

146,847

171,371

243,100

332,150

955,273

76,217

1,482,262

865,738

Notes:

(1) Includes compensation for the period from January 1, 2018 to June 24, 2018 (being the date prior to the effective date of the Owner-Operator Transition).

(2) Annual Incentive Plans bonuses relate to performance by the Named Executive Officer under the STIP for the year prior to the year indicated and were paid during the year indicated, generally within the first quarter.

(3) The 2018 amount set out reflects the payment to the Named Executive Officer of vested portions of 2015 LTIP awards made under the LTIP as discussed under the headings "Directors' and Officers' Compensation Prior to the Owner-Operator Transition – Compensation Discussion and Analysis –Long-Term Incentive Plan".

(4) Neither Alliance Canada nor the Canadian General Partner granted any share-based or option-based awards. The Canadian General Partner provided a benefit account for each employee in lieu of a pension plan and to supplement the corporate benefits plan. The Former Named Executive Officers were responsible for the purchase of pensions, club memberships, auto leases and other related costs, and a portion of their own medical plans, disability and life insurance. Included in the "All Other Compensation" column are the benefit account amounts paid to each Named Executive Officer, parking and other perquisites received.

(5) A portion of the Former Named Executive Officer’s Total Compensation was allocated to the USA Managing General Partner each year pursuant to the terms of the Administrative Services Agreement. See narrative discussion below.

(6) In connection with the Owner-Operator Transition, Mr. Keith Palmer resigned from his position as Senior Vice President & Chief Financial Officer effective June 22, 2018. In connection with his departure, Mr. Palmer received a payment of $1,203,623, which is included in the “Value of All Other Compensation” column.

(7) In connection with the Owner-Operator Transition, Mr. Daniel Sutherland resigned from his position as Vice President, Commercial Operations effective June 22, 2018. In connection with his departure, Mr. Sutherland received a payment of $1,026,593, which is included in the “Value of All Other Compensation” column and was payable 50% in cash and 50% in restricted share units of Pembina.

(8) In connection with the Owner-Operator Transition, Mr. James Walsh resigned from his position as Vice President Pipeline Operations & Engineering effective June 22, 2018. In connection with his departure, Mr. Walsh received a payment of $918,622, which is included in the “Value of All Other Compensation” column and was payable 50% in cash and 50% in restricted share units of Pembina.

Pursuant to the terms of the Administrative Services Agreement, the USA Managing General Partner reimburses the Canadian General Partner for the costs of certain administrative services that are provided by the Canadian General Partner to or on behalf of the USA Managing General Partner with respect to certain services that are common to their respective businesses. The

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Administrative Services Agreement provides that the USA Managing General Partner shall reimburse the Canadian General Partner for a portion of the compensation expenses paid to the Former Named Executive Officers.

Employment Contracts – Termination of Employment There were no employment and/or consulting contracts in place for the year ended December 31, 2018. The Canadian General Partner had an employment contract with Mr. Terrance Kutryk, the former President & Chief Executive Officer, which ended with the departure of Mr. Kutryk on December 13, 2017. There are no further obligations or liabilities outstanding in relation to these contracts or contracts with any other former executive officers of the Canadian General Partner.

Risk Management and Executive Compensation Governance

The former compensation programs and policies of the Canadian General Partner were designed to be aligned with the long-term objectives of the Limited Partners. To accomplish this, Alliance Canada and the Canadian General Partner incorporated general risk management principles into all decision-making processes across the organization. This integration and review procedure helped to ensure the compensation programs continued to support the Limited Partners' interests and regulatory compliance and were aligned with sound principles of risk management and governance. The HRCC and the GP Board structured the executive compensation program to ensure that executives were compensated fairly, and in a way that did not incur undue risk to Alliance Canada or encourage executives to take inappropriate risks. The key features of the executive compensation procedures of the Canadian General Partner were:

• Balanced approach: Total direct compensation for executives provided an appropriate balance between base salary and variable, performance-based compensation. For the Former Named Executive Officers, emphasis was not focused on one compensation component, but was spread across short- and long-term programs to support and balance sustained short-term performance and long-term value creation. The Canadian General Partner’s mix of pay programs, its approach to goal setting, establishing targets with multiple levels of performance and evaluation of performance results assisted in mitigating excessive risk-taking that could negatively impact value.

• Structured process: The HRCC implemented a formal decision-making process that involved management, the HRCC and the GP Board. The HRCC oversaw the structure, development and operation of the compensation program with notable changes being reviewed and approved by the GP Board.

• Short-term incentives: Executives were compensated for their short-term performance using a combination of financial, safety and environmental, operational, compliance, and growth objectives that ensured a balanced perspective and included a mix of both leading and lagging indicators.

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• Long-term incentives: The HRCC and the GP Board placed emphasis on long-term incentives when determining the total direct compensation for the executive leadership team. The long-term incentive program sought to encourage value creation over the long term.

• Fixed limits on variable compensation: The performance thresholds of the variable components of the Canadian General Partner's compensation programs included maximum payouts.

• Consistent policies: The compensation of individual executives was consistent with the compensation policies of the Canadian General Partner.

• Relevant Education and Experience: The GP Board established the HRCC to oversee executive compensation matters. A synopsis of the education and experience of each former member of the HRCC is set out below, including a description of any direct experience relevant to his or her responsibilities in executive compensation:

R. Mark Fiedorek was the Vice President of Enbridge’s Canadian Gas Transmission & Midstream, responsible for the commercial success and business development of the company’s western-based Canadian gas businesses: BC Pipeline; BC Field Services; Midstream; Canadian LNG and the joint ventures with Alliance Pipeline and Aux Sable. Prior to this position in 2017, Mr. Fiedorek was president of Spectra Energy’s western Canadian operations. He joined Spectra in 1988, beginning his career at Texas Eastern Transmission and advanced through a number of leadership positions including group vice president of Southeast U.S. Transmission and Storage and vice president of Asset Optimization and Marketer Services. Mr. Fiedorek previously served on the board of the Canadian Energy Pipeline Association. He also previously served on the boards of Spectra Energy Partners and DCP Midstream. Mr. Fiedorek earned his bachelor’s degree in managerial studies from Rice University in Houston, Texas. He also completed the Harvard Business School’s Advanced Management Program. Harry Andersen is the Senior Vice president, External Affairs & Chief Legal Officer at Pembina Pipelines, responsible for overseeing Pembina’s land, regulatory and aboriginal relations departments as well as environment and external communications. He has extensive experience in major merger and acquisition transactions, project development, joint ventures, financings, reorganizations and restructurings. Mr. Andersen has considerable experience in most aspects of the energy industry, including: petroleum, natural gas and other product pipelines and related storage and terminalling facilities. He is also experienced in matters related to natural gas storage, processing and other upstream and midstream facilities, traditional and wind power projects and greenhouse gas credits. Mr. Andersen earned his Bachelor of Law degree from the University of Calgary.

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After considering risks associated with the Canadian General Partner's compensation policies and practices and completing a review thereof, the GP Board was of the view that, prior to the Owner-Operator Transition:

• the Canadian General Partner had the proper practices in place to effectively identify and mitigate potential risk, and

• the Canadian General Partner’s compensation policies and practices did not encourage any member of its executive leadership team, or any employee, to take inappropriate or excessive risks, and were not reasonably likely to have a material adverse effect on Alliance Canada.

Officers' Compensation Following the Owner-Operator Transition

Subsequent to the Owner-Operator Transition and pursuant to the Operating Agreements, certain employees of either Enbridge or Pembina serve as the officers of the Canadian General Partner. See “Directors and Officers”. Each of such individuals acts as a director and/or officer of the Canadian General Partner in the course of fulfilling his duties of employment with the applicable Limited Partner (or their respective Affiliates).

As a result, neither Alliance Canada nor the Canadian General Partner pays compensation to any of the current officers of the Canadian General Partner. Aggregate compensation is paid to such individuals by Enbridge or Pembina, as applicable, for serving as an employee of Enbridge or Pembina, respectively, which also includes compensation for their service as a director and/or officer of the Canadian General Partner, although no separate amount of compensation is specifically allocated to those individuals for serving as directors and/or officers of the Canadian General Partner. Information relating to the compensation programs of Enbridge and Pembina, including information relating to the compensation governance and programs and policies of Enbridge and Pembina, can be found in the proxy statement of Enbridge dated March 4, 2019 and the management information circular of Pembina dated March 15, 2019, electronic copies of which are available on the profiles of Enbridge and Pembina, respectively, on the SEDAR website at www.sedar.com.

Director Compensation Alliance Canada does not pay compensation to any of the directors of the Canadian General Partner. Aggregate compensation is paid to such individuals by Enbridge or Pembina, as applicable, for serving as an employee of Enbridge or Pembina, respectively, which also includes compensation for their service as a director of the Canadian General Partner, although no separate amount of compensation is specifically allocated to those individuals for serving as directors of the Canadian General Partner. See “Directors and Officers”. Information relating to the compensation programs of Enbridge and Pembina, including information relating to the compensation governance and programs and policies of Enbridge and Pembina, can be found in the proxy statement of Enbridge dated March 4, 2019 and the management information circular of Pembina dated March 15, 2019, electronic copies of which are available on the profiles of Enbridge and Pembina, respectively, on the SEDAR website at www.sedar.com.

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Directors' and Officers' Insurance

The Canadian General Partner procures a comprehensive directors' and officers' liability insurance program. Subject to policy conditions, this program is intended to cover each individual's liability arising from their duties as a director or officer of the Canadian General Partner, provided such individuals acted honestly and in good faith with a view to the best interests of the Canadian General Partner and Alliance Canada.

CORPORATE GOVERNANCE DISCLOSURE

The GP Board considers good corporate governance to be central to the effective and efficient operation of Alliance Canada. The corporate governance practices of Alliance Canada and the Canadian General Partner are set forth below.

Board of Directors

As of the date of this Annual Information Form, the GP Board consisted of six directors, all of whom are independent as that term is defined in NI 58-101. Under NI 58-101, a director is independent if he or she would be independent within the meaning of NI 52-110. Under NI 52-110, a director is independent if he or she has no direct or indirect material relationship with Alliance Canada. A material relationship is a relationship which could, in the view of the GP Board, be reasonably expected to interfere with the exercise of a director's independent judgement. Certain types of relationships, specified in NI 52-110, are by their nature considered to be material relationships.

Directorships

As of the date of this Annual Information Form, the following directors of the Canadian General Partner are also directors of other issuers that are reporting issuers (or equivalent):

Timothy Curry is a director of Westcoast Energy Inc.

Orientation and Continuing Education

There is no formal orientation program for directors. However, new directors elected or appointed to the GP Board are provided with information relating to the functioning of the GP Board and the Audit Committee, information about the business of the Canadian General Partner and Alliance Canada, and access to management.

The GP Board does not provide formal continuing education for directors. Directors maintain the skill and knowledge necessary to meet their obligations as directors through a combination of their existing education, their experience as businessmen and managers, and their service as

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directors of other issuers, as well as through the advice they receive from Alliance Canada's legal counsel, auditors and other advisers.

Ethical Business Conduct

The GP Board takes various steps to encourage and promote a culture of ethical business conduct by Alliance Canada. The skill and knowledge of the GP Board's members and advice from counsel ensure that directors exercise independent judgement in considering transactions and agreements in respect of which a director or officer has a material interest. The directors of the Canadian General Partner are also subject to the general obligation under corporate law to disclose and not vote on any material contract or transaction with the Canadian General Partner or Alliance Canada in which they have an interest. The GP Board also receives annual training on compliance with Alliance Canada’s Code of Business Conduct, as well as initial and annual training with respect to requirements unique to the pipeline business, contained in the FERC Standards of Conduct. In addition, the directors and officers of the Canadian General Partner are reminded of their compliance obligations at each meeting of the GP Board.

Nomination of Directors

The Amended and Restated Shareholders Agreement governs the nomination of directors to the GP Board. Pursuant to the Amended and Restated Shareholders Agreement, the GP Board is required to have six directors, each of whom is elected by the shareholders of the Canadian General Partner from the nominees put forth by them, in accordance with the cumulative voting provisions of the Canada Business Corporations Act. The Amended and Restated Shareholders Agreement further provides that the chairman of the GP Board is to be appointed by the GP Board at the time of the annual general meeting of the shareholders of the Canadian General Partner. The chairman of the GP Board is required to be rotated on an annual basis among the nominees of the shareholders of the Canadian General Partner.

Assessments

The GP Board, as a whole, has responsibility for assessing the effectiveness of the GP Board, the committees of the GP Board and the contribution of individual directors. This task has not been assigned to any committee of directors of the GP Board and no formal process is in place.

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

As of March 31, 2019, no current or former executive officer, director or employee of the Canadian General Partner was indebted to Alliance Canada or the Canadian General Partner.

INTERESTS OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

To the knowledge of the directors and executive officers of the Canadian General Partner, no director or executive officer of the Canadian General Partner, no person that is the direct or indirect beneficial owner of, or that directly or indirectly exercises control or direction over, more than 10% of the outstanding voting securities of the Canadian General Partner, and no associate

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or affiliate of any of the foregoing, has or has had any material interest, direct or indirect, in any transaction since January 1, 2015 that has materially affected or is reasonably expected to materially affect Alliance Canada, other than as set forth below.

AUDITORS, REGISTRAR AND TRANSFER AGENT

PricewaterhouseCoopers LLP, Chartered Accountants was the auditor of Alliance Canada from March 22, 2005 to April 4, 2019. At the request of Alliance Canada, PricewaterhouseCoopers LLP resigned as the auditor of Alliance Canada effective April 4, 2019.

On April 3, 2019, the GP Board, upon recommendation of the Audit Committee, approved the appointment of MNP LLP as the auditor of Alliance Canada to fill the vacancy created by the resignation of PricewaterhouseCoopers LLP. MNP LLP was appointed as Alliance Canada's auditor effective April 5, 2019.

Additional documents related to the change in auditor, being the Change of Auditor Notice and the acknowledgments of such notice by PricewaterhouseCoopers LLP and MNP LLP are set forth in Appendix C to this Annual Information Form. There were no "reportable events" (within the meaning of National Instrument 51-102 Continuous Disclosure Obligations) in connection with the audits by PricewaterhouseCoopers of Alliance Canada's financial statements for the two most recent financial years and ending on April 4, 2019.

Computershare Trust Company is Alliance Canada's registrar and transfer agent for the Senior Notes, the Senior Unsecured Notes and the Units. The register and transfer books for the Senior Notes and the Senior Unsecured Notes are kept at the principal office of Computershare Trust Company in the City of Calgary, Alberta.

MANAGEMENT CONTRACTS

Pursuant to the terms of the Limited Partnership Agreement, the Canadian General Partner manages and directs the activities of Alliance Canada.

MATERIAL CONTRACTS

The only material contracts Alliance Canada has entered into since January 1, 2002, which are outside the ordinary course of business and still in effect, are the Common Agreement and the Medium Term Note Indenture.

The existing senior indebtedness of Alliance Canada and Alliance USA, which includes the Canadian Facilities, the U.S. Facilities, the Senior Notes and the Senior Unsecured Notes, is governed by a series of finance documents originally entered into in connection with the construction of the System, including: (i) the Common Agreement, which is summarized below; (ii) the Facility Agreements, which establish the Credit Facilities; (iii) the Senior Note Indenture, under which the Senior Notes were issued, (iv) the Security Trust Agreements, which require the use of collateral accounts for the deposit and application of all revenues accruing to Alliance Canada and Alliance USA; (v) the Security Documents, which establish the security for the Credit

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Facilities and the Senior Notes; and (vi) the Intercreditor Agreement, which governs any actions to be taken with respect to the enforcement of the Security Documents.

Terms not defined in the Glossary of Terms of this Annual Information Form but used in this "Material Contracts" section have the meanings ascribed to such terms in Appendix B hereto.

Common Agreement

The Common Agreement is an umbrella document which sets forth, among other things: (i) common representations and warranties, affirmative and negative covenants, events of default and remedies applicable to the Credit Facilities; (ii) certain mechanics for voting and decision-making among the Senior Lenders; (iii) requirements for mandatory and voluntary prepayments; and (iv) the appointment of the Intercreditor Agent to administer the provisions of the Common Agreement and the Intercreditor Agreement and (v) the appointment of the Canadian and U.S. Facility Administrative Agents and Security Trustees. The following description of the terms and conditions of the Common Agreement is intended to be a summary only and readers should refer to the copy of the Common Agreement that is available on Alliance Canada's SEDAR profile at www.sedar.com.

Affirmative Covenants

The affirmative covenants contained in the Common Agreement include:

(a) Maximum Borrowing Amount. Alliance Canada shall ensure that its Senior Debt outstanding does not at any time exceed, by more than US$10 million, the aggregate of:

(i) 70% of the Rate Base applicable to the Alliance Canada Pipeline excluding, to the extent, if any, included in such Rate Base, the DSR Required Amount in connection with the Alliance Canada Pipeline or part thereof on deposit in the Canadian Debt Service Reserve Account in the form of cash, Permitted Investments or Acceptable Credit Support;

(ii) 70% of the proceeds of disposition of any asset previously forming part of the Rate Base applicable to the Alliance Canada Pipeline pending the application thereof in a manner permitted thereby;

(iii) the amount of all capital expenditures actually made by Alliance Canada in respect of an expansion, provided that such amount shall be reduced to 70% of the Rate Base applicable to such expansion six months after the completion of such expansion; and

(iv) the DSR Required Amount.

For the purposes of the calculations contemplated above, the amount of undisbursed proceeds of any Senior Debt and any amount deposited with the

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applicable Security Trustee or depositary to defease Senior Debt will be deducted from Senior Debt.

(b) DSR Required Amount. Alliance Canada shall cause to be deposited with the Canadian Security Trustee cash, Permitted Investments or Acceptable Credit Support equal to its DSR Required Amount.

Negative Covenants

The negative covenants contained in the Common Agreement include:

(a) Limitation on Indebtedness. Alliance Canada shall not create, incur, assume or suffer to exist any Indebtedness, other than Permitted Indebtedness.

(b) Limitation on Liens. Alliance Canada shall not create or suffer to exist or permit any lien upon any of the material assets of the System, other than Permitted Liens.

(c) Limitation on Disposition of Assets. Alliance Canada shall not convey, sell, lease, assign, transfer or otherwise dispose of all or any part of the System or the Collateral other than:

(i) as expressly permitted in or contemplated by any of the Transaction Documents;

(ii) any sales or dispositions made in the ordinary course of business;

(iii) any sales or dispositions made outside the ordinary course of business or any sales or dispositions of surplus, obsolete or worn out equipment having, in either case, an aggregate fair value consideration in any given year not exceeding the Threshold Amount;

(iv) any sales or dispositions of assets to the extent that Alliance Canada acquires substantially similar replacement assets therefor of equal or greater value or utility within one year of such sale or disposition; or

(v) any sales or dispositions of assets at fair market value provided that 90% of the purchase price therefor is satisfied in cash or in assets that will form part of Alliance Canada's Rate Base,

provided, with respect to sales or dispositions referred to in paragraphs (iv) and (v) above, that any cash proceeds of such sale or disposition are either reinvested in the Rate Base of Alliance Canada within one year of such sale or disposition or, at Alliance Canada's option, used within such period to prepay Senior Debt or to make Special Distributions; and provided in each such case that the maximum borrowing amount covenant in the Common Agreement is complied with after giving effect to such application.

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(d) Limitation on Mergers. Alliance Canada shall not merge or consolidate with or into any other person or liquidate, wind up, dissolve or otherwise transfer or dispose of all or substantially all of its property, assets or business unless (i) the surviving entity is Alliance Canada or another entity organized under the laws of Canada or any province thereof; (ii) the surviving entity shall have expressly assumed all of the obligations of Alliance Canada with respect to the Finance Documents; (iii) immediately after giving effect to such transaction or series of transactions, the surviving entity shall have an Investment Grade Rating; (iv) immediately after given effect to such transactions or series of transactions, no potential Event of Default or Event of Default shall have occurred and be continuing; and (v) the surviving entity shall have delivered to the Intercreditor Agent a responsible officer's certificate and an opinion of counsel each stating that such amalgamation, consolidation, merger or sale of assets, as the case may be, complies with the foregoing.

(e) Limitation on Assignment of Transportation Contracts. Alliance Canada shall not consent to any assignment or transfer by any Shipper of its obligations under its Transportation Contract without the prior consent of the Majority Lenders, unless the transferee, or its guarantor, complies with the Shipper Credit Policy.

(f) Distributions. Alliance Canada shall not make any Distribution, except that:

(i) on each Distribution Date, subject, if applicable, to the terms of the Canadian Security Trust Agreement, Alliance Canada may make Distributions so long as, at the time of any such Distribution:

(A) no potential Event of Default or Default shall have occurred and be continuing;

(B) the Canadian Debt Service Reserve Account shall be fully funded or supported to the levels required pursuant to the Common Agreement;

(C) the amount on deposit in the Canadian Debt Service Accounts or, if the conditions to the release of Alliance Canada's obligation to maintain its debt service accounts have been met, the aggregate amount of Alliance Canada's cash and cash equivalents (the "Cash Reserve") is, and immediately following such Distribution would be, equal to or greater than the Required Balance. "Required Balance" means, at any time, the sum of each Debt Service Reserve Amount for each payment of Scheduled Debt Service scheduled to become due within six months, in the case of payments in respect of the Senior Notes, or three months in the case of payments in respect of the Bank Facilities. As used in this definition, "Debt Service Reserve Amount" for any payment of principal, interest

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and associated fees in respect of Senior Notes means the product of the amount of such payment multiplied by a fraction the numerator of which is equal to six minus the number of months (counting any portion of a month as a whole month) remaining until such payment becomes due and the denominator of which is six and in respect of any payment of principal, interest and associated fees in respect of Bank Facilities means the product amount of such payment multiplied by a fraction the numerator of which is equal to the excess, if any, of three over the number of months (counting any portion of a month or a whole month) remaining until such payment becomes due and the denominator or which is three; and

(D) Alliance Canada shall have provided to the Intercreditor Agent a responsible officer's certificate setting forth a calculation of the DSCR for the four preceding fiscal quarters and the projected DSCR for the four succeeding fiscal quarters and such DSCR and projected DSCR (as applicable) are, for Alliance Canada, at least 1.25 to 1; provided that if, on any such Distribution Date, the aggregate of the contracted capacities under Transportation Contracts in good standing is less than 910 mmcf/d, then each of (i) the DSCR for the preceding four fiscal quarters, (ii) the projected DSCR for each successive period of four consecutive fiscal quarters ending before the latest maturity date of any of the Senior Notes then outstanding, and (iii) the projected DSCR for the period, if any, beginning at the end of the last period referred to in (ii) and ending on the latest maturity date of any of the Senior Notes then outstanding shall be at least 1.40 to 1; and

(ii) Alliance Canada may make Special Distributions provided that the conditions set forth in subparagraphs (i)(A), (B) and (C) above are met.

(g) New Credit Facilities. Alliance Canada is prohibited from entering into any new credit facility agreement having terms and conditions substantially more restrictive than those applicable to the Credit Facilities unless Alliance Canada promptly offers to extend to the Lenders the benefit of any such more restrictive terms and conditions.

Permitted Indebtedness

As noted above, Alliance Canada has agreed not to create, incur, assume or suffer to exist any Indebtedness other than Permitted Indebtedness. Permitted Indebtedness includes:

(a) Indebtedness in respect of the Credit Facilities and the outstanding Senior Notes;

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(b) Permitted Replacement Debt, Permitted Additional Debt and Mandatory Debt (each as more particularly described below);

(c) Standby Commercial Paper Facilities and commercial paper issued pursuant thereto;

(d) any obligations of Alliance Canada in respect of any DSR Letters of Credit, any advances made to reimburse the issuing bank for drawings thereunder and any other letter of credit issued under the Credit Facilities;

(e) purchase money Indebtedness (including financing leases) in an aggregate amount not exceeding the Threshold Amount or such greater amount as may from time to time be permitted by the Majority Lenders;

(f) trade or other similar Indebtedness incurred in the ordinary course of Alliance Canada's business and not involving the borrowing of money by Alliance Canada;

(g) Hedging Contracts;

(h) Subordinated Debt which is unsecured;

(i) amounts payable under the Operative Documents;

(j) any Guarantee Obligations in respect of any of the foregoing; and

(k) Indebtedness incurred by an Unrestricted Subsidiary of Alliance Canada so long as neither Alliance Canada nor Alliance USA has any Guarantee Obligations in respect thereof.

(collectively, "Permitted Indebtedness").

Permitted Additional Debt

Permitted Additional Debt is Indebtedness incurred by Alliance Canada which does not otherwise qualify as Permitted Indebtedness under the Common Agreement, if each of the following conditions is met (taking into account the resulting increase in Indebtedness):

(a) after incurrence of such additional Indebtedness and the application of the proceeds thereof, no default or Event of Default shall have occurred and be continuing;

(b) Alliance Canada shall have obtained written evidence that no Ratings Downgrade will occur in respect of the Senior Notes as a result of such increase in the amount of the Indebtedness and the Senior Notes will have at least an Investment Grade Rating from each Relevant Rating Agency; and

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(c) such incurrence of Indebtedness will not violate any Permits or Governmental Consents,

(collectively, "Permitted Additional Debt").

Permitted Replacement Debt

Permitted Replacement Debt is Indebtedness incurred by Alliance Canada to refinance existing Senior Debt from time to time by repaying or prepaying, or cancelling unutilized commitments in respect of, all or any portion of the Senior Debt, provided that:

(a) the principal amount of such Indebtedness may not exceed the principal amount of the Senior Debt being repaid by such Permitted Replacement Debt and the reasonable expenses associated with such refinancing;

(b) if the Senior Debt being replaced was incurred under a Bank Facility and a default or Event of Default shall have occurred and be continuing, then either (i) Alliance Canada shall have obtained written evidence that no Ratings Downgrade shall occur as a result of the incurrence of such Indebtedness, or (ii) such Indebtedness shall have a weighted average life to maturity, calculated in accordance with accepted financial practice, equal to or greater than, and a final maturity date no earlier than, the Senior Debt being replaced;

(c) if the Senior Debt is being replaced by Senior Notes, then Alliance Canada shall have obtained written evidence that no Ratings Downgrade of any then outstanding Senior Notes shall occur as a result of the incurrence of such Indebtedness;

(d) after incurrence and application of such Indebtedness, no default or Event of Default shall have occurred and be continuing; and

(e) such incurrence of new Senior Debt shall not violate any Permits or Governmental Consents,

(collectively, "Permitted Replacement Debt").

Mandatory Debt

Alliance Canada may incur any Indebtedness necessary to fund up to 70% of any capital expenditure that it is required to make to comply with any applicable law ("Mandatory Debt").

Subordinated Debt

Alliance Canada may incur unsecured Indebtedness which is subordinate in priority of payment to the Senior Debt in accordance with the subordination provisions set forth in the Common Agreement ("Subordinated Debt").

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Security

The performance of the Obligations is secured pursuant to the Security Documents. The Canadian Security Trust Agreement governs Alliance Canada's Accounts and sets forth provisions regarding, among other things, the disbursement and application of Cash Flows. Pursuant to the Common Agreement, the Security Trustees are authorized to act on behalf of the Senior Lenders under and in accordance with the Security Documents and to apply the proceeds of any realization of the Collateral in accordance with the priorities set forth in the Common Agreement.

The Collateral consists of senior first priority perfected liens and security interests in the following, to the extent a lien or security interest can be created therein:

(a) all transportation contracts and all documents and security provided by Shippers pursuant to their Transportation Contracts and Firm Service Contracts;

(b) the other Operative Documents (including the proceeds of any insurance policies, the Permits and the Governmental Consents);

(c) the Accounts (except that the Accounts for the proceeds of the Senior Notes will be pledged solely for the benefit of the holders of the Senior Notes);

(d) the Aux Sable Security Documents; and

(e) all of Alliance Canada's real property and tangible personal property.

Senior Note Indenture

A summary of the key provisions of the Senior Note Indenture and the Senior Notes can be found in Alliance Canada’s Short Form Base Shelf Prospectus dated June 12, 2003 under the heading "Description of the Notes and the Indenture" which is available on Alliance Canada’s profile at www.sedar.com.

Medium Term Note Indenture

A copy of the Medium Term Note Indenture has been filed on Alliance Canada’s profile at www.sedar.com. A summary of the key provisions of the Medium Term Note Indenture and the Senior Unsecured Notes can be found in Alliance Canada’s Short Form Base Shelf Prospectus dated December 9, 2009 under the heading "Description of the Notes and the Indenture" which is available at www.sedar.com.

INTERESTS OF EXPERTS

PricewaterhouseCoopers LLP is the former auditor of Alliance Canada and has prepared a report with respect to the financial statements of Alliance Canada as at and for the financial years ended December 31, 2018, 2017 and 2016. PricewaterhouseCoopers LLP has confirmed that, during such periods and up to April 4, 2019, it was independent in accordance with the relevant rules

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and related interpretations prescribed by the relevant professional bodies in Canada and any applicable legislation or regulations.

MNP LLP is the auditor of Alliance Canada effective April 5, 2019 and has confirmed that it is independent in accordance with the relevant rules and related interpretations prescribed by the relevant professional bodies in Canada and any applicable legislation or regulations.

ADDITIONAL INFORMATION

Additional information relating to Alliance Canada may be obtained as follows:

• on Alliance Canada's SEDAR profile at www.sedar.com;

• on Alliance Canada’s website at www.alliancepipeline.com; and

• by written request to the Corporate Secretary of the Canadian General Partner, Suite 200, 425 – 1 Street S.W., Calgary, Alberta T2P 3L8.

Alliance Canada is not required to prepare an information circular. Additional financial information relating to Alliance Canada is provided in Alliance Canada's financial statements and MD&A for its most recently completed financial year, which have been filed on SEDAR.

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APPENDIX A AUDIT COMMITTEE CHARTER

Composition of the Committee

1. The Audit Committee shall consist of a minimum of three (3) directors as determined by the Board of Directors of Alliance Pipeline Ltd. (the "Corporation"). The Audit Committee shall consist of one (1) director from each of the shareholders of the Corporation, with a third director rotated on an annual basis among nominees of the shareholders.

2. All Audit Committee members must be financially literate within the meaning set forth under National Instrument 52-110. Currently, "financially literate" means the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Corporation's financial statements.

3. A majority of the members of the Audit Committee shall not be executive officers, employees, or control persons of the Corporation or an affiliate of the Corporation.

4. The Board of Directors of the Corporation (the "Board") shall appoint the members of the Audit Committee at the first meeting of the Board following each annual meeting of the shareholders of the Corporation (an "Annual Meeting").

5. The Board shall appoint one member of the Audit Committee to be the Chair of the Audit Committee.

6. A director appointed by the Board to the Audit Committee shall be a member of the Audit Committee until the next Annual Meeting or until his or her earlier resignation or removal by the Board. A member shall cease to be a member of the Audit Committee upon ceasing to be a director of the Corporation.

7. The Board may remove or replace any member of the Audit Committee at any time.

8. The Audit Committee shall appoint a Secretary of the Audit Committee.

Meetings of the Committee

1. The Audit Committee shall convene at such times and places designated by the Chair of the Audit Committee on a quarterly basis and whenever else a meeting is requested by the Board, a member of the Audit Committee, the external independent auditors (the "External Auditors"), or a senior officer of the Corporation.

2. Notice of each meeting of the Audit Committee shall be given to each member of the Audit Committee and to the External Auditors, who shall be entitled to attend each

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meeting of the Audit Committee and shall attend whenever requested to do so by a member of the Audit Committee or the Secretary of the Committee.

3. Notice of a meeting of the Audit Committee shall:

(a) be in writing;

(b) state the nature of the business to be transacted at the meeting in reasonable detail;

(c) to the extent practicable, be accompanied by copies of documentation to be considered at the meeting; and

(d) be given at least 72 hours preceding the time stipulated for the meeting, unless such requirement is waived by all of the Audit Committee members.

4. A quorum for the transaction of business at a meeting of the Audit Committee shall consist of two members of the Audit Committee representing both of the shareholders of the Corporation.

5. A member or members of the Audit Committee may participate in a meeting of the Audit Committee by means of such telephonic, electronic or other communication facilities as permit all persons participating in the meeting to communicate adequately with each other, and a member participating in such a meeting by any such means is deemed to be present at that meeting.

6. In the absence of the Secretary of the Audit Committee, the members shall choose one of the persons present to be the Secretary of the meeting.

7. With the consent of a member of the Audit Committee, senior management of the Corporation and other parties may attend meetings of the Audit Committee.

8. The Audit Committee shall make every reasonable effort to meet separately on an in-camera basis with each of the External Auditors, the internal auditor, management and among themselves, without the External Auditors and management, at every meeting.

9. Minutes shall be kept of all meetings of the Audit Committee and shall be signed by the Chair and the Secretary of the meeting.

10. Matters required to be approved by the Audit Committee, at a meeting or by written consent, must be approved by unanimous agreement of all members of the Audit Committee. In the context of a meeting, “unanimous agreement” means agreement of all members of the Audit Committee in attendance at a duly constituted meeting.

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Mandate of the Committee

General Duties

1. The primary duty of the Audit Committee is to assist the Board in the proper discharge of its statutory responsibilities in regard to the review, approval and issuance of the Corporation's financial statements and the financial statements of Alliance Pipeline Limited Partnership (the "Partnership").

2. The Audit Committee will approve on behalf of the Board the quarterly financial statements of the Corporation and the Partnership, the related Management's Discussion and Analysis (the "MD&A") of the Partnership, and any earnings press releases.

3. The Audit Committee will review and recommend for approval by the Board the annual financial statements of the Corporation and the Partnership, the related MD&A of the Partnership, and any earnings press releases.

4. The Audit Committee shall also assist the Board in communicating with the internal and External Auditors, establishing the scope of the external audit and in overseeing the effectiveness and integrity of management information systems, reporting systems and internal controls of the Corporation and the Partnership.

5. The Audit Committee shall establish procedures for receipt, retention and appropriate treatment of complaints against the Corporation or Partnership regarding:

(a) accounting, internal accounting controls, or auditing matters; and

(b) non-compliance with legal or ethical standards,

and for confidentially addressing anonymous submissions by employees or others concerning the matters set out in paragraphs (a) and (b) above. Such procedures shall also provide a forum for employees or others to request and obtain guidance or advice, on an anonymous basis, in respect of any legal, ethical or financial matter.

6. In the performance of any of its duties and responsibilities, the Audit Committee shall have the right to:

(a) inspect any and all of the books and records of the Corporation and the Partnership, their subsidiaries and affiliates;

(b) discuss with any officer or with the internal or External Auditors, such accounts, records and other matters as any member of the Audit Committee considers necessary and appropriate; and

(c) engage, set compensation for and pay independent counsel and other advisors as it determines necessary to carry out its duties.

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7. The Audit Committee shall report the results of reviews undertaken and any associated recommendations to the Board in the manner so agreed with or as directed by the Board. The Audit Committee shall apprise the Board where certain methods and frequency of communication and reporting to the Board is required in order to ensure the proper discharge of Audit Committee responsibilities under this charter.

8. The Audit Committee shall be responsible for ensuring that adequate procedures are in place for the review of the Corporation's public disclosure of financial information extracted or derived from the Corporation's financial statements and must periodically assess the adequacy of those procedures.

Audits and Financial Reporting

Annual financial statements must be reviewed and recommended for approval by the Audit Committee before they are approved by the Board in order to (i) obtain enough information from the Corporation's External Auditors and management to ensure effective discussion of the statements at Board meetings, (ii) determine that the External Auditors are satisfied with the quality, and not just acceptability, of the Corporation's and the Partnership's accounting principles as applied in their financial reporting, and (iii) determine that the External Auditors are satisfied with the financial statement content and disclosure. A review process shall take place for quarterly financial statements before they are approved by the Audit Committee on behalf of the Board. In conducting their quarterly and annual reviews, the Audit Committee shall, as applicable or required:

1. review the annual external audit plan for the Corporation and the Partnership with the External Auditors and with management;

2. review with management and, as deemed necessary, review with the External Auditors, any proposed changes in major accounting policies, the presentation and impact of significant risks and uncertainties, and key estimates and judgements of management that may be material to financial reporting;

3. review with management and with the External Auditors, significant financial reporting issues arising during the fiscal period and the methods of resolution;

4. review any problems experienced by the External Auditors in performing an audit or interim review, including any restrictions imposed by management or significant accounting issues on which there was a disagreement with management;

5. review audited annual financial statements, in conjunction with the report of the External Auditors, and obtain an explanation from management of all significant variances between comparative reporting periods;

6. review the post-audit or management letter containing the recommendations of the External Auditors and management's response, if any, including an evaluation of the

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adequacy and effectiveness of the internal financial controls of the Corporation and the Partnership and subsequent follow-up to any identified weaknesses;

7. review interim unaudited financial statements with the External Auditors and management and discuss the results of the External Auditors' interim review, including any matters required to be communicated to the Audit Committee by the External Auditors under generally accepted auditing standards, before release to the public;

8. review the evaluation of internal controls by the External Auditors with management;

9. enquire as to whether management has designed and implemented an effective system of internal controls over financial reporting through the request and review of management reports or other such means as the Audit Committee deems necessary.

10. review the terms of reference of the internal auditor;

11. review the annual reports and annual plan issued by the internal auditor including the response, if any, of management, and subsequent follow-up to any identified weaknesses;

12. ensure that the manager of internal audit has direct and open communication with the Audit Committee with respect to progress on planned audits, significant audit findings, recommendations made and management's response, and that the manager of internal audit meets regularly with the Audit Committee without management present;

13. direct that the work of the internal and External Auditors provides an appropriate level of audit coverage and is effectively co-ordinated;

14. enquire into and determine the appropriate resolution of conflicts of interest in respect of audit or finance matters between or among any officer, director, shareholder, the internal auditors, or the External Auditors of the Corporation, which are directed to the Audit Committee by the Chairman of the Board, the Board, a shareholder, the internal auditors, the External Auditors, or management; and

15. enquire into and examine any of the financial affairs of the Corporation or the Partnership, their subsidiaries or affiliates, or any of them and, if deemed appropriate, make recommendations to the Board, to the internal auditors, to the External Auditors, or to management.

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The External Auditors

The External Auditors shall report directly to the Audit Committee. Audit Committee practices intended to preserve the independence of the External Auditors shall include the following:

1. discussing with the External Auditors their accountability to the Board and the Audit Committee, as representatives of the shareholders to whom the auditor should be ultimately responsible;

2. reviewing the recommendations of management in respect of the appointment of the External Auditors and recommending to the Board the External Auditors to be put forward for shareholder approval at the Annual Meeting;

3. receiving assurance that the External Auditors participate in oversight programs established by the Canadian Public Accountability Board (the "CPAB") and are participants in good standing with the CPAB;

4. reviewing the terms of the External Auditors' engagement, including the appropriateness and reasonableness of the proposed audit fees and any unpaid fees. Upon satisfactory review, a recommendation shall be presented to the Board for their approval of the external audit engagement and related compensation;

5. receiving a formal written document from the External Auditors detailing all relationships existing between the External Auditors and the Corporation and the Partnership, and pre-approving engagements for non-audit services to be provided by the External Auditors' firm or its affiliates, together with estimated fees, and considering the potential impact of such services on the independence of the External Auditors. The Chair is delegated authority to independently pre-approve non-audit engagements and related fees up to $25,000, for the Canadian and US Alliance Pipeline entities combined, and shall report all such engagements to the Committee at its next regular meeting;

6. when there is to be a change of External Auditors, reviewing all issues and documentation related to the change, including the information to be included in the Notice of Change of Auditors and documentation called for under the policies and procedures specified by the Canadian Securities Administrators, and the planned steps for an orderly transition period; and

7. reviewing all reportable events, including disagreements, unresolved issues and consultations, on a routine basis, whether or not there is to be a change of External Auditors.

Review and Assessment of Audit Committee Mandate

To assist in maintaining leading practices in discharging its mandate, the Audit Committee shall review and reassess its Charter at least annually and shall obtain approval of the Charter from the Board of Directors when changes are proposed.

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APPENDIX B ADDITIONAL DEFINITIONS USED IN

MATERIAL CONTRACTS SECTION

"Acceptable Credit Support" means an irrevocable, unconditional, stand-by letter of credit or guarantee in customary form, issued by a bank, trust company or other entity whose long-term debt is rated "A2" or higher by Moody's and "A" or higher by S&P which may be secured by any or all of the Collateral.

"Accounts" means each collateral account established and maintained by Alliance Canada under the Canadian Security Trust Agreement.

"Aux Sable Security Documents" has the meaning ascribed thereto in the Common Agreement.

"Bank Facility" means any debt facility of Alliance Canada or Alliance USA with banks or other financial institutions.

"Canadian Debt Service Accounts" means the Canadian debt service accounts maintained by the Canadian Security Trustee pursuant to the Canadian Security Trust Agreement.

"Canadian Debt Service Reserve Account" means the Canadian debt service reserve accounts maintained by the Canadian Security Trustee pursuant to the Canadian Security Trust Agreement.

"Canadian Facilities" means the credit facilities of Alliance Canada.

"Canadian Facility Administrative Agent" means The Bank of Nova Scotia.

"Canadian Floating Charge" means a floating charge debenture creating a mortgage and charge, by way of a floating charge, over all of the real property and tangible personal property in which Alliance Canada has an interest from time to time, together with a debenture pledge agreement under which such debenture has been pledged to the Canadian Security Trustee.

"Canadian Note Trustee" means BNY Trust Company of Canada.

"Canadian Security Trust Agreement" means the Third Amended and Restated Canadian Security Trust Agreement, dated as of June 28, 2006, as amended, among Alliance Canada, the Canadian Security Trustee, the Intercreditor Agent, the Canadian Note Trustee and the Canadian Facility Administrative Agent.

"Canadian Security Trustee" means Computershare Trust Company of Canada.

"Cash Flows" generally means all revenues accruing to Alliance Canada, including:

(i) (a) revenues earned: (1) pursuant to the Transportation Contracts, and (2) from amounts in the Accounts, and (b) gains and/or losses arising from any Hedging Contracts;

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(ii) proceeds paid or credited to Alliance Canada from any business interruption insurance policies; and

(iii) all other amounts paid, earned or credited to Alliance Canada in connection with the ownership and operation of the Alliance Canada Pipeline,

but excluding extraordinary gains or losses as determined in accordance with Canadian generally accepted accounting principles, and any provision required by generally accepted accounting principles for regulated entities.

"Cash Reserve" has the meaning ascribed thereto under the heading "Material Contracts – Common Agreement – Negative Covenants - Distributions".

"Collateral" means, all assets, which at any particular time are subject to a lien purported to be created or granted pursuant to any Security document.

"Credit Facilities" means the Canadian Facilities and the U.S. Facilities.

"Debt Service Reserve Amount" has the meaning ascribed thereto under the heading "Material Contracts – Common Agreement - Negative Covenants – Distributions".

"Distribution" means, with respect to either Alliance Canada or Alliance USA, any payment on account of any interest in Alliance Canada or Alliance USA, any payment in respect of Subordinated Debt of Alliance Canada or Alliance USA, any investment by Alliance Canada or Alliance USA in any Unrestricted Subsidiaries and certain other transfers or withdrawals which either Alliance Canada or Alliance USA is permitted to make or direct from the applicable Proceeds Account pursuant to the applicable Security Trust Agreement.

"Distribution Date" means any date within 45 days following each March 31, June 30, September 30, and December 31, on which either Alliance USA or Alliance Canada proposes to make a Distribution (other than a Special Distribution).

"DSR Letter of Credit" means an irrevocable letter of credit issued by a Facility Lender in favour of the Canadian Security Trustee or the U.S. Security Trustee, as applicable, pursuant to the Facility Agreements.

"DSR Required Amount" generally means, at any date, in respect of Alliance Canada, the relevant dollar amount equal to, from such date, six months of Scheduled Debt Service payable by Alliance Canada.

"Events of Default" has the meaning ascribed thereto in the Common Agreement.

"Facility Agreements" means the agreements evidencing the Canadian Facilities and U.S. Facilities.

"Facility Lenders" mean the Lenders pursuant to the Canadian Facilities and the U.S. Facilities.

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"Finance Documents" means, collectively, the Common Agreement, the Facility Agreements, the Note Indentures, the Senior Notes, the Security Documents, the Hedging Contracts, the Intercreditor Agreement, and all corresponding documents relating to Permitted Additional Debt, Permitted Replacement Debt, Mandatory Debt and any reimbursement agreement relating to a DSR Letter of Credit.

"Governmental Consents" generally means, all material authorizations of or with any governmental authority that are required for the ownership, financing, use, operation and maintenance of the System and all such other matters as may be necessary in connection with the System.

"Guarantee Obligations" means guarantee and similar obligations in respect of Indebtedness.

"Hedging Contracts" means, collectively, hedging contracts with respect to interest and currency.

"Indebtedness" means, of any person at any date:

(i) all indebtedness of such person for borrowed money or for the deferred purchase price of property or services (other than current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices);

(ii) any other indebtedness of such person which is evidenced by a note, bond, debenture or similar instrument;

(iii) all obligations of such person under the financing leases;

(iv) all obligations of such person in respect of acceptances issued or created for the account of such person;

(v) all deferred obligations of such person to reimburse any bank or other person in respect of amounts paid or advanced under a letter of credit or other instrument;

(vi) all Guarantee Obligations of such person;

(vii) all net obligations in respect of any interest rate or currency swaps, caps, collars or other similar derivative instruments;

(viii) all indebtedness for borrowed money secured by any lien on any property owned by such person even though such person has not assumed or otherwise become liable for the payment thereof; and

(ix) any other contingent liability of such person which is required by Canadian GAAP or U.S. GAAP, as applicable, to be shown on such person's balance sheet other than as current trade liabilities or deferred taxes or other deferred credits.

"Intercreditor Agent" means The Bank of Nova Scotia.

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"Intercreditor Agreement" means the amended and restated intercreditor agreement dated May 16, 2003 among the Lenders' Representatives, as amended.

"Lenders" means, collectively, all lenders and other credit providers to Alliance Canada and Alliance USA pursuant to the Credit Facilities, the Hedging Contracts, the Senior Notes, the Permitted Additional Debt, the Permitted Replacement Debt or Mandatory Debt.

"Lenders' Representatives" means, collectively, the Facility Administrative Agents, the Intercreditor Agent, the Security Trustees, the Note Trustees and any other similar parties in relation to other Lenders.

"Majority Lenders" generally means Lenders holding at least 66 2/3% of the aggregate outstanding principal amount of Senior Debt.

"Mandatory Debt" has the meaning ascribed thereto under the heading "Material Contracts – Common Agreement – Mandatory Debt".

"NAIC" means United States National Association of Insurance Commissioners.

"Note Indentures" means the Senior Note Indenture and the U.S. Note Indenture.

"Note Trustees" means the Canadian Note Trustee and the U.S. Note Trustee.

"Obligations" generally means:

(i) all loans, advances, debts, liabilities and obligations owed by Alliance Canada and Alliance USA pursuant to the terms of the Common Agreement or any of the other Finance Documents;

(ii) any and all sums advanced by any of the Security Trustees or any Lender or Lender’s Representatives in order to preserve the Collateral or preserve the Lenders' and the Lenders' Representatives security interest in the Collateral; and

(iii) in the event of any proceedings for the collection or enforcement of the Obligations, after an Event of Default shall have occurred and be continuing, the reasonable expenses of retaking, holding, preparing for sales or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Security Trustees and/or the Lenders' and the Lenders' Representatives of any or all of their rights under the Security Documents, together with reasonable legal fees and court costs;

provided that "Obligations" shall not include any Subordinated Debt.

"Operative Documents" includes the principal agreements and documents relating to the operation of the System.

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"Permits" means the permits, authorizations or other approvals issued by the NEB and FERC with respect to the System.

"Permitted Additional Debt" has the meaning ascribed to it under the heading "Material Contracts – Common Agreement - Permitted Additional Debt".

"Permitted Indebtedness" has the meaning ascribed thereto under the heading "Material Contracts – Common Agreement – Permitted Indebtedness".

"Permitted Investments" means deposits of a financial institution whose long-term debt is rated A2 or higher by Moody's, A or higher by S&P, and A or higher by DBRS, obligations of the Governments of Canada and the United States and commercial paper rated at least A-1, R-1, or P-1 by the Rating Agencies and such other investments as may be permitted by the Majority Lenders.

"Permitted Liens" means:

(i) liens securing the Senior Debt (including any Permitted Replacement Debt, Permitted Additional Debt or Standby Commercial Paper Facility) created by or pursuant to the Security Documents or the Common Agreement so long as the Notes are secured equally and ratably with, or prior to, the obligations secured by such liens;

(ii) liens securing purchase money indebtedness (including financing leases) which is Permitted Indebtedness;

(iii) liens or encumbrances arising in the ordinary course of its business (excluding liens of the nature described in subparagraph (ii) above) which would not in the aggregate secure Indebtedness exceeding the Threshold Amount (or such greater amount as may from time to time be permitted by the Majority Lenders) or have a material adverse effect;

(iv) liens limited to interests in Alliance Canada, Alliance USA, the Canadian General Partner and the USA Managing General Partner which are permitted by the applicable constating documents;

(v) liens for taxes or other amounts payable to Governmental Authorities not yet delinquent or being contested in good faith by Alliance Canada; and

(vi) construction liens, builders' liens or mechanics' liens or liens under other similar legislation and other liens and encumbrances arising by operation of law for amounts not yet due or, in each case, for amounts being contested in good faith.

"Permitted Replacement Debt" has the meaning ascribed thereto under the heading "Material Contracts – Common Agreement – Permitted Replacement Debt".

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"Proceeds Account" means the Canadian proceeds account maintained by the Canadian Security Trustee pursuant to the Canadian Security Trust Agreement.

"Rating Agencies" means, collectively S&P, Moody's, DBRS and NAIC.

"Ratings Downgrade" means, at any time, a reduction of the ratings assigned to any Senior Notes issued pursuant to the Note Indentures by any of the Relevant Rating Agencies at such time.

"Relevant Ratings Agency" means Moody's, S&P and DBRS.

"Required Balance" has the meaning ascribed thereto under the heading "Material Contracts – Common Agreement – Negative Covenants".

"Scheduled Debt Service" means, in respect of Alliance Canada, for any period, an amount equal to the sum, without duplication of:

(i) interest due and payable on the Senior Debt of Alliance Canada during such period plus or minus any net amount due and payable in respect of Hedging Contracts during such period;

(ii) scheduled principal due and payable on the Senior Debt of Alliance Canada during such period (excluding any principal which exceeds 70% of the amortization of the Rate Base adjusted to reflect 70% of the current year's provision for deferred taxes during such period and which Alliance Canada reasonably expects to refinance during such period);

(iii) drawing fees, commitment fees, letter of credit fees and other amounts due and payable to the Lenders by Alliance Canada during such period pursuant to the Finance Documents; and

(iv) any amounts payable with respect to the deduction or withholding of tax on such payments.

"Security Documents" generally means the Canadian and U.S. security agreements, the Security Trust Agreements, the Canadian Floating Charge and the Transportation Contract Security.

"Security Trust Agreements" means, collectively, the Canadian Security Trust Agreement and the U.S. Security Trust Agreement.

"Security Trustees" means the Canadian Security Trustee and the U.S. Security Trustee.

"Senior Debt" generally means the principal amounts of Indebtedness of Alliance Canada described in paragraphs (a), (b), (c), (d) and (g) of the definition of "Permitted Indebtedness", the corresponding amounts in respect of Alliance USA outstanding from time to time and any Guarantee Obligations of Alliance Canada or Alliance USA in respect thereof, provided that solely for purposes of the affirmative covenant described under the heading "Material Contracts –

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Covenants – (a) Maximum Borrowing Amount", Senior Debt excludes Indebtedness described in paragraph (g) of that definition but includes Indebtedness described in paragraph (e) of that definition, in each case together with any Guarantee Obligations of either Borrower in respect thereof.

"Senior Lenders" means the Lenders of the Senior Debt.

"Shipper Credit Policy" means the requirements with respect to financial assurances and creditworthiness of Shippers set out from time to time in the tariffs approved from time to time by the FERC or the NEB.

"Special Distribution" generally means (i) a distribution of the net cash proceeds of an asset disposition permitted pursuant to the Common Agreement (ii) a release of funds from the Debt Service Reserve Accounts pursuant to the Security Trust Agreements, (iii) insurance proceeds received by Alliance Canada or Alliance USA in an amount which Alliance Canada or Alliance USA is not required to pay over, or cause to be paid over, to the applicable Security Trustee pursuant to the Common Agreement and which are not required for repair or reconstruction of the System (iv) after termination of the Security Trust Agreements, means any amount to which subparagraph (i) above would have applied if the Security Trust Agreements were then in effect.

"Standby Commercial Paper Facilities" means, a Bank Facility established in part to support a commercial paper program.

"Subordinated Debt" has the meaning ascribed thereto under the heading "Material Contracts – Common Agreement – Subordinated Debt".

"Threshold Amount" means US$20 million (indexed), provided, however, that if Alliance Canada and Alliance USA expends more than US$200 million in connection with one or more expansions, the Threshold Amount shall mean from time to time thereafter the greater of US$20 million (indexed) and 1% of the regulatory rate base of Alliance Canada or Alliance USA, as applicable.

"Transaction Documents" means the Finance Documents and the Operative Documents.

"Transportation Contract Security" means any security provided by a Shipper pursuant to subparagraph (iii) of the definition of "Shipper Credit Policy".

"Unrestricted Subsidiary" means a subsidiary (i) in respect of which neither Alliance Canada nor Alliance USA has any Guarantee Obligations, and (ii) which is a corporation, a limited liability company, a limited partnership or a similar organization which is organized pursuant to laws which limit the liability of investors (including Alliance Canada or Alliance USA, as applicable) for the obligations thereof.

"U.S. Facilities" means the credit facilities of Alliance USA;

"U.S. Facility Administrative Agent" means The Bank of Nova Scotia.

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"U.S. Note Indenture" means the trust indenture dated June 23, 1999 as amended and includes any other indenture or indentures, entered into from time to time, between Alliance USA and the U.S. Note Trustee providing for the issuance of bonds, notes or other evidence of Senior Debt.

"U.S. Note Trustee" means The Bank of New York Mellon.

"U.S. Security Trust Agreement" means the Third Amended and Restated Security Trust Agreement dated as of June 28, 2006, as amended, among Alliance USA, as borrower, Aux Sable Extraction L.P., the Depositary, the U.S. Security Trustee, the U.S. Facility Administrative Agent, the U.S. Note Trustee and the Intercreditor Agent, as amended, in connection with, among other things, the establishment and maintenance of the Accounts.

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APPENDIX C CHANGE OF AUDITOR REPORTING PACKAGE

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NOTICE OF CHANGE OF AUDITOR

Pursuant to Section 4.11 of National Instrument 51-102 – Continuous Disclosure Obligations

TO: PricewaterhouseCoopers LLP, Chartered Professional Accountants AND TO:

MNP LLP, Chartered Professional Accountants

AND TO: Alberta Securities Commission British Columbia Securities Commission Financial and Consumer Affairs Authority of Saskatchewan The Manitoba Securities Commission Ontario Securities Commission Autorité des marchés financiers Financial and Consumer Services Commission (New Brunswick) Nova Scotia Securities Commission Office of the Superintendent of Securities, Service Newfoundland and Labrador Office of the Superintendent of Securities, Consumer, Corporate and Insurance

Services Division, Office of the Attorney General (Prince Edward Island)

Notice is hereby given, pursuant to Section 4.11 of National Instrument 51-102 – Continuous Disclosure Obligations ("NI 51-102"), of a change of auditor of Alliance Pipeline Limited Partnership (the "Partnership") from PricewaterhouseCoopers LLP ("PwC") to MNP LLP ("MNP").

On April 3, 2019, the Board of Directors of Alliance Pipeline Ltd. (the "General Partner"), the general partner of the Partnership, upon recommendation of the Audit Committee of the Board of Directors of the General Partner, approved the appointment of MNP as auditor to fill the vacancy that will be created by PwC's resignation as the Partnership's auditor, at the request of the Partnership, until the next annual meeting of unitholders (or upon the execution of written resolutions that dispense with such) of the Partnership. PwC resigned as the Partnership's auditor effective April 4, 2019 and MNP was appointed as the Partnership's auditor effective April 5, 2019. There were no modifications of opinion by PwC in PwC's reports on the Partnership's financial statements for the two most recently completed fiscal years and ending on April 4, 2019.

There have been no reportable events, including disagreements, consultations or unresolved issues, as defined in Section 4.11 of NI 51-102, in connection with the audits by PwC of the Partnership's financial statements for the two most recent fiscal years and ending on April 4, 2019.

DATED this 3rd day of April, 2019.

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