natural gas pipelines

ENERGY PARTNERS, L.P.

Natural Gas PipelinesNatural Gas Pipelines

Scott ParkerScott Parker

President Natural Gas Pipeline GroupPresident Natural Gas Pipeline Group

2


KMPKMPNatural Gas Pipelines and FacilitiesNatural Gas Pipelines and Facilities

TransColorado

2

2KMTP

KMTejas

KMIGT

Trailblazer

3

KMLP

REX

REX

MEP

NATURAL GAS PIPELINES

NATURAL GAS STORAGE

NATURAL GAS PROCESSING

KM HEADQUARTERS

(2,3,8)INDICATES NUMBER OFFACILITIES IN AREA

ROCKIES EXPRESS PIPELINE

KM LOUISIANA PIPELINE

ROCKIES EXPRESS PIPELINEIN-SERVICE

MIDCONTINENT EXPRESS PIPELINE

2

3


Texas Intrastates Texas Intrastates Trailblazer PipelineTrailblazer Pipeline

Kinder Morgan Interstate Gas Transmission Kinder Morgan Interstate Gas Transmission TransColoradoTransColorado

Midcontinent Express PipelineMidcontinent Express PipelineRockies Express PipelineRockies Express Pipeline

Kinder Morgan Louisiana Pipeline Kinder Morgan Louisiana Pipeline

KMP Natural Gas PipelinesKMP Natural Gas Pipelines

4


�� 6,000 miles of pipeline6,000 miles of pipeline

�� 5 Bcf/d capacity5 Bcf/d capacity

�� 123 Bcf on123 Bcf on--system system storagestorage

�� 915 MMcf/d processing 915 MMcf/d processing capacitycapacity

�� 250 MMcf/d CO2 250 MMcf/d CO2 treating capacitytreating capacity

Katy

Perryville

Carthage

Henry

Waha

Agua Dulce

Kinder Morgan Texas PipelineKMTP StorageKMTP Gas ProcessingKinder Morgan Tejas PipelineKMTejas StorageKMTejas Gas ProcessingNorth Texas PipelineMier-Monterrey PipelineHub

Texas Intrastate PipelinesTexas Intrastate Pipelines

5


Texas Intrastate PipelinesTexas Intrastate PipelinesContinued Growth Continued Growth

Expansion of Existing Assets:Expansion of Existing Assets:�� Completed in 2007:Completed in 2007:

�� 13 miles of 2413 miles of 24”” pipeline, $18 million pipeline, $18 million –– East Texas ExpansionEast Texas Expansion�� 7 Bcf, $41 million 7 Bcf, $41 million –– Markham storage expansionMarkham storage expansion

�� Under Construction in 2008:Under Construction in 2008:�� 63 miles of 2463 miles of 24”” pipeline, $70 million pipeline, $70 million -- Goodrich Pipeline, inGoodrich Pipeline, in--service service

summer of 2008summer of 2008�� An additional 13.5 Bcf of salt storage for inAn additional 13.5 Bcf of salt storage for in--service in 2008 through 2010service in 2008 through 2010

�� Future Growth Projects:Future Growth Projects:�� Continued Storage ExpansionsContinued Storage Expansions�� Potential of 11 gas fired electric power plant projects planned Potential of 11 gas fired electric power plant projects planned thru 2010 thru 2010

near our assets with a potential of up to 1 Bcf/d of incrementalnear our assets with a potential of up to 1 Bcf/d of incremental loadload�� Various pipeline expansion projects: Katy, Goodrich, Motiva refiVarious pipeline expansion projects: Katy, Goodrich, Motiva refinery and nery and

Mexico imports Mexico imports

Large asset footprint provides real and continued opportunities Large asset footprint provides real and continued opportunities for Expansion for Expansion Capital Investment! Capital Investment!

6


Texas Intrastate PipelinesTexas Intrastate PipelinesContinued GrowthContinued Growth

Growth from Existing Assets:Growth from Existing Assets:�� Higher premiums for ratable / swing services, endHigher premiums for ratable / swing services, end--user gas sales, and user gas sales, and

transporttransport�� Value of storage services continues to increaseValue of storage services continues to increase�� Rollovers of sales contracts at higher margins providing year onRollovers of sales contracts at higher margins providing year on year year

growthgrowth�� Improving transport margins on all customers, big CenterPoint Improving transport margins on all customers, big CenterPoint

contract started in 2007 with fullcontract started in 2007 with full--year benefit in 2008year benefit in 2008�� Strong performance from processing, treating and conditioningStrong performance from processing, treating and conditioning

�� Restructured third party processing contracts, providing more vaRestructured third party processing contracts, providing more value to lue to KM with no downside risk. Optimizing pipeline systems to isolatKM with no downside risk. Optimizing pipeline systems to isolate rich e rich gas for transport to processing plants.gas for transport to processing plants.

�� Gas purchase and transport contracts have treating and conditionGas purchase and transport contracts have treating and conditioning ing provisionsprovisions

�� Market value for liquids in 2007 very good; trend to continue inMarket value for liquids in 2007 very good; trend to continue in 20082008�� Steady performance in GLUSteady performance in GLUContinued Continued ““base hitsbase hits”” add up to continued year on year growth!add up to continued year on year growth!

7


Trailblazer Pipeline CompanyTrailblazer Pipeline Company

Cheyenne Hub

Denver

Lincoln

ColoradoSprings

Cheyenne

NebraskaNebraska

KansasKansasColoradoColorado

WyomingWyoming

HuntsmanStorage

601602

603

104

194

105

195

106

TrailblazerTrailblazer

�� 436 Miles of Pipe436 Miles of Pipe

�� 3 Compressor Locations with 3 Compressor Locations with 58,000 HP58,000 HP

�� Max Throughput = 0.878 Max Throughput = 0.878 Bcf/dBcf/d

�� Low cost pipeline out of Low cost pipeline out of regionregion

�� Long term contractsLong term contracts

Trailblazer PipelineNGPLKMIGT

8


�� 4,500 miles of various 4,500 miles of various diameter pipelinesdiameter pipelines

�� Markets:Markets: LDCs, Industrials, & Ag. LDCs, Industrials, & Ag.

In NE, KS, & MOIn NE, KS, & MO

Marketers transporting to Marketers transporting to midmid--continent pipelinescontinent pipelines

End Users including End Users including Ethanol PlantsEthanol Plants

�� Growth:Growth: Colorado LateralColorado Lateral StorageStorage Ethanol PlantsEthanol Plants

�� Capacity Capacity Transp. 830 MDth/dTransp. 830 MDth/d

Storage 10 BcfStorage 10 Bcf

Wyoming

Colorado

Nebraska

Kansas

CheyenneHub

Kinder Morgan Interstate Gas Transmission (KMIGT)Kinder Morgan Interstate Gas Transmission (KMIGT)

9


KMIGT Growth ProjectsKMIGT Growth Projects……�� New LDC Connection New LDC Connection -- Colorado Lateral is a new pipeline along the front Colorado Lateral is a new pipeline along the front

range.range. KMIGT has a long term binding transport agreement and is moving KMIGT has a long term binding transport agreement and is moving

forward to construct a $29 million pipeline forward to construct a $29 million pipeline InIn--service October 1service October 1stst, 2008 , 2008 Potential of future expansions to serve marketPotential of future expansions to serve market

�� Demand from Ethanol Plants Demand from Ethanol Plants -- In excess of 100 MDth/d of potential demand In excess of 100 MDth/d of potential demand exists via proposed new ethanol plants or plant expansionsexists via proposed new ethanol plants or plant expansions

Initial $22 million expansion under wayInitial $22 million expansion under way•• InIn--service Sept 1service Sept 1stst, 2008, 2008•• Provides incremental service to five plants Provides incremental service to five plants •• LongLong--term binding contracts with high steady flow rates and credit term binding contracts with high steady flow rates and credit

supportsupport Potential for additional expansion projects totaling from $25 toPotential for additional expansion projects totaling from $25 to $50 million$50 million

�� Storage OpportunitiesStorage Opportunities Evaluating small economic 1 to 3 Bcf expansions of existing storEvaluating small economic 1 to 3 Bcf expansions of existing storage fields.age fields. Acquired rights to green field storage project with potential ofAcquired rights to green field storage project with potential of up to 5 Bcf up to 5 Bcf

of working gasof working gas

10


TransColoradoTransColorado�� 301 miles of 22301 miles of 22”” & 24& 24”” pipelinepipeline

�� Originates at Greasewood COOriginates at Greasewood CO

�� Terminates at Blanco, NMTerminates at Blanco, NM

�� Bidirectional FlowBidirectional Flow

Capacity North Capacity North -- 650 MDth/d650 MDth/d

Capacity South Capacity South

•• Phase I Phase I -- 150 MDth/d150 MDth/d

•• Phase II Phase II -- 425 MDth/d425 MDth/d

TransColorado PipelineTransColorado Pipeline

11


TransColorado Growth ProjectsTransColorado Growth Projects……

Completed 250,000/day expansion for northbound capacity from BlaCompleted 250,000/day expansion for northbound capacity from Blanco to nco to REX PipelineREX Pipeline

�� $68 million capital investment$68 million capital investment

�� Fully subscribed by ConocoPhillipsFully subscribed by ConocoPhillips

�� InIn--service Jan 2008service Jan 2008

Potential:Potential:

�� New Producer Interconnects for example, Exxon Piceance CreekNew Producer Interconnects for example, Exxon Piceance Creek

�� TransColorado Hub ServiceTransColorado Hub Service

�� New Flexible Firm ServicesNew Flexible Firm Services

�� Phase 1 (Blanco) expansion Phase 1 (Blanco) expansion

12


EnogexEnogexWestWest EnogexEnogex

EastEast

WaynokaWaynokaPlantPlant

Project Facilities Summary

Diameter Miles Zone Capacity From - To30” 40 1 850,000 Enogex to 80242” 262 1 1,400,000 802 to End of Zone 136” 197 2 1,000,000 Begin Zone 2 to TranscoTotal 499

Midcontinent Express PipelineMidcontinent Express Pipeline

13


�� 50/50 Joint Venture with ETC50/50 Joint Venture with ETC Key driver Key driver –– Increasing production in Texas and OklahomaIncreasing production in Texas and Oklahoma Kinder Morgan coordinating construction and will operateKinder Morgan coordinating construction and will operate

�� MEP to Construct:MEP to Construct:•• 40 miles of 3040 miles of 30””, 257 miles of 42, 257 miles of 42”” and 197 miles of 36and 197 miles of 36””•• 70,900 of horsepower at two compressor stations70,900 of horsepower at two compressor stations•• Total projected cost $1.3 Billion Total projected cost $1.3 Billion

�� Customer Commitments:Customer Commitments: 1.0 Bcf/d of long term, binding commitments finalized in 20071.0 Bcf/d of long term, binding commitments finalized in 2007 0.25 Bcf/d of commitments being finalized in January 0.25 Bcf/d of commitments being finalized in January ’’0808 Expect to sell out the project prior to inExpect to sell out the project prior to in--serviceservice

�� Future Expansion Opportunity is Real:Future Expansion Opportunity is Real: Significant production increases in the area upstream of the proSignificant production increases in the area upstream of the projectject Kinder Morgan & ETC footprints provide supply access to the projKinder Morgan & ETC footprints provide supply access to the projectect Potential greenfield storage development along the route Potential greenfield storage development along the route

Midcontinent Express Pipeline (MEP)Midcontinent Express Pipeline (MEP)

14


Key Items:Key Items:

�� Major material acquired within budget Major material acquired within budget (pipe, compression & valves)(pipe, compression & valves)

�� Agreements executed with construction contractorsAgreements executed with construction contractors

�� InIn--service date for entire system projected March 1, 2009service date for entire system projected March 1, 2009

Schedule going forward:Schedule going forward:

•• Draft EIS Draft EIS –– Feb Feb ‘‘0808

•• Final EIS Final EIS –– June June ‘‘0808

•• FERC Certificate FERC Certificate –– July July ‘‘0808

•• Begin Construction Begin Construction –– July/Aug July/Aug ‘‘0808

•• InIn--service service –– March 1March 1stst, 09 (potential early in, 09 (potential early in--service for segments)service for segments)

Midcontinent Express Pipeline (MEP)Midcontinent Express Pipeline (MEP)

15


Rockies Express Pipeline-In-service

Rockies Express Pipeline-REX East

Lease of Overthrust Pipeline Capacity

Natural Gas Pipeline Company of America

Kinder Morgan Interstate Gas Transmission

TransColorado Gas Transmission

Trailblazer Pipeline

REX Compressor Station

REX East Compressor Station

Hub

OpalKanda Wamsutter

GreasewoodMeeker

Blanco

Cheyenne Lebanon

Clarington

OVER-THRUST

CAPACITYLEASE

R O C K I E S E X P R E S S P I P E L I N E

REX EASTREXIN-SERVICE

1,800,000 Dth/d - 7/20091,500,000 Dth/d - 2/2008 1,600,000 Dth/d - 12/2008

PIPELINE – 1,679 MILES COMPRESSION – 460,000 Hp

Rockies Express Pipeline (REX)Rockies Express Pipeline (REX)

16


REX West SpreadsREX West SpreadsInIn--service Jan 12th up to the ANR Interconnectservice Jan 12th up to the ANR Interconnect

17


Project Overview Project Overview –– Rockies ExpressRockies Express

�� REX West REX West –– Construction is winding down:Construction is winding down:

Commenced Interim Service Deliveries into NNG, NGPL and ANR on Commenced Interim Service Deliveries into NNG, NGPL and ANR on January January 12, 2008 12, 2008

•• 1.4 Bcf of capacity1.4 Bcf of capacity

Expect to Commence Full Service on REX West to include PEPL (AudExpect to Commence Full Service on REX West to include PEPL (Audrain rain County, Mo.) in mid February, 2008 County, Mo.) in mid February, 2008

•• 1.5 Bcf/d of capacity1.5 Bcf/d of capacity

�� REX East REX East –– Will be constructed in 2008 & 2009:Will be constructed in 2008 & 2009:

Expect to Commence Deliveries at Clarington, Ohio near the end oExpect to Commence Deliveries at Clarington, Ohio near the end of 2008 f 2008

�� REX Pipeline capacity is sold out under long term binding commitREX Pipeline capacity is sold out under long term binding commitmentsments

�� Total Projected Cost (Entrega & REX) = $4.89 Billion (up from $4Total Projected Cost (Entrega & REX) = $4.89 Billion (up from $4.43).43)

Entrega & REX West under budget, REX East projected to be over bEntrega & REX West under budget, REX East projected to be over budgetudget

As of InAs of In--service of the pipeline ownership will be: Kinder Morgan 50 %, Sservice of the pipeline ownership will be: Kinder Morgan 50 %, Sempra empra Pipelines & Storage 25% and Conoco 25%Pipelines & Storage 25% and Conoco 25%

18


REX East DetailREX East Detail

2008 Construction:2008 Construction:�� FERC approval anticipated in Spring 2008.FERC approval anticipated in Spring 2008.

�� Commencement of construction soon after FERC approval received.Commencement of construction soon after FERC approval received.

�� Partial inPartial in--service date for REX East Dec 31st, 2008 (to Clarington).service date for REX East Dec 31st, 2008 (to Clarington).

�� Full 1.8 Bcf inFull 1.8 Bcf in--service (all compression) June 1service (all compression) June 1stst, 2009., 2009.

Material and Contractor update:Material and Contractor update:�� Pipe on order and on schedule for constructionPipe on order and on schedule for construction

�� Compression ordered and on schedule for constructionCompression ordered and on schedule for construction

�� RightRight--ofof--way 60% acquiredway 60% acquired

�� Construction contractor agreements in placeConstruction contractor agreements in place

Projecting cost increases above budget for pipeline constructionProjecting cost increases above budget for pipeline construction (labor, equipment (labor, equipment and incidentals have all seen escalations)and incidentals have all seen escalations)

19


REX Future OpportunitiesREX Future Opportunities……

Significant additional growth potential via other opportunities Significant additional growth potential via other opportunities to be to be capturedcaptured……

�� Storage and Park and Loan ServiceStorage and Park and Loan Service

Development and sale of storage off the pipelineDevelopment and sale of storage off the pipeline

�� Interruptible and short haul serviceInterruptible and short haul service

�� Hub service at various key locationsHub service at various key locations

�� Extensions and expansions off the projectExtensions and expansions off the project

Continue to look at opportunities to extend the pipeline Continue to look at opportunities to extend the pipeline further eastfurther east

Opportunities to connect additional markets along the wayOpportunities to connect additional markets along the way

20


1.0 Bcf/d Expansion1.5 Bcf/d Extension

Hub Service

Proposed REX Northeast ExpressProposed REX Northeast Express

21


21

Proposed REX / NGPL Chicago ProjectProposed REX / NGPL Chicago Project

22


!

!!

! !

(

((

(

(

(

(

(

(

(

(

(

(

(

((

Texas Louisiana

Lake Charles LNGSouthern Union Co.

Cameron LNGSempra Energy

Creole TrailCheniere LNG, Inc.

Sabine PassCheniere LNG, Inc.

Golden PassExxonMobil Energy

Port ArthurSempra Energy

Sabine Pass LNG TerminalLeg 1 Receipt PointLeg 2 Receipt Point

CGT Delivery Point

FGT Delivery Point

ANR Delivery Point

TETCO Delivery Point

Sabine Delivery Point

Transco Delivery Point

Cypress Delivery Point

Trunkline Delivery Point

Tennessee Delivery Point

Bridgeline Delivery Point

Southwest Loop Delivery Point

NGPL Delivery Point

Texas Gas Delivery Point

Southwest Loop-Johnson's Bayou Del. Pt.Houston

Texas City

Beaumont

LafayetteLake Charles

Galveston

Henry Hub346

342

343

302

340

Proposed Kinder Morgan Louisiana PipelineLeased Capacity on NGPLProposed InterconnectsLNG Terminal LocationNatural Gas Pipeline Company of AmericaNGPL Compressor Station 22

Kinder Morgan Louisiana Pipeline LLCKinder Morgan Louisiana Pipeline LLC

23


Capital Capital -- $510 MM$510 MM-- Construction has commenced!!Construction has commenced!!

Project Description Project Description �� Rayne Lateral (Leg 1)Rayne Lateral (Leg 1)

137 miles 42137 miles 42””

2,130,000 Dth/d2,130,000 Dth/d

InIn--service Jan 1st, 2009service Jan 1st, 2009

�� NGPL Lateral (Leg 2)NGPL Lateral (Leg 2)

1 mile 361 mile 36””

1,597,500 Dth/d1,597,500 Dth/d

Includes 200,000 Dth/d of lease capacity on NGPL to JohnsonIncludes 200,000 Dth/d of lease capacity on NGPL to Johnson’’s s Bayou Southwest Loop areaBayou Southwest Loop area

InIn--service by September 1st, 2008service by September 1st, 2008

Sabine PassFacility

NGPL Lateral1, 597,500 Dth/d Rayne Lateral

2,130,000 Dth/d

Kinder Morgan Louisiana PipelineKinder Morgan Louisiana Pipeline

24


Initial Project Capacity is Sold OutInitial Project Capacity is Sold Out……

Executed Precedent Agreement with Chevron USAExecuted Precedent Agreement with Chevron USA�� MDQ: 1,697,500 DthMDQ: 1,697,500 Dth

�� Negotiated Rate: Fixed for term of contractNegotiated Rate: Fixed for term of contract

�� Term: 20 yearsTerm: 20 years

Executed Precedent Agreement with Total Gas & Power Executed Precedent Agreement with Total Gas & Power North America, IncNorth America, Inc�� MDQ: 1,697,500 Dth/dMDQ: 1,697,500 Dth/d

�� Negotiated Rate: Fixed for term of contractNegotiated Rate: Fixed for term of contract

�� Term: 20 yearsTerm: 20 years


25


Beyond the Initial ProjectBeyond the Initial Project…… Future Growth Potential:Future Growth Potential:�� Continue discussions with multiple parties to potentially expandContinue discussions with multiple parties to potentially expand the the

capacity of the pipeline (with LNG upstream supply schedules extcapacity of the pipeline (with LNG upstream supply schedules extending ending discussions have continued)discussions have continued)

Potential for an additional 300,000 to 1 Bcf of expansion capaciPotential for an additional 300,000 to 1 Bcf of expansion capacityty

Capex ranging from an additional $50 Capex ranging from an additional $50 -- $150 million$150 million

�� Potential to connect to additional LNG Plants and / or storage fPotential to connect to additional LNG Plants and / or storage facilitiesacilities

�� Smaller Opportunities Include:Smaller Opportunities Include:

ShortShort--haul, IT and PALs serviceshaul, IT and PALs services


26


Base business growth on existing assetsBase business growth on existing assets……

�� ReRe--contract existing pipeline and storage capacitycontract existing pipeline and storage capacity

�� Capture margin growth on existing capacityCapture margin growth on existing capacity

Growth opportunities from new projects focused onGrowth opportunities from new projects focused on……

�� Midcontinent Express, Rockies Express and KM Louisiana PipelineMidcontinent Express, Rockies Express and KM Louisiana Pipeline

�� New Projects to enhance or expand these Major ProjectsNew Projects to enhance or expand these Major Projects

�� Storage (acquisition, development and expansions) Storage (acquisition, development and expansions)

�� Continued development of pipeline and storage projects off the eContinued development of pipeline and storage projects off the existing asset xisting asset basebase

�� Continue to compete for new projects like MEPContinue to compete for new projects like MEP

Reinvest in existing assetsReinvest in existing assets……

�� Operate a safe and reliable pipelineOperate a safe and reliable pipeline

�� Continue as smart low cost operatorContinue as smart low cost operator

KMP Gas Pipeline GroupKMP Gas Pipeline GroupThe FutureThe Future……

natural gas pipelines

Documents