Slide 1

Presentation to the Wyoming Pipeline Authority Update on Kinder Morgans Oil Springs Storage Field Expansion Project March 23, 2004 Slide 2 2 Kinder Morgan System Map NGPL NGPL Storage Retail Natural Gas Division Products Pipelines Products Pipeline Terminals Transmix Facilities Natural Gas Pipelines Natural Gas Storage Natural Gas Plants Gas-Fired Power Plants CO 2 Pipelines Terminals Indicates # of Facilities in area (2,3,10) Kinder Morgan Headquarters, Houston, Texas 2 3 2 4 10 2 2 2 2 KMCO 2 PACIFIC COCHIN PACIFIC CALNEV NORTH PLANTATION CFPL KMIGT KMTP KM TEJAS 2 NGPL 3 Slide 3 3 Oil Springs Storage Field Expansion Project Cheyenne Hub Casper Sheridan Gillette Denver Oil Springs Storage Field POWDER RIVER BASIN BIG HORN WIND RIVER HANNA D-J BASIN WASHAKIE N E B R A S K A C O L O R A D O W Y O M I N G Huntsman Storage Proposed Lateral KMICD (formerly NGC) KMIGT CIG WIC SOUTHERN STAR PROP. KMIGT ADVANTAGE TRAILBLAZER THUNDER CREEK FT. UNION MIGC/MGTC GAS STORAGE COMPRESSOR STATION MARKET HUB GAS SUPPLY BASIN Slide 4 4 Oil Springs Storage Field General Information Located in eastern Carbon County, Wyoming on the southern leg of Kinder Morgan, Inc.s (Casper Division) pipeline system approximately 10 miles northwest of Medicine Bow, midway between Rawlins and Laramie. Storage services are currently an integrated component of the cost of service of Kinder Morgan, Inc.s Casper Division subject to the jurisdiction of the Wyoming Public Service Commission. Currently used to supply seasonal and peak day needs for Kinder Morgan, Inc.s Retail distribution system in conjunction with the Bunker Hill Storage Field located in northwestern Carbon County and the Kirk Ranch Storage Field located in southeastern Fremont County. Current annual cycling capability of 1.0 to 1.6 Bcf from all three fields (0.5 to 0.8 Bcf from Oil Springs, 0.3 to 0.5 Bcf from Bunker Hill and 0.2 to 0.3 Bcf from Kirk Ranch). Slide 5 5 Oil Springs - Project Summary Expand storage capability and off system utilization. Access Interstate Pipeline(s). Reduce storage costs for Wyoming retail customers. Enhance reliability and efficiencies for Wyoming retail customers. Provide direct storage access and greater control and flexibility for third party users. No capital investment by utility or rate base increase to Wyoming retail customers as a result of this project. Slide 6 6 Oil Springs - Proposed Services Meeting the Needs of the Wyoming Marketplace Proposed Storage Services to include: Firm Storage Service. Interruptible Storage Service. Parking and Lending Services. Other Market Center Services. Maintain current LDC cycling capability to continue serving Wyoming retail customers: New pipeline would interconnect with KMIs existing pipeline. Slide 7 7 Oil Springs - Project Description Expanded Storage Capabilities Expand annual field cycling capability up to 11 Bcf *. Increase injection capabilities up to 67 MMcf/d *. Increase withdrawal capabilities up to 133 MMcf/d *. New capital construction to include: Drilling additional injection / withdrawal wells. Expanding the field gathering system. Constructing a pipeline of sufficient diameter from Oil Springs down to the I-80 pipeline corridor which contains CIG, WIC and Southern Star pipelines. Installing additional compression horsepower and dehydration facilities. (* Or more, based on field characteristics and contractual commitments.) Slide 8 8 Oil Springs - Project Description Cushion Gas Sale New capital investment will result in excess cushion gas which Kinder Morgan would sell to help fund the project. KMIs (Retail) rate base correspondingly reduced. Cushion gas may be sold in place in lieu of initial injections. Slide 9 9 Oil Springs - Project Timeline Obtain Shipper support to justify enhanced reservoir modeling and geologic / seismic reviews. Presentation to the Wyoming Public Service Commission. Reservoir modeling and geologic / seismic reviews. Open Season. Obtain FERC Certification. Field expansion and facilities and pipeline construction. 2006 In-service date Commence injections. Slide 10 10 Oil Springs - Project Benefits To State of Wyoming & Retail Customers Reduction in KMI (Retail) rate base. Reduction in Storage Operations costs due to improved productivity and economies of scale. Enhanced KMI system reliability: Pipeline looping. Supplemental horsepower. New interconnect capabilities. Economic development benefits for other sectors of the Wyoming economy based on significant investment and gas infrastructure development for the state. Contributes to stated goals of the Wyoming Pipeline Authority. Slide 11 11 Oil Springs - Project Benefits Third Party Users Market competitive storage services. Operational efficiencies due to economies of scale. Use of Existing Cushion Gas. Pricing Arbitrage. Production area storage. Slide 12 12 Kinder Morgan Energy Partners, L.P. General Information Kinder Morgan Energy Partners, L.P. (KMP) is a Master Limited Partnership (MLP) traded on the NYSE. KMPs assets located in Wyoming include: Kinder Morgan Interstate Gas Transmission. Kinder Morgan Operating L.P. A (Casper / Douglas). Thunder Creek Gas Services (non-operating partnership interest). Trailblazer Pipeline Company (portion of line runs through SE Wyoming). Slide 13 13 Continuing Support from the WPA Directly, Support Kinder Morgan in its efforts to obtain WPSC and/or FERC approval for the expansion of Oil Springs Encourage the State of Wyoming to take its gas in-kind for royalty purposes and contract for storage space at Oil Springs Encourage tax incentives, e.g. reduced ad valorem taxes on pipeline expansions Indirectly, Support the Wyoming DEQ in their efforts Support the State Lands office, BLM and various BIA agencies in their efforts Support the industry in terms of responding to environmental assessment requests Encourage the BLM/MMS to take its gas in-kind for royalty purposes