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July 17, 2014 Lakewood, Colorado

Pony Express Pipeline Uncommitted Shipper Meeting. July 17, 2014 Lakewood, Colorado. Confidential Presentation. Introduction. Steven Kelley – Scheduler, Oil Logistics. Pony Express Pipeline – Meeting Agenda. Introduction – Steve Kelley, Scheduler Oil Logistics

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July 17, 2014 Lakewood, Colorado

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  1. Pony Express Pipeline Uncommitted Shipper Meeting July 17, 2014 Lakewood, Colorado Confidential Presentation

  2. Introduction Steven Kelley – Scheduler, Oil Logistics

  3. Pony Express Pipeline – Meeting Agenda • Introduction – Steve Kelley, Scheduler Oil Logistics • Construction Update – Doug Johnson, General Manager • Line Fill • PXP Web Site – www.TallgrassEnergyLP.com • Credit Application • -- Break Time -- • Nominations / Prorations / Scheduling • Regulatory Filings / Tariff • Accounting Processes – Mona Walker, Manager Operation Accounting • Tallgrass PXP Contacts

  4. PXP Construction Status Doug Johnson – General Manager

  5. System Map CONFIDENTIAL

  6. Pony Express Pipeline – Construction Update • PXP Construction Update • Mainline – 20”, 22”, 24” • New 24” Build, Lincoln County, KS to Cushing, OK • Conversion Pipe: Guernsey – Lincoln Co. KS • Guernsey Station • Mainline Pump Stations • Hydro-test: • Conversion Pipe 19/32 sections complete • New Build 4/9 sections complete • DeeprockTerminal – Cushing, OK • Ponca City Lateral • Northeast Colorado Lateral (NECL) • Pipeline • Sterling Tank Farm

  7. Pony Express Terminus at Cushing • Deeprock • Tanks • 3 existing tanks • 6 new tanks completed • Twin 24-inch pipelines to connecting terminals • Interconnections • Tariff includes delivery to Rose Rock, Blue Knight, Enbridge, Plains, or Enterprise • Additional fee by Deeprock for deliveries to: • NGL • Seaway

  8. NECL Northeast Colorado Lateral – Sterling • Pawnee Lateral - 13 miles of 16” • Buckingham Lateral - 54 miles of 20” • Sterling Tank Farm – 6 new tanks under construction. • 4 – 250,000 • 2 – 150,000 • 5 additional pump stations on the PXP mainline.

  9. Line Fill Process

  10. System Map

  11. Line Fill • Three pipeline segments: 20”, 22”, and 24” • 20” pipeline, 139 miles • 22” pipeline, 242 miles • 24” pipeline, 312 miles • Storage tank (~130,000 bbl working capacity) has been secured at Ft. Laramie to assist with operational flexibility during line fill • July • Begin oil flood of Guernsey pump station on/about 7/22 • Line fill will begin on/about 7/23 • August/September • Complete remaining 22” line fill • Complete 24” Section line fill

  12. Uncommitted Shipper Meeting - July 17 – Lakewood, CO Steven Kelley - Scheduler, Oil Logistics

  13. Somewhere in Wyoming

  14. PXP Guernsey Station

  15. Deeprock-Cushing to PXP Delivery Points

  16. Shipper Meeting – July 17 – Lakewood, CO www.TallgrassEnergyLP.com

  17. www.TallgrassEnergyLP.com

  18. System Map

  19. System Map

  20. Pony Express Pipeline (PXP)- System Information

  21. Pony Express Pipeline – Nomination Information

  22. PXP – Common Stream Descriptions

  23. PXP – Information for Walk-Up Shippers

  24. PXP – Information for Walk-Up Shippers

  25. PXP – Information for Walk-Up Shippers

  26. PXP – Information for Walk-Up Shippers

  27. PXP – Information for Walk-Up Shippers

  28. PXP – Rules and Regulations

  29. PXP – Tariff Rates

  30. PXP - Forms

  31. PXP – Credit Application Form

  32. PXP – Credit Application • CONTACT INFO: • Kevin O’Brien • Treasury Manager • 303-763-3406 • Kevin.Obrien@TallgrassEnergyLP.com

  33. PXP – Credit Application • Potential shippers are encouraged to arrange credit at the earliest possible time. • PXP will only consider nominations for which credit arrangements have been made prior to nomination, or for nominations accompanied by an acceptable Letter of Credit or full prepayment.

  34. Nominations • --- Break Time ---

  35. Guernsey Tank Farms

  36. Common Stream Descriptions • Pony Express is a “multiple common stream” carrier. Pony Express will transport batches of up to three common streams from its Guernsey origin, and a fourth common stream from northeastern Colorado. The initial common streams are characterized as: • BLS - The Bakken Light Sweet common stream or “BLS” will originate at Guernsey and will contain not greater than .2% sulfur and will have an API gravity of not less than 40 degrees or more than 46 degrees. • MXS - The Mixed Sweet common stream or “MXS” will originate at Guernsey and will contain not greater than .5% sulfur and will have an API gravity of not less than 30 degrees or more than 38 degrees. • GWI - The Guernsey Wyoming Intermediate common stream or “GWI” will originate at Guernsey and will contain not greater than .42% sulfur and will have an API gravity of not less than 36 degrees or more than 42 degrees. • NIO - The Niobrara common stream or “NIO” will originate at receipt points on the NECL and will contain not greater than .42% sulfur and will have an API gravity of not less than 36 degrees or more than 42 degrees.

  37. Nominations • Material Safety Data Sheets (MSDS) • Initial Nominations must be accompanied by an appropriate MSDS. • Nominations lacking the appropriate MSDS will not be considered.

  38. Nominations • Nominations • Ten Percent (10%) of Available Capacity is for Uncommitted Shippers • Belle Fourche Joint Tariff = 12,200 bpd / 370,000 bpm • Hiland HH Joint Tariff = 4,200 bpd / 127,000 bpm • Local PXP Tariff = 6,100 bpd / 185,000 bpm • (figures are approximate)

  39. Nominations • Nominations (continued) • All Nominations are due to PXP by 5:00 PM Central Time on the 20th calendar day or the preceding business day if the 20th is on non-business day. • All Nominations must include: • Receipt Point: • Guernsey- PXP / Belle Fourche Joint Tariff • Guernsey- PXP / Hiland Joint Tariff • Guernsey- PXP Local Tariff • Delivery Point: • Oklahoma • Other future sites • Destination: • Rose Rock, BKEP, Enbridge, Plains, Enterprise, NGL (8¢), • Seaway (10¢), Ponca City (Phillips 66), or to LINEFILL.

  40. Nominations • All Nominations must include: • Crude Type: • BLS – Bakken Light Sweet • MXS – Mixed Sweet • GWI – Guernsey Wyoming Intermediate • NIO - Niobrara • Volume: • In Barrels per Day (bpd) • By grade • By destination • Minimum Nomination is 10,000 bbls per month per Silo. • Can be different grades to total 10,000 bbls • DO NOT OVER NOMINATE ! • Awarded Nominations are BINDING !

  41. Nominations - • Nominations (continued) • Nominations for shipments on The Belle Fourche – PXP Joint Tariff must be made to and confirmed by both BFPL and PXP. • Nominations for shipments on The Hiland - PXP Joint Tariff must be made to and confirmed by both Hiland and PXP. • Shipments originating at Guernsey under the PXP Local Tariff require Nomination and confirmation by PXP, and will need to be confirmed by the applicable upstream Carrier.

  42. PXP – Nomination Form

  43. Nominations • Nominations (continued) • All initial nominations must also include additional volume of 27% for pro rata LINEFILL. • EXAMPLE: • 1st month Nomination 10,000 bbls • 1st month ProRataLinefill 2,700 bbls • 2nd month Nomination 15,000 bbls • 2nd month ProRataLinefill 1,350 bbls

  44. Nominations • In-Line Transfers • By prior approval, In-Line Transfers may occur between current Shippers • Request must be submitted in writing to PXP for approval • A nominal fee will apply

  45. Nominations • Linefill barrels may be withdrawn: • 90 days after written notice to cease shipments, and • After payment is received in full for all services by PXP

  46. Prorations and Awarded Nominations • Prorations: • Based on SILO Concept: • Source points at Guernsey: • Belle Fourche Pipeline / PXP Joint Tariff • Hiland Double H Pipeline / PXP Joint Tariff • Local PXP Tariff from Guernsey Sources • Each SILO has defined capacity including 10% for Walk-up • Each SILO prorated independently and separately

  47. Prorations and Awarded Nominations – • Prorations: Examples • Belle Fourche 10% is 370,000 bbls/month • IF 37+ Shippers Nominate 10,000 bpm or more, then 37 Shippers will each be awarded 10,000 barrels of capacity through a random selection process. • IF 30 Shippers Nominate 10,000 bpm and 2 Shippers Nominate 60,000 bpm, then all 32 Shippers will be awarded 10,000 bpm (32 x 10,000 = 320,000) and each of the Shippers who Nominated 60,000 bpm will be awarded an additional 25,000 bpm. • Awarded Capacity then is: • 30 Shippers @ 10,000 bpm (300,000 bpm) • 2 Shippers @ 35,000 bpm ( 70,000 bpm)

  48. Prorations and Awarded Nominations • A New Shipper may graduate in a Silo to Regular Shipper status by Nominating and Shipping on PXP in each month of the Base Period in that Silo. • Base Period means the twelve (12) calendar month period: • Beginning thirteen (13) months prior to the current month, and • Excluding the Month preceding the current Month • Base Period Example: Shipper begins in Sept 2014 and ships for 12 consecutive months in one Silo. • In October 2015, a New Shipper would graduate to Regular Shipper after satisfying the Base Period definition. Ship 12 months (Sept thru Aug)

  49. Scheduling • All Nominations are due to PXP by the 20th calendar day. • PXP will promptly notify all shippers of any proration and awarded capacity. • PXP will develop and distribute a monthly pumping/delivery schedule to all shippers and connecting carriers

  50. Regulatory Filings • PXP expects FERC tariff filing to occur in August. • Current estimation is that the initial Uncommitted (local) Rate for transportation of crude oil from Guernsey to Cushing will be up to $4.25 per barrel. • The estimated rate is subject to change as we near completion of the system and will be filed with the FERC prior to our in-service date.

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