99 Years of Continuous Quality Service Wyoming Pipeline

99 Years of Continuous Quality Service Wyoming Pipeline Authority Meeting August 26 th 2003 Michael Walsh President &Chief Operating Officer Jerry Morris VP Bus. Dev. & Strategic Planning Donny King Project Manager Bus. Dev.

Michael Walsh President and Chief Operating Officer

Organizational Overview Southern Star is wholly owned by AIG Highstar Southern Star Western Frontier Pipeline Company, LLC Central Pipeline 2

AIG Highstar Fund Summary • AIG Highstar Portfolio (March 2003) –Eight investments: average size $42 MM; 84% energy, 16% transportation –Energy: natural gas storage, interstate natural gas pipeline, power generation, waste-to-energy –Transportation: logistics, asset management, and construction materials 4

AIG Highstar Capital, L. P. (“AIG Highstar”) Fund Summary • Private equity fund formed to make structured equity investments in infrastructure projects and operating companies • $406 million in capital commitments (approx. $330 million committed as of March 2003) • Limited partners include multi-national corporations, financial services companies, and industry-focused funds 3

AIG Highstar Fund Summary • Sponsored by AIG and managed by AIG Global Investment Corp. (AIGGIC) –AIG is one of the world’s leading U. S. -based international insurance and financial services organization –AIG Global Investment Group, AIGGIC’s parent, has $329 billion in assets, including over $53 billion of external client assets, under management. * * Source: AIG Global Investment Corp. and its affiliates. AIGGIG is a holding company whose subsidiaries and investment affiliates provide asset management services (the "AIGGIG Companies"). The assets under management for AIGGIG refers to assets advised or sub-advised by AIGGIG Companies. Assets sub-advised to third party managers are not included in this report, but will be available upon request. 5

Jerry Morris VP Bus. Dev. & Strategic Planning

Organizational Overview Southern Star is wholly owned by AIG Highstar Southern Star Western Frontier Pipeline Company, LLC Central Pipeline 2

Operational Overview u Southern Star Central Pipeline is a FERC-regulated interstate natural gas pipeline company providing transportation and storage services in seven states in the central U. S. , including major metropolitan areas in Kansas and Missouri u Transportation capacity of approximately 2. 3 Bcf/day u On-system working gas storage capacity of 43 Bcf u Assets: Southern Star Central Pipeline Map – 6, 076 miles of mainline, branch, and storage pipelines – 41 compressor stations 223, 916 HP – 8 on-system storage fields – 31 Pipeline Interconnects u Headquartered in Owensboro, Kentucky – 457 total employee complement u 15 Operating Districts – 330 field employees 7

Organizational Overview Southern Star is wholly owned by AIG Highstar Southern Star Western Frontier Pipeline Company, LLC Central Pipeline 2

S O U T H E R N S T A R C E N T R A L G A S P I P E L I N E Western Frontier History • • • Filed with FERC October 2001 Design 540, 000 Dth/day Cheyenne Hub to Mid-Continent 400 Mile 30” Pipeline Financial Distress of Previous Parent Forced Project to be Shelved FERC Filing Withdrawn in June 2002 AIG Highstar Acquired Southern Star Central & Western Frontier in November 2002 Financial Capabilities now Stronger than Ever Open Season Announced August 18 th 2003

S O U T H E R N S T A R C E N T R A L G A S P I P E L I N E 99 Years of Continuous Quality Service u Reasons For Suspending the Project – Recession – Cautious Capital Markets – Enron debacle – Williams Communications demise – Williams overall financial woes u Current Status – Western Frontier is Back – Financially Capable of Implementing Project with Market Support

S O U T H E R N S T A R C E N T R A L G A S P I P E L I N E 99 Years of Continuous Quality Service Challenges u Drilling Timing - Environmental Constraints u Issuance of Drilling Permits – originally a 75 day process currently taking 175 days u Producers Subscribing to Capacity in today’s market for 10 year terms u State Commissions u Lack of Risk Management Services u FERC Certification Process

S O U T H E R N S T A R C E N T R A L G A S P I P E L I N E 99 Years of Continuous Quality Service Opportunities u u u u Wyoming Pipeline Authority (WPA) – Production Aggregator – Risk Management State of Wyoming – 700 -750 MMcfd Royalty Gas Potential • State Lands (2 Section in Every Range) • 50% of all Federal Royalty • Severance Tax In-Kind (Legislative Action Required) • Ad. Valorem Tax In-Kind (State Constitutional Amendment Required) Competitive Pipeline Alternative in the Rockies Gas Price Volatility Nation Wide Declining Supply Deliverability in the Mid-continent & Canada Tremendous Production Growth Potential in the Rockies Substantial Work Already Completed on Western Frontier

S O U T H E R N S T A R C E N T R A L G A S P I P E L I N E 99 Years of Continuous Quality Service Don’t Let This be the Quote of the Future! Energy Information Administration Natural Gas Monthly October 2000 Quote for Rocky Mountain Region “Expanding coal-bed methane production has outpaced the development of long-haul capacity to carry the gas to end-use markets. Capacity constraint problems exiting the production areas have resulted in the region having the lowest average natural gas spot prices in the nation. ”

Donny King Project Manager Business Development

S O U T H E R N S T A R C E N T R A L G A S P I P E L I N E 99 Years of Continuous Quality Service Rockies Production Growth u “Production in Wyoming totals about 4. 2 Bcfd now and if environmental and regulatory delays can be cleared, could grow to in excess of 6 Bcfd over the next 5 years” u Wyoming state budget is “heavily dependent upon revenues received from mineral production produced from state & federal lands. During the past 5 years, natural gas production has grown almost 50% in the state, with limited additions to the infrastructure to export growing production” Source: WPA GD 7/9/03

S O U T H E R N S T A R C E N T R A L G A S P I P E L I N E 99 Years of Continuous Quality Service Major Natural Gas Producing Basins and Pipeline Transportation Corridors to Market Areas Source: Energy Information Administration, Gas. Tran Gas Transportation Information System

10 % annual decline

5 % annual decline

S O U T H E R N S T A R C E N T R A L G A S P I P E L I N E 99 Years of Continuous Quality Service Mid-Continent Production • Richard Sharples, President of Anadarko Energy Services on the status of Mid-continent supplies: “The Mid-continent is so mature that it doesn’t matter how much you drill, you won’t increase production” From Gas Daily Friday, February 16, 2001

S O U T H E R N S T A R C E N T R A L G A S P I P E L I N E 99 Years of Continuous Quality Service

• • • Insert map 540 -1, 000 MDth/day Cheyenne Hub to Mid. Continent 400 Mile P/L Targeted In-Service date 2006 -2007 Mid-continent Hub 6. 8 Bcfd of interstate takeaway capacity

S O U T H E R N S T A R C E N T R A L G A S P I P E L I N E • • 540, 000 - 1, 000 Dth/day Cheyenne Hub to Mid. Continent 400 Miles 30”-36” P/L 30, 000 -60, 000 HP 100% LF Rate Range to pipeline hub is $0. 25 -0. 35 Anticipated Fuel at 1% or Less Targeted In-Service 20062007 Timeframe Mid-continent Hub 6. 8 Bcfd of interstate takeaway capacity

S O U T H E R N S T A R u. Project C E N T R A L G A S P I P E L I N E 99 Years of Continuous Quality Service Activities Completed – Pipeline Route Established – Aerial Photography – Detailed Land Survey – Biological and Archeological Study – Over 26% of Right-of-Way Acquired – Station Site Acquired u. Project Activities Underway – Project Engineering Review and Estimate Refinement – Non-binding Open Season August 18 th- October 10 th – Western Frontier Website Available – www. sscgp. com/westernfrontier

• 540, 000 Dth/day • Echo Springs/Wamsutter to Cheyenne Hub • 186 Miles 30” P/L • 41, 000 HP • Greater Green River Takeaway Capacity • Targeted In-Service Date of 2006 -2007

S O U T H E R N S T A R C E N T R A L G A S P I P E L I N E 99 Years of Continuous Quality Service Conclusions u Gas Market will Remain Tight in Near Term u Leaves Market Vulnerable to Price Volatility u If Environmental & Regulatory delays can be cleared Wyoming Production could Grow from the current 4. 2 Bcfd to in excess of 6 Bcfd over the next 5 years u New Infrastructure will be required to get this gas to Market u New Infrastructure should help stabilize cash flow for funding producer drilling investments and the State of Wyoming budgeting activities. u Western Frontier Project Situated to meet Market Needs Quickly & Efficiently with Market Support

S O U T H E R N S T A R u C E N T R A L G A S P I P E L I N E 99 Years of Continuous Quality Service Why Western Frontier? – Mid-Continent Supply Basins Declining • Anadarko 5% Annually • Hugoton 7 -10% Annually • Supply Diversification Necessary – Rockies Supply Prolific needs Additional Market Access – Basin Diversification • Cheyenne Hub • Denver Julesburg (DJ) Basin – Average Differential Between Rockies-Cheyenne Hub and Mid-Continent Inception to Present= $0. 80 – Dynamic Operating Hub - Additional Infrastructure Needed out of Cheyenne Hub – Diverse Market Access Providing Liquidity – Market Growth • Oklahoma Intrastate Market • Southwest Missouri

S O U T H E R N S T A R C E N T R A L G A S P I P E L I N E 99 Years of Continuous Quality Service Contact Information Jerry Morris – (270) 852 -4660 Jerry. L. Morris@SSCGP. com Donny King – (270) 852 -4663 Donny. W. King@SSCGP. com Dale Sanders – (270) 852 -4666 Dale. T. Sanders@SSCGP. com