Pony Express Pipeline Uncommitted Shipper Meeting July 17

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

Introduction Steven Kelley – Scheduler, Oil Logistics CONFIDENTIAL 2

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

PXP Construction Status Doug Johnson – General Manager CONFIDENTIAL 4

System Map CONFIDENTIAL 5

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 • Deeprock Terminal – Cushing, OK • Ponca City Lateral • Northeast Colorado Lateral (NECL) § Pipeline § Sterling Tank Farm CONFIDENTIAL 6

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

NECL Northeast Colorado Lateral – Sterling Pawnee Lateral Buckingham Lateral - 13 miles of 16” 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. CONFIDENTIAL 8

Line Fill Process CONFIDENTIAL 9

System Map 10

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 11

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

Somewhere in Wyoming CONFIDENTIAL 13

PXP Guernsey Station CONFIDENTIAL 14

Deeprock-Cushing to PXP Delivery Points CONFIDENTIAL 15

Shipper Meeting – July 17 – Lakewood, CO www. Tallgrass. Energy. LP. com CONFIDENTIAL 16

www. Tallgrass. Energy. LP. com CONFIDENTIAL 17

System Map CONFIDENTIAL 18

System Map CONFIDENTIAL 19

Pony Express Pipeline (PXP)- System Information CONFIDENTIAL 20

Pony Express Pipeline – Nomination Information CONFIDENTIAL 21

PXP – Common Stream Descriptions CONFIDENTIAL 22

PXP – Information for Walk-Up Shippers CONFIDENTIAL 23

PXP – Information for Walk-Up Shippers CONFIDENTIAL 24

PXP – Information for Walk-Up Shippers CONFIDENTIAL 25

PXP – Information for Walk-Up Shippers CONFIDENTIAL 26

PXP – Information for Walk-Up Shippers CONFIDENTIAL 27

PXP – Rules and Regulations CONFIDENTIAL 28

PXP – Tariff Rates CONFIDENTIAL 29

PXP - Forms CONFIDENTIAL 30

PXP – Credit Application Form CONFIDENTIAL 31

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

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. 33

Nominations --- Break Time --- CONFIDENTIAL 34

Guernsey Tank Farms CONFIDENTIAL 35

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. CONFIDENTIAL 36

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

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

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

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

Nominations (continued) Ø Nominations for shipments on The Belle Fourche – PXP Joint Tariff must be made to and confirmed by both BFPL and PXP. Ø Nominations for shipments on The Hiland - PXP Joint Tariff must be made to and confirmed by both Hiland PXP. Ø 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. 41

PXP – Nomination Form CONFIDENTIAL 42

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

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

Nominations Ø 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 45

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

Prorations and Awarded Nominations – Prorations: Examples Ø 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. ü Awarded Capacity then is: o 30 Shippers @ 10, 000 bpm (300, 000 bpm) o 2 Shippers @ 35, 000 bpm ( 70, 000 bpm) CONFIDENTIAL 47

Prorations and Awarded Nominations ØA 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. ØBase 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 Ø 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) CONFIDENTIAL 48

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

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. 50

Mona Walker – Manager, Operational Accounting 51

PXP Commercial Transaction Management System Energy Solutions International (ESI) Pony Express Pipeline will be utilizing Synthesis and Pipeline Scheduler for commercial transaction processing. Synthesis is one of the industry best-of-class software systems in the midstream oil and gas industry. Benefits of the PXP operating system to shippers include: § Scheduler: Efficiently and accurately schedule the pipeline system – Make changes, recalculate, and immediately see results and communicate to shippers – Ability to see system future states, with current conditions – Interface seamlessly with transactional accounting system for accurate and efficient monthly close processes CONFIDENTIAL 52

PXP Commercial Transaction Management System Energy Solutions International (ESI) (continued) § Option to accept nominations from and pass information to shippers via Internet § Import measurement data for transactional calculations § Inventory, and book-to-physical calculations § Tie nominations, tickets, contracts, tariffs together for full financial calculations and accurate shipper statements § Generate and send shipper invoices § Ad hoc reporting and analysis which will allow us to timely responses to shipper requests CONFIDENTIAL 53

Accounting Procedures PXP will apply: A Common Stream, Available Oil Model • Applies to all shipments Ø Joint Tariff Ø PXP Local Tariff CONFIDENTIAL 54

Accounting Procedures Credit: Ø New Shippers are required to submit a request for shipper status. Ø Each Shipper is subject to continual review of its financial position. Ø PXP reserves the right to limit credit to any Shipper when financially prudent. CONFIDENTIAL 55

Accounting Procedures Billing: Ø Shippers will be billed on the 15 th calendar day of the invoice month for all barrels delivered. Ø Receipt and delivery tickets are the controlling documents upon which such billing is based. Ø Shippers will receive one invoice that identifies all charges on Joint Tariff and PXP systems. CONFIDENTIAL 56

Accounting Procedures Billing: The billing documents included in the invoice package will include: § Shipper statement § PXP Inventory statement § Pipeline and terminal loss allowance assessment § Delivered barrel transportation tariff charges § Any other applicable fees which may include demurrage and pumping fees Payment is due on the 20 th calendar day of the invoice month CONFIDENTIAL 57

Shipper Questions and Discussion CONFIDENTIAL 58

Pony Express Pipeline - Contacts CONFIDENTIAL 59

Pony Express Pipeline Uncommitted Shipper Meeting July 17, 2014 Confidential Presentation