Citi MLP/ Midstream Conference August 19-20, 2015

Transcription

1 Citi MLP/ Midstream Conference 2015 August 19-20, 2015

2 Cautionary Statements This presentation contains forward-looking statements. These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts. In particular, statements, express or implied, concerning future actions, conditions or events, future operating results or the ability to generate revenues, income or cash flow or to make distributions or pay dividends are forward-looking statements. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future actions, conditions or events and future results of operations of Tallgrass Energy Partners, LP or Tallgrass Energy GP, LP and their respective affiliates may differ materially from those expressed in these forward-looking statements. Many of the factors that will determine these results are beyond Tallgrass Energy Partners, LP and Tallgrass Energy GP, LP s ability to control or predict. These statements are necessarily based upon various assumptions involving judgments with respect to the future, including, among others, the ability to pay and the amounts of distributions to Class A shareholders of Tallgrass Energy GP, LP or unitholders of Tallgrass Energy Partners, LP; Tallgrass Energy Partners, LP s ability to complete and integrate acquisitions, implement its business plan and complete internal growth projects; changes in general economic conditions; competitive conditions; actions taken by third-party operators, processors and transporters; demand for natural gas transportation, storage and processing services and crude oil transportation services; price and availability of debt and equity financing; availability and price of natural gas and crude oil compared to alternative fuels; energy efficiency and technology trends; operating hazards and other risks incidental to the business; natural disasters, weatherrelated delays and casualty losses; interest rates; labor relations; customer defaults; changes in tax status; effects of existing and future laws and governmental regulations; effects of future litigation; and other uncertainties. There is no assurance that any of the actions, events or results of the forward-looking statements will occur, or if any of them do, what impact they will have on our results of operations or financial condition. Because of these uncertainties, you are cautioned not to put undue reliance on any forward-looking statement. This presentation does not constitute an offer to sell any securities of Tallgrass Energy Partners, LP or Tallgrass Energy GP, LP or a solicitation of an offer to buy any securities of Tallgrass Energy Partners, LP or Tallgrass Energy GP, LP. 2

3 Non-GAAP Measures Adjusted EBITDA is defined as net income excluding the impact of interest, income taxes, depreciation and amortization, noncash income or loss related to derivative instruments, non-cash long-term compensation expense, impairment losses, gains or losses on asset or business disposals or acquisitions, gains or losses on the repurchase, redemption or early retirement of debt, and earnings from unconsolidated investments, but including the impact of distributions from unconsolidated investments. Adjusted EBITDA is a non-gaap supplemental financial measure that management and others, such as industry analysts, investors, lenders and rating agencies, may use to assess: Operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to historical cost basis or financing methods Ability to generate sufficient cash flow to make distributions to our unitholders Ability to incur and service debt and fund capital expenditures Viability of acquisitions and other capital expenditure projects and the returns on investment of various expansion and growth opportunities Management believes that the presentation of Adjusted EBITDA in this presentation provides useful information to investors in assessing Tallgrass Energy Partners, LP s financial condition and results of operations. Adjusted EBITDA should not be considered an alternative to net income, operating income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP, nor should Adjusted EBITDA be considered an alternative to available cash, distributions of available cash or other definitions in Tallgrass Energy Partners, LP s partnership agreement. Adjusted EBITDA has important limitations as an analytical tool because it excludes some but not all items that affect net income and net cash provided by operating activities. Additionally, because Adjusted EBITDA may be defined differently by other companies, the definition of Adjusted EBITDA may not be comparable to similarly titled measures of other companies, thereby diminishing its utility. 3

4 Summary Ownership Structure TEP Owners LP Ownership % Public 56% TDEV 10% Management, Kelso & EMG (1) Tallgrass Equity 33% Tallgrass Equity Ownership % Public (TEGP) 30% Management 17% Class B Shares Kelso & EMG 53% Tallgrass Development, LP Tallgrass Development or TDEV Tallgrass Energy GP, LP NYSE: TEGP Class A Shares Public TEGP Shareholders 50% (2) REX Tallgrass Equity Units Tallgrass Equity Units 100% Terminals LP Units Tallgrass Equity, LLC Tallgrass Equity 20mm LP Units GP interest and IDRs Tallgrass Energy Partners, LP NYSE: TEP LP Units Public TEP Unitholders 66.7% 33.3% Crude Oil Transportation and Logistics Segment Pony 100% Natural Gas Transportation and Logistics Segment TIGT Processing and Logistics Segment TMID 100% 100% Trailblazer BNN ~90% (1) Affiliates of Kelso & Company ( Kelso ) and the Energy & Minerals Group ( EMG ) and Tallgrass KC, LLC, an entity owned by management. Those persons hold an exchange right which allows them to exchange one Tallgrass Equity unit and one Class B share for one Class A share. An affiliate of Magnetar Capital also owns an approximate 10% limited partner interest in TDEV. (2) Of the remaining 50% ownership of REX, Phillips 66 and Sempra each own 25%. 4

5 Tallgrass Energy Overview Two operating partnerships with distinct functions make up the Tallgrass platform which currently allows Tallgrass to develop assets at TDEV while reducing capex requirements and execution risk at TEP TDEV ASSET INCUBATOR Tallgrass Development (Private) Private partnership Formed by management, Kelso, and EMG Acquired assets from Kinder Morgan in November 2012 Current holdings 50% interest in Rockies Express Pipeline ( REX ) 33.3% interest in Pony Express Pipeline ( Pony ) Tallgrass Terminals ( Terminals ) 6.4 million TEP LP units TEP Consolidated Footprint Tallgrass Energy Partners (NYSE:TEP) LONG-TERM OPERATING VEHICLE Public partnership Completed $313 million IPO in May 2013 Acquired ~$1.5 billion in dropdowns from TDEV, issued ~$900 million in common equity and raised DPU by ~102% since IPO Current holdings Tallgrass Interstate Gas Transmission ( TIGT ) Tallgrass Midstream ( TMID ) Trailblazer Pipeline ~90% interest in BNN Water Solutions ( BNN ) 66.7% interest in Pony Express Pipeline ( Pony ) Acquired IPO IPO Q2 14 Q2 14, Q2 15 Q3 14, Q1 15 Opal Kanda Wamsutter Casper Douglas Guernsey TALLGRASS DEVELOPMENT (TDEV, Private) Rockies Express Pipeline (50% ownership) Lease of Overthrust Pipeline Capacity (1) Pony Express Pipeline (33.3% ownership) Oil Storage Terminal Cheyenne Meeker BNN Water Solutions Sterling Terminal Beatrice Lebanon Clarington Ponca City Refinery Cushing Terminal (2) TALLGRASS ENERGY PARTNERS (NYSE:TEP) Tallgrass Interstate Gas Transmission Trailblazer Pipeline Pony Express Pipeline (66.7% ownership) Tallgrass Midstream BNN Water Solutions(~90% ownership) (1) Overthrust Pipeline is owned by Questar and consists of 255 miles of pipeline. (2) Tallgrass Terminals owns 20% of a joint venture, which owns and operates an oil terminal facility in Cushing, OK. 5

6 Two Attractive Investment Opportunities TEP Master Limited Partnership Owns operating assets Investors receive K-1 Distribution growth: 102% DPU growth since IPO 20% projected DPU growth CAGR through 2017 or beyond (1) Distribution coverage: 2013: ~1.22x 2014: ~1.15x 1H2015: ~1.22x 2015 guidance: 1.05x 1.10x Current yield: ~5.02% (2) Tallgrass Energy Partners Enterprise Value: $3.5B Market Cap: $2.8B (2) Debt: $0.7B (3) TEGP Tallgrass Energy GP Pure-Play General Partner TEP Incentive Distribution Rights and GP interest 20 mm TEP LP units No operating assets Up-C Structure Limited partnership taxed as a C-Corp Investors receive 1099 Tax expectations through 12/31/2017 at a minimum: o TEGP will pay no income taxes o Distributions paid to investors should not be treated as taxable dividend income o If Class B shares are exchanged for Class A shares TEGP will receive a step-up in tax basis Current yield: ~2.07% (4) NTM aggregate distribution of $0.624 per Class A share (5) An average quarterly distribution of $0.156 per share Amplified cash flow growth from: Increased TEP distribution per unit Increased TEP unit count 2-year distribution CAGR to Tallgrass Equity based on 20% TEP distribution growth and hypothetical unit counts at TEP: TEP Unit Count (mm) 2-yr CAGR 60 35% 80 48% % (1) Based on management s 2015 guidance. (2) Based on 7/31/2015 closing price and Q $0.58 distribution per unit annualized. (3) As of 6/30/2015. (4) Based on 7/31/2015 closing price and the TEGP S-1/A Forecast of $0.624 distribution per share for the 12 month period ending 6/30/2016 ( (5) Based on TEGP S-1/A Forecast of $0.624 distribution per share for the 12 month period ending 6/30/2016 ( 6

7 Tallgrass Execution

8 Recent Business Update Pony Express Q Operating and Financial Performance Cash Flow Distributed ~$60 million on an 8/8ths basis for Q2 Contracts Final joint upstream pipeline tariff activated in Q2 NE Colorado Lateral contracts activated in Q2 Filed to increase rates by FERC Annual Index Adjustment Volume Average volumes for Q2 were ~237k bbl/d Average volumes for June were ~260k bbl/d Peak throughput in excess of 330k bbl/d Currently shipping lower viscosity crude than the pipeline capacity specifications Expansion Update Drag reducing agent (DRA) skid installation near completion (15 skids) Potential expansion capacity of at least 100k bbl/d Expansion barrels began shipping in late Q2 Rockies Express Pipeline East-to-West Project In-service August 1st Provides 1.2 Bcf/d incremental Zone 3 east-to-west capacity Fully contracted with 20-year contracts Full east-to-west capacity of 1.8 Bcf/d in-service Capacity Enhancement Project 0.8 Bcf/d incremental capacity 0.7 Bcf/d contracted with 15-year contracts Expected in-service 2H2016 Tallgrass Terminals Sterling facility in-service in Q2 Planning truck unloading terminal at Buckingham (NE Colorado) Pursuing two additional projects within the existing Tallgrass footprint 8

9 Tallgrass s Execution of Stated Strategic Plan Tallgrass continues to demonstrate its ability to increase cash flow, reduce commodity exposure and grow its business Asset Stated Plan Tallgrass Strategy Accomplishments TMID Reduce commodity exposure Expand current facilities Largest keep whole and percent of proceeds contracts converted to fee based Douglas and Casper expansion projects completed, operational, and being utilized Constructing NGL pipeline supported by a 10-year Take or Pay contract TIGT Contract incremental volumes ~100 MMcf/d west end expansion Trailblazer File rate case Contract incremental volumes Serve as first drop down Rate case filed and settled 40 MMcf/d lateral into NE Colorado flowing gas Dropped into TEP in April 2014 at ~9x multiple Pony Express Pipeline ( Pony ) Rockies Express Pipeline ( REX ) Terminals Construct Pony crude oil pipeline Connect to incremental supply sources Drop Pony into TEP Convert REX into bidirectional header system Connect to supply Move toward more conservative financial structure Drop REX into TEP Utilize Pony as a base to expand into new operational areas Pony mainline began commercial service in October 2014 The Northeast Colorado Lateral ( NECL ) expansion project began commercial service in April 2015, diversifying crude supply into Pony 66.7% interest dropped into TEP to date An expansion project began commercial service in June 2015 Constructed Seneca Lateral and contracted 0.6 Bcf/d of supply through lateral 1.2 Bcf/d of 20-year Take or Pay contracts for east-to-west volume in Zone 3 Reduces risk around the 2019 contract maturities for west-to-east flows Capacity enhancement project increases capacity by an additional 0.8 Bcf/d, of which 0.7 Bcf/d is contracted with 15-year Take or Pay contracts REX repaid $450 million of debt maturities in April 2015 Visible growth as TDEV s 50% ownership of REX is expected to be dropped into TEP Acquired a 20% interest in Deeprock Development s Cushing Terminals Constructed Sterling Terminal facility in conjunction with NECL 9

10 Tallgrass Energy Accomplishments Initial TEP S-1 Filing TEP IPO TMID Keep Whole Contract Conversion TIGT West End Expansion TMID Douglas Expansion TMID Casper Expansion TMID POP Contract Conversion Revolver Upsize to $850mm Water Business Acquisition Trailblazer Acquisition ~$330mm TEP follow-on Equity Offering 33.3% Pony Acquisition Commence At-the-Market Equity Program Pony Expansion Open Season TEGP IPO ~$570mm TEP follow-on Equity Offering 33.3% Pony Acquisition 2012 Q4 Q1 Q Q3 Q4 Q1 Q2 Q3 Q REX Refinances Notes Acquisition of Assets File REX PDO For Zone 3 East-to-West Transportation Contract REX s Seneca Lateral Contract Trailblazer s Redtail Lateral Pony Northeast Colorado Lateral Open Season REX Receives Favorable PDO Ruling REX Seneca Lateral Expansion Open Season REX E2W Open Season Settle Trailblazer Rate Case REX Signs E2W PAs REX Expansion Open Season REX Settles with 3 MFN Shippers Prairie State Pipeline Open Season with AGL Resources REX Signs Expansion PAs REX Repays $450mm 2015 Notes Seneca Lateral Achieves Full Capacity REX Zone 3 E2W Project placed into service 7(c) FERC application filed for REX Expansion DEVELOPMENT Financing Project Acquisition Other 10

11 TEP Highlights

12 TEP is a High-Growth Traditional Midstream MLP Crude Oil Transportation and Logistics 764-mile FERC regulated crude oil pipeline from Guernsey, WY / NE Colorado to Cushing, OK ~320,000 bbl/d of base design capacity (1) Firm commitments totaling >300,000 bbl/d Low-cost, competitive base load positioning relative to alternatives (e.g., rail) Access to Bakken Shale, DJ Basin, and Powder River Basin production Processing and treating Processing and Logistics ~190 mmcf/d of processing capacity in the Powder River and Wind River basins in Wyoming ~50 mmcf/d of treating capacity in the Wind River basin that feeds into the Casper processing facility 3,500 bbl/d fractionator at Casper plant Water business services Fresh water transportation pipeline in the DJ Basin Effluent management operations in the Eagle Ford Shale and Permian Basin Natural Gas Transportation and Logistics Consists of 2 FERC-regulated natural gas transportation & storage systems (TIGT and Trailblazer) ~5,107 miles of pipeline ~1,982 mmcf/d of transportation design capacity Tallgrass Energy Footprint Tallgrass Interstate Gas Transmission Trailblazer Pipeline Pony Express Pipeline Pony Express Joint Tariff Pipelines Tallgrass Midstream BNN Water Solutions Pipeline Rockies Express Pipeline Lease of Overthrust Pipeline Capacity Oil Storage Terminal ~77% of transportation capacity and ~70% of storage capacity under firm contract (2) 15.1 Bcf working gas storage capacity 210 mmcf/d of peak storage withdrawal capability Access to multiple high-growth basins in the Rockies (1) Excludes expansion capacity and ability to increase based on drag reducing agent injection. (2) As of 6/30/15. 12

13 Stable Cash Flow Profile Only 2% of TEP s next twelve months forecasted EBITDA is directly exposed to commodity prices and will be further strengthened with acquisitions of the last third of Pony and 50% of REX (1) Contract Structure Weighted Average Remaining Life Crude Oil Transportation & Logistics Segment Natural Gas Transportation & Logistics Segment Take or Pay contracts for Majority of transportation cash flow is Take >300,000 bbl/d or Pay ~5 years (2) Transportation: ~3 years (2) Storage: ~6 years (2) 19-year average tenure for top 15 customers (2) Processing & Logistics Segment ~90% of TEP s reserved processing capacity subject to fee-based processing contracts (2) Majority of forecasted BNN cash flow is Take or Pay based NGL takeaway pipeline supported by a 10-year Take or Pay contract for 100% of its capacity (3) ~3 years (4) Growth Opportunities Attractive and visible dropdown potential of remaining 33% interest in Pony Pony capacity expansion Dropdown potential of 50% of REX with ~17- year WARL on newly contracted Zone 3 Take or Pay contracts for 2.5 Bcf/d Additional Redtail Lateral capacity Additional processing capacity available in Powder River Basin (received permit) NTM Adjusted EBITDA by Contract Type (1) Volumetric Fee 13% Commodity Exposed 2% Take or Pay 85% Source: Company filings. (1) Based on TEP s estimated minimum Adj. EBITDA for the 12 months ended 6/30/16 per the TEGP S-1 and excluding a third Pony drop ( (2) As of 6/30/2015. Based on capacity. (3) Expected in-service of Q (4) Processing contracts as of 6/30/15. Based on capacity. 13

14 High Quality Customer Base ~60% of TEP revenue is derived from investment grade customers or investment grade corporate families Description Investment Grade Revenue (1) Established relationships across diverse, high-quality customer base Diverse customer mix including large LDCs, major independent producers, marketers and end-users including power plants Over 150 total customers across all systems Majority of revenues based on long-term Take or Pay contracts Rigorous credit policies in place to manage credit exposure to Non-Investment Grade and Not Rated customers Non-Investment Grade 11% Not Rated 28% Investment Grade 61% (1) Revenue derived from investment grade counterparties or parent companies with investment grade ratings as of 6/30/

15 Visible Cash Flow Growth Dropdowns Since IPO, TEP has completed 3 dropdowns with an aggregate purchase price of ~$1.5B Trailblazer, Pony 1 (33%) and Pony 2 (33%) ~9x EBITDA multiple TDEV / TEP relationship: Continued source of dropdown inventory TDEV has been used as an asset incubator Dropdown timing primarily driven by assets achieving a steady cash flow profile Organic Projects ~$2B+ of capital projects completed or in process (1) Emphasize return on capital deployed over amount of capital deployed Leverage market position and competitive strengths Secured by long-term, Take or Pay commitments Reinforces stability and supports distribution growth Two operating vehicles broaden profile of projects TEP scale and capital access TDEV may incubate some longer lead / higher risk projects, replenishing dropdown inventory M&A Outlook Commodity dislocation creating opportunities Consolidate positions / gain access to new basins E&P s divesting midstream assets Cash flow stability is key investor focus Flight-to-quality and value differentiation driven by critical infrastructure and Take or Pay contracts Flexible Capital Structure Currently below targeted leverage ratio of 3.0x 4.0x Provides stable platform and ample liquidity for dropdowns, organic growth, and M&A Total coverage of ~1.18x since IPO Reduces volatility risk of future distribution growth (1) Since Includes projects at both TEP and TDEV. 15

16 Attractive Business Model Stable Operations Crude Oil Transportation & Logistics Segment Firm commitments totaling >300,000 bbl/d ~5-year WARL (1) Pony provides baseload Rockies takeaway Diversified Supply Bakken Shale, DJ and Powder River Basins Diversified Market Cushing, OK and direct refinery connections Natural Gas Transportation & Logistics Segment Majority of transportation revenue is Take or Pay 3-year WARL on transportation contracts (1) 6-year WARL on storage contracts (1) 87% of TIGT transportation revenue On-System (1) Attractive future dropdown potential at REX 17-year WARL on newly contracted 2.5 Bcf/d for REX Zone 3 transportation (1) Strong Financial Profile Financial flexibility facilitates effective capital deployment Historical Leverage and Coverage $850mm revolver provides TEP substantial liquidity Successful track record of accessing the capital markets Two equity follow-ons totaling ~$900mm Significantly increased public float since TEP IPO Opportunistic ATM equity program Dual public equity currencies and Up-C structure provide increased flexibility 4.0x 3.0x 2.0x Leverage (2) 3.3x 1.7x 2.7x 1.25x 1.20x 1.15x 1.10x Coverage 1.22x 1.15x 1.22x ($ in millions) Total Debt as of 6/30/15 $ x 1.05x 2015 Midpoint Guidance Adjusted EBITDA 215 Debt / Adjusted EBITDA 3.3x 0.0x Q x H2015 (1) As of 6/30/15. WARL s based on capacity. (2) Based on TEP covenant calculations. 16

17 Solid Financial Performance Guidance Outperformance TEP has consistently met or exceeded guidance Annualized LP Distribution At IPO S-1 (1) FY2013 FY2014 Adjusted EBITDA Maintenance Capex Coverage DPU Exceeded Guidance Met Guidance Total Unit Holder Return Since IPO (2)(3) (1) Represents 12 month period ending 6/30/2014. (2) As of 7/31/2015. (3) Distributions are assumed to be reinvested in units of TEP at the closing price on the ex-dividend date. 17

18 Appendix

19 TEP Segment Overview

20 Summary of Segments Sizable asset footprint which services some of the largest, most economic domestic basins 1 Crude Oil Transportation & Logistics Segment 2 Natural Gas Transportation & Logistics Segment 764-mile FERC regulated crude oil pipeline from Guernsey, WY / NE Colorado to Cushing, OK ~320,000 bbl/d of base design capacity (1) Firm commitments totaling >300,000 bbl/d Low-cost, competitive base load positioning relative to alternatives (e.g., rail) Access to Bakken Shale, DJ Basin, and Powder River Basin production Consists of 2 FERC-regulated natural gas transportation & storage systems (TIGT and Trailblazer) ~5,107 miles of pipeline ~1,982 MMcf/d of transportation design capacity ~77% of transportation capacity and ~70% of storage capacity under firm contract (2) 15.1 Bcf working gas storage capacity 210 MMcf/d of peak storage withdrawal capability Access to multiple high-growth basins in the Rockies 3 Processing & Logistics Segment 4 REX Pipeline (3) Processing and treating ~190 MMcf/d of processing capacity in the Powder River and Wind River Basins in Wyoming 3,500 bbl/d fractionator at Casper plant Water business services Fresh water transportation pipeline in the DJ Basin Effluent management operations in the Eagle Ford Shale and Permian Basin Water recycling services 1,712-mile FERC regulated bidirectional natural gas pipeline with ~1.8 Bcf/d of base long haul capacity that transports Rocky Mountain and Appalachian Basin natural gas Well-positioned to benefit from changing natural gas flows (Marcellus / Utica) Zone 3 capacity enhancement project to increase total east-to-west capacity up to 2.6 Bcf/d Moving Marcellus / Utica gas from Clarington, OH to the Midwest markets Access to numerous end markets across the US (1) Excludes expansion capacity and ability to increase based on drag reducing agent injection. (2) As of 6/30/2015. (3) 50% interest in REX is currently owned by TDEV. 20

21 Crude Oil Transportation & Logistics Overview Asset Overview 764-mile FERC regulated crude oil pipeline from Guernsey, WY / NE Colorado to Cushing, OK Base capacity of ~320,000 bbl/d (1) Attractive cash flow profile 5-year Take or Pay contracts for a total of >300,000 bbl/d Capacity available for non-contracted shippers Low-cost, competitive base load positioning relative to alternatives (e.g., rail) Minimal near-term anticipated maintenance requirements support cash flow profile Scalable in-place infrastructure supports additional expansion opportunities Diverse supply and demand markets Direct connection to the Bakken Shale via two upstream joint tariff partners, Belle Fourche Pipeline and Hiland Access to Bakken Shale, DJ Basin, and Powder River Basin production where takeaway capacity is limited and Pony provides a competitive alternative Demand access to both the Cushing, OK oil hub and direct refinery connections Powder River Basin Guernsey WY Pawnee Buckingham Niobrara CO Sterling Terminal Pony Pipeline Pony Crude Receipt Current Footprint Mississippi Lime Pony Pump Station Oil Storage Terminal Refinery Ponca City Cushing Terminal Additional Growth Opportunities Basins Active Shale Drilling An additional ~100,000 bbl/d of capacity can be added with minimal capital expenditure through the injection of drag reducing agent Assessing the construction of additional laterals to gain access to a broader supply market or directly connect to additional refineries NE KS OK (1) Excludes expansion capacity and ability to increase based on drag reducing agent injection. 21

22 Natural Gas Transportation & Logistics Overview Asset Overview Consists of two FERC-regulated natural gas transportation & storage systems (TIGT and Trailblazer) ~5,107 miles of pipelines ~1,982 MMcf/d of transportation design capacity ~77% of transportation capacity and ~70% of storage capacity under firm contract (1) 15.1 Bcf working gas storage capacity 210 MMcf/d of peak storage withdrawal capability Long Term Customer Base The top 15 customers weighted average tenure of ~19 years account for ~70% of segment revenue (1) 1 5 Years 6 10 Years Years Years > 20 Years Access to multiple high-growth basins in the Rockies Current Footprint Organic Projects Greater Green River Basin Big Horn Basin WY Powder River Basin Niobrara HUNTSMAN NE TIGT Pipeline Trailblazer Pipeline TIGT Gas Storage TIGT Compressor Station Trailblazer Compressor Station Basins Active Shale Drilling Additional Redtail Lateral capacity Other laterals to meet the needs of supply and demand Uinta/ Piceance Basin Niobrara Forest City Basin Paradox Basin CO KS Mississippi Lime Cherokee Platform (1) As of 6/30/

23 Processing & Logistics Overview Asset Overview Processing Footprint Processing and treating ~190 MMcf/d of processing capacity in the Powder River (PRB) and Wind River Basins in Wyoming 3,500 bbl/d fractionator at Casper plant Water business services A fresh water transportation pipeline in Weld County, Colorado (DJ Basin) Effluent management operations in the Eagle Ford Shale and Permian Basin NGL Pipeline Under construction, expected in-service Q Provides NGL takeaway from a processing plant in Weld County, Colorado to an interconnect with Overland Pass Pipeline Supported by a 10-year, Take or Pay contract for 100% of the pipeline capacity Big Horn Basin Greater Green River Basin Uinta/ Piceance Basin Powder River Basin Niobrara Niobrara WY TIGT Pipeline Basins Active Shale Drilling CO NE West Frenchie Draw Douglas Casper Processing and Logistics Growth Opportunities Processing and Treating Contract Mix (1) Processing and treating Have received a permit for additional processing capacity in the PRB Discussing the construction of gathering lines to service multiple customers in the PRB Water business services Additional water management services to meet the full spectrum of producers needs (fresh water, recycling, waste water disposal) POP / KW 10% Fee-Based 90% (1) As of 6/30/2015. Based on contracted capacity. 23

24 TEP and TEGP Growth Opportunities

25 Dropdown Opportunity: Rockies Express Pipeline Prominent pipeline providing natural gas transportation service to North American energy markets REX is becoming the nation s northernmost natural gas header system Attractive access to both supply basins and large end markets Currently moving both Rocky Mountain and Appalachian production Shale to Shining Shale Zone 1 Zone 2 Zone 3 Opal Wamsutter Kanda Meeker Cheyenne Clarington ROCKIES EXPRESS PIPELINE SENECA LATERAL LEASE OF OVERTHRUST CAPACITY REX COMPRESSOR STATION Lebanon Asset Overview Update Placed in service in November ,712 miles of 42 and 36 pipeline ~1.8 Bcf/d of base long haul capacity Contracted capacity supports stable cash flow and leverage metrics Access to substantially all major natural gas supply basins in the Rocky Mountains region, Ohio and Pennsylvania corridors Favorable proximity to numerous major end-use markets REX has contracted Zone 3 for bidirectional flows 2.5 Bcf/d contracted of 2.6 Bcf/d Zone 3 east-to-west capacity First east-to-west volumes flowed in June 2014 Majority of contracts are year terms Mitigated >50% of the recontracting risk as it relates to FY2013 cash flows REX repaid $450mm of bond maturities via partner capital contribution in April 2015 Settled with 3 of 4 long term MFN shippers to minimize risk around eastto-west flows in Zone 3 Note: Overthrust Pipeline is owned by Questar and consists of 255 miles of pipeline. 25

26 Dropdown Opportunity: Tallgrass Terminals (1) Tallgrass Energy is utilizing the Pony system as an entry point into the terminals business WY Powder River Basin Pawnee Buckingham Guernsey Sterling Terminal NE Located at the intersection of the Guernsey to Sterling and NECL line segments of Pony Provides over 1 MMbbl of operational storage for Pony Pursuing growth opportunities to expand business into nearby areas and operations Niobrara CO KS Mississippi Lime OK Ponca City Tallgrass Development acquired a 20% interest in the Deeprock Development Cushing Terminal (2) Storage capacity of over 2.3 MMbbl Offers pump over services to numerous terminals and pipeline takeaway options Provides Tallgrass Energy a presence in the nation s largest oil hub to source new projects Cushing Terminal Pony Pipeline Pony Crude Receipt Pony Pump Station Oil Storage Terminal Refinery Basins Active Shale Drilling Other Commercializing terminal(s) in and around NECL receipt sites Kansas terminal opportunities (1) Tallgrass Terminals is not a Tallgrass Development Retained Asset under the Omnibus Agreement between TEP and TDEV and is not a part of Pony. (2) Tallgrass Terminals owns 20% of a joint venture, which owns and operates an oil terminal facility in Cushing, OK. 26