Welcome to the

Permian Highway

Pipeline Project

Open House

Permian Highway Pipeline Project

About Kinder Morgan Kinder Morgan is one of the largest energy infrastructure companies in North America.

We own an interest in or operate approximately 84,000 miles of pipelines and 157 terminals.

Our pipelines transport natural gas, gasoline, crude oil, carbon dioxide (CO2) and more.

Our terminals store and handle petroleum products, chemicals and other products.

Kinder Morgan in Texas

Economic Impact:

Kinder Morgan employs over 4,970 people in Texas.

Kinder Morgan paid approximately $122 million to state and local taxing bodies in 2017.

Kinder Morgan Assets in Texas:

Kinder Morgan operates more assets in Texas than any other state in the U.S. and has its corporate headquarters in Houston, Texas.

Kinder Morgan operates approximately 26,000 miles of natural gas, CO2, crude and refined products pipelines and 15 terminals handling both liquid and bulk goods.

Permian Highway Pipeline Project

Project Overview

The Permian Highway Pipeline (PHP) Project is designed to transport up to 2.1 billion cubic feet per day (Bcf/d) of natural gas through approximately 430 miles of 42-inch pipeline from the Waha, Texas, area to the U.S. Gulf Coast and Mexico markets. Kinder Morgan Texas Pipeline (KMTP) will build and operate the pipeline.

Location: The Project will cross 16 counties within the state of Texas (from west to east): Reeves, Pecos, Crane, Upton, Reagan, Crockett, Schleicher, Menard, Kimble, Gillespie, Blanco, Hays, Caldwell, Gonzales, Lavaca and Colorado.

Cost: The estimated project construction cost is approximately $2 billion.

Customers: Long-term firm transportation agreements with shippers have already been completed for the Project’s original capacity of 2.0 Bcf/d. The approximately 0.1 Bcf/d of expansion capacity is currently being marketed. Shippers that have committed to the project include EagleClaw, Apache Corporation (Apache) and XTO Energy Inc., a subsidiary of Exxon Mobil Corporation, amongst others.

Project Ownership: Kinder Morgan Texas Pipeline (KMTP) and EagleClaw Midstream Ventures’ (EagleClaw) ownership interest in the project is 40 percent each. In January 2019, an affiliate of an anchor shipper exercised its option in January 2019 to acquire a 20 percent equity interest in the project. Altus Midstream (a gas gathering, processing and transportation company formed by shipper Apache Corporation) has an option to acquire an equity interest in the project from the initial partners by September 2019. If Altus exercises its option, KMI, EagleClaw and Altus will each hold a 26.67 percent ownership interest in the project.

Permian Highway Pipeline Project

Project Schedule

Stakeholder Outreach Ongoing

Civil & Environmental Surveys Sept. 2018 - June 2019

Targeted Construction Start Date Fall 2019

Proposed In-Service Date Fourth Quarter 2020

Project Regulatory Oversight A number of federal and state agencies will be involved with the approval and oversight of the PHP Project, including, but not limited to, the Railroad Commission of Texas, U.S. Fish and Wildlife Service, U.S. Army Corps of Engineers, Texas Historical Commission, Texas Commission on Environmental Quality, Texas General Land Office and Native American tribes as applicable.

Project Economic Benefits

The PHP Project will directly generate an estimated 2,500 local construction jobs and 18 full-time positions following the project’s completion.

When complete, the new facilities constructed as part of the Project will generate approximately $42 million in increased annual tax revenue to applicable state and local taxing bodies.

Estimated increases in annual tax revenues for local counties: Blanco County: approximately $890,000 Hays County: approximately $1.6 million Gillespie County: approximately $650,000 Caldwell County: approximately $760,000 Kimble County: approximately $3.1 million

Project Environmental Benefits The Project will provide a much-needed outlet for natural gas in the Permian Basin of West Texas. Natural gas is produced as a by-product of crude oil at many Permian wells.

Currently, an estimated 400 million cubic feet per day (Mcf/d) of natural gas is flared in the Permian Basin due to a lack of natural gas pipelines out of the region. Flaring is expected to increase in the area unless new pipelines are constructed.

The PHP Project will provide 2.1 billion cubic feet per day (Bcf/d) of natural gas takeaway capacity to the Permian, thereby reducing flaring and associated CO2

and methane emissions into the atmosphere.

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Permian Highway Pipeline Project

Horizontal Directional Drilling

Kinder Morgan will utilize Horizontal Directional Drilling (HDD) to install pipelines under major rivers and waterbodies. The use of the HDD construction method will allow the pipeline to be installed at a greater depth below the bottom of the waterbody with minimal local impacts from the installation process.

Installation Process: 1) Pilot hole: The first step in the proposed HDD is to drill separate, small diameter pilot holes using drill rigs staged on each side of the crossing. As each pilot hole progresses, segments of drill pipe are inserted into the hole to extend the length of the drill. The drill bits are steered and monitored throughout the process using a gyroscopic drill bit.

2) Pre-reaming: A type of drill called a back reamer is installed on the drill string and it is pulled back through the pilot hole to enlarge the tunnel to the necessary diameter for the pipeline to be installed.

3) Pullback: A fabricated segment of pipe is attached to the northern drill string and pulled back through the reamed drill hole toward the other side of the crossing.

Gas Pipeline

Permian Highway Pipeline Project

Construction Process

Permian Highway Pipeline Project

Permian Highway Pipeline Project

Environmental Considerations

Pre-Construction:

Develop a route that minimizes environmental impact by following existing utility rights-of-way where possible.

Conduct field surveys to identify and help protect sensitive resources:

- Threatened and endangered species - Wetlands and waterbodies - Cultural resources

Obtain all necessary federal, state and local environmental permits.

During Construction:

Utilize environmental inspectors throughout construction to ensure compliance with all necessary permits.

Use best management practices throughout construction, including:

Topsoil segregation and replacement Temporary and permanent erosion control

Restoration:

Restore all areas disturbed by construction activities as close as practicable to pre-construction conditions.

Seed and re-vegetate in accordance with landowner and agency requirements and permits.

Continue monitoring, restoration and reclamation process per agency requirements and permits.

Land Use Post–Construction

The PHP Project will have a permanent right-of-way approximately 50 feet wide.

Following completion of pipeline construction and restoration of the right-of-way, the landowner still may use the land over the pipeline for most purposes, including agriculture and cattle grazing. The landowner may plant smaller shrubs, flowers, bushes and grasses on the right-of way.

Landowners are not permitted to construct buildings or structures or plant deep-rooted trees in the right-of-way, as this may impede with safe operation and monitoring of the pipeline.

Permian Highway Pipeline Project

Operations & Safety

Pipelines are, by far, the safest way to transport the energy we need to fuel our everyday lives.

If any anomaly, such as an unplanned change in pressure or volume, is detected, the natural gas pipeline compressor station will automatically isolate that portion of the pipeline and shut it down.

Internal inspections are conducted periodically by passing sophisticated computerized equipment called "smart pigs" through the pipelines to detect anomalies or defects that could compromise the integrity of the line.

Visual inspections of pipeline right-of-way are conducted by air and/or ground on a regular basis. Above-ground marker signs are displayed along the right-of-way to alert the public and contractors to the existence of the pipeline.

Kinder Morgan utilizes cathodic protection to prevent corrosion on its pipelines.

Emergency preparedness and planning measures are in place at Kinder Morgan in the event that a pipeline incident occurs. The company also works closely with local emergency responders to educate them regarding our pipelines and how to respond in the unlikely event of an emergency.

Kinder Morgan's public awareness program is designed to prevent third-party damage to its pipelines.

Example of a Typical Right-of-Way Layout

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