1. Lehman Brothers CEO Energy/Power
Conference
New York City | September 3, 2008
y p
2. John W Gibson
W.
ONEOK, Inc. | Chief Executive Officer
ONEOK Partners, L.P. | Chairman and Chief Executive Officer
Page | 2
3. Forward-
Forward-Looking Statement
Statements contained in this presentation that include company
expectations or predictions should be considered forward-
looking statements which are covered by the safe harbor
provisions of the Securities Act of 1933 and the S
ii f th S iti A t f d th Securities and
iti d
Exchange Act of 1934. It is important to note that the actual
results of company earnings could differ materially from those
projected in such forward-looking statements. For additional
information, refer to ONEOK’s and ONEOK Partners’ Securities
and Exchange Commission Filings
Filings.
Page | 3
6. ONEOK Today
A Premier Energy Company
• Three business segments
g
– ONEOK Partners -- General
partner and 47.7 percent owner
$624 ONEOK Partners
– Distribution -- Three distribution
companies serving two million
customers
– Energy Services -- A leading $186 Distribution
marketer of natural gas
$142 Energy Services
• Expanding participation in Other ($3)
energy value chain
l hi
Operating Income
• $4.6 billion market capitalization 2008 Guidance: $949 million
Page | 6
7. ONEOK Today
Assets That Fit and Work Together
ONEOK Distribution
ONEOK Energy Services
Leased Pipeline Capacity
Leased Storage Capacity
ONEOK Partners
Growth Projects
Page | 7
8. Our Vision
A Premier Energy Company
A premier energy company creating exceptional value for all
p gy py g p
stakeholders by:
• Rebundling services across the value chain, primarily through
verticall integration, t provide customers with premium services at
ti i t ti to id t ith i i t
lower costs
• Applying our capabilities — as a gatherer, processor,
transporter, marketer and distributor — to natural gas and natural
gas liquids…
…and other commodities
Page | 8
9. Our Vision: A Journey by Design
Value Creation Through Rebundling - 1995
Natural Gas
Distribution Marketing
Power Industrial
Exploration & Production Gathering & Processing Pipelines/Storage Markets
Natural Gas Liquids
Refining
Heating Petro-
Chemical
1995 Financial Statistics
Total revenue: $949.9 million
Net income: $42.8 million Gathering & Fractionation Pipelines/Storage Markets
Total assets: $1.2 billion
Page | 9
10. Our Vision: A Journey by Design
Value Creation Through Rebundling - Today
Natural Gas
Distribution Marketing
Power Industrial
Exploration & Production Gathering & Processing Markets
Pipelines/Storage
Natural Gas Liquids
Refining
Heating Petro-
Chemical
2007 Financial Statistics
Total revenue: $13.5 billion
Net income: $304 9 million
N ti $304.9 illi
Gathering & Fractionation Pipelines/Storage Markets
Total assets: $11.1 billion
Page | 10
11. Our Vision: A Journey by Design
Applying Our Capabilities to the NGL Business
• Established Mid-Continent presence
beginning in 2000
• Acquired NGL assets from Koch in
2005
– Gained access to largest NGL
g
market hubs: Conway, Kansas, and
Mont Belvieu,Texas
• Extending our reach into the
Rockies and Barnett Shale through
g
internal growth projects
– Doubles the business
• Acquired NGL and refined petroleum
products system to connect to the
Midwest markets NGL Storage
NGL Pipelines
– Provides producers with access to NGL Fractionator
NGL Gathering & Fractionation
additional markets
NGL Market Hub
NGL Growth Projects
Acquired NGL Pipeline System
– First entrance into refined
petroleum products market
Page | 11
12. Our Key Strategies
A Premier Energy Company
• Generate consistent growth and sustainable earnings
g g
– Improve profitability of ONEOK Distribution Companies
– Continue focus on physical activities at ONEOK Energy Services
– D l and execute internally generated growth projects at
Develop d t it ll td th j t t
ONEOK Partners
• Execute strategic acquisitions that p
g q provide long-term value
g
• Manage our balance sheet and maintain strong credit ratings at or
above current level
• Operate in a safe and environmentally responsible manner
• Attract, develop and retain employees to support strategy
p py pp gy
execution
Page | 12
13. Diversified Assets
Distribution
Energy Services
ONEOK Partners
Page | 13
14. Distribution
Eighth Largest Natural Gas Distributor in the U.S.
• Largest natural g
g gas
distributor in Oklahoma and
Kansas; third largest in Texas
• Growth
– Efficient investments
– Customers, volumes, rate base
• Long term focus has led to:
Long-term
– Unbundling and restructuring
in Oklahoma
– Weather normalization Kansas Gas Service
– Capital recovery
Oklahoma Natural Gas
Texas Gas Service
– Bad-debt recovery Customers 2 million
– Margin stability Revenues
R $2.1 billi
$2 1 billion
Asset Base $2.7 billion
Rate Base $1.7 billion
Page | 14
15. Distribution
Integrated Strategy to Improve Profitability
Return on equity Closing the Gap
•
Si ifi
Significant progress since 2005
t i
2005: Oklahoma rate case
–
2006: Kansas and Texas rate cases
Gap
Gap
– 10.2
2007: Five rate filings in Texas Allowed
–
ap
ap
Ga
Ga
2008: Texas rate increases of $4 2
$4.2 8.6
86
– 8.5
85
* Return on Equity (%)
million; Oklahoma filed bad-debt recovery
– Capital recovery mechanisms in all
three states
– Disciplined approach to capital 53
5.3
n
4.9
investment
Expense control and recovery
•
Expense recovery mechanisms
p y
–
Continuous process improvement
–
Pipeline integrity management recovery
–
Total Distribution Companies
Pension and other post-employment
– 2005 2006 2007 2008G 2008 Allowed
benefit costs
* ROE calculations are consistent with utility ratemaking in each jurisdiction and not consistent with GAAP returns
Page | 15
16. Energy Services
Leased Assets Enhance Our Ability to Provide Premium Services to Customers
• Deliver natural gas
g
together with bundled,
reliable products and
services
– Premium, peaking
services
– Primarily to LDCs
• Access to prolific supply Leased Pipeline
Leased Storage
and high-demand areas Storage 91 Bcf of capacity
• Industry knowledge and
2.2 Bcf/d of withdrawal rights
1.4 Bcf/d of injection rights
Transportation 1.8 Bcf/d of firm capacity
customer relationships Sales 3.3 Bcf/d in 2007
3.1 Bcf/d in 2006
Margin $0.19/MMBtu
$0 19/MMBtu in 2007
$0.22/MMBtu in 2006
Page | 16
17. Energy Services
Sources of Income
Storage Transportation Optimization Retail Trading
Utilize leased capacity to meet customers’
customers Enhance storage and Sell natural gas supplies Extract trading
baseload, swing and peaking requirements transportation margins and provide risk margins around our
through application of management services to physical positions
Provide marketing and risk management services market knowledge and commercial and through market
risk management skills industrial customers and knowledge, volatility or
Capture arbitrage opportunities to consumers who inefficiencies
participate in LDC
customer choice
programs
Spread- and demand- Spread- and fee-based Spread-, commodity- Commodity-based Spread-, commodity-
based and derivative-based and derivative-based
7% 10%
6% 11%
53%
27%
60% 26%
2008 Operating Income Guidance
2007 Operating Income
$142 million
$205 million
Page | 17
18. Energy Services
Operating Income History
Range from low of $139 million to high of $229 million of operating income
•
Seasonal storage differentials and transportation basis differentials have
•
had the greatest impact
$5.00
$5 00 $250
$229
$205
rating Income (Millions)
$4.00 $200
$166
$142
$139
$3.00
$ $150
$
$/MMBtu
$2.00 $100
Oper
$1.00 $50
$- $0
2004 2005 2006 2007 2008 Guidance
April - December Storage Differential Rockies to Mid-Continent Basis Differential Operating Income
Page | 18
19. ONEOK Partners
Overview
• Primary growth engine for ONEOK
• Aligned interests: ONEOK is general partner and 47.7 percent owner
• Value creation through integrated operations
• Cash flow is approximately 60 percent fee based
Natural Gas Natural Gas Liquids
Gathering & Fractionation Pipelines
Gathering & Processing Pipelines
– Connected to over 90 percent of the Mid-
– Stable earnings through diversity
Continent region’s processing plants
– Diversified supply basins, producers and
– Allows us to provide full range of services
contracts mitigate earnings volatility
t t iti t i l tilit
to our customers
Page | 19
20. ONEOK Partners
Delivering Consistent Growth and Stable Earnings
Distribution Growth Unitholder Return
10 increases with ONEOK as sole Unit price increase of 25 percent
• •
general partner since 2006
Target coverage ratio: 1.05x to 1.15x Total return of 71 percent since
• •
2006 137 percent since 2003
ti
2006;
Unit Price Total Return
Distributions Per Unit
$1.06 $70 90%
$1.025 $1.04 $69.26
80%
$67 60
$67.60
$1.01
$1 01 $60
$1.00 $61.25
$0.99
$0.98 $55.90 $59.77 70%
$57.57
$0.97
$50
$0.95 60%
$48.00
$40 50%
$0.88
40%
$30
30%
$20
$0.80
20%
$10
10%
ONEOK Partners
Pt Alerian
Al i MLP Index
Id
$0 0%
1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08
*Unit prices are closing prices at last day of quarter; Third quarter 2008 through closing prices on 8/27/08
Page | 20
21. ONEOK Partners - Roadmap to Growth
$2 Billion of Internal Growth Projects Under Way, 2007-2009
Grasslands
plant expansion
$40-$45 million
Guardian II
Expansion
Fort Union Gas $277-$305 million
Gathering
Expansion
(
(37% owner)
NGL & Refined Product
System Acquisition
Overland Pass
$300 million
Pipeline
$575-$590 million
Piceance
Lateral
$110-$140 million NGL Upgrade
Projects Midwestern
$230-$240 million Extension
$69 million
Woodford
Extension
$30-$35 million
2010 -2015 Internal Growth Projects:
Arbuckle
Natural Gas Gathering & Processing
$300-500 million/year
Pipeline
Natural Gas Pipelines
$340-$360 million
Natural Gas Liquids Gathering & Fractionation plus acquisitions
l i iti
Natural Gas Liquids Pipelines
Growth Projects
Page | 21
22. ONEOK Partners – Growth Status
Complement Existing Infrastructure and Core Operating Capabilities
MAJOR PROJECTS*:
PROJECTS : Contracts / Volumes Fee Based Expected In Service
Long-term supply agreement
Overland Pass Pipeline Third Quarter 2008
with Williams
Infrastructure upgrades to
Related NGL projects In Service
accommodate growth
g
Arbuckle Pipeline Anchor customers committed Early 2009
Dedicated supplies from two
Piceance Lateral Second Quarter 2009
Williams plants
Dedicated
D di t d supplies f
li from DDevon
Woodford Shale extension In Service
and Antero processing plants
Supply growth driven by drilling
Grasslands Plant expansion Second Half 2008
and production
Fort Union Gas Gathering expansion (37%) Fully subscribed In Service
Anchored by two 15-year
Guardian Pipeline extension Fourth Quarter 2008
agreements
Midwestern Extension
Mid t E t i Fully b ib d
F ll subscribed In Service
IS i
Page | 22 * Additional project details included in the appendix, slides 52 - 66
23. ONEOK Partners - Growth Contribution
Complements Existing Infrastructure and Core Operating Capabilities
• $2 billion of internal growth
EBITDA* Generated
projects through 2009
– Growth projects generate $360
significant cash flow million
illi
$260
– Growth EBITDA generated is million
primarily fee based
• $300-$500 million of growth
projects per year in 2010-2015
• Incremental acquisition 2009 2010
opportunities
* EBITDA contributions assume projects are completed on schedule
* Does not include WMB exercising its 50/50 option in OPPL or Piceance Lateral
* Offsets natural declines in natural gas gathering and processing supplies
Page | 23
24. Growth at OKS benefits OKE
How Growth at ONEOK Partners Benefits ONEOK
IDR and
Capital EBITDA Higher Net
Equity Dividends
Projects Growth Distributions Income
Income
Unit Price Appreciation Share Price Appreciation
OKS Incremental EBITDA is $1 million Impacts OKE income by $684 thousand (pre-tax)
EBITDA • $500 thousand* from incentive distribution rights
• Partnership is in “high splits”
Growth • $184 thousand* in equity earnings from general
• All incremental cash flow is distributed
• Annual depreciation is $125 thousand partner interest and limited partner units owned
Incentive Distribution Rights*
Distribution Every 1 cent quarterly increase Results in $3.5 million annual increase in cash flow
Growth and income before taxes
Limited Partner Units**
Every 1 cent quarterly increase Results in $1.7 million annual increase in cash flow
* Assumes “high splits”
Page | 24 ** ONEOK owns 42.4 million limited partner units
26. Solid Financial Position
Strong Balance Sheet Stable Cash Flow
• Strong credit rating • Continued strong free cash flow
free-cash
available for:
– S&P: BBB
– Moody’s: Baa2 – Acquisitions – Investment in OKS
• Capital Structure – Debt repayment – Share repurchase
– Dividend increases
– Goal: 50/50 Capitalization
Capital
Total Debt Expenditures
Surplus
54% $182
$180
Equity
46%
Dividends
$163
$
Stand –Alone Cash Flow
Stand –Alone Capitalization
2008 Guidance (Millions)
June 30, 2008
Page | 26
27. Shareholder Value
Delivering Consistent Growth and Stable Earnings
Dividend Growth Shareholder Return
13 dividend increases since Share price increase of 32
• •
January 2003 percent since 2006
Target: 50-55 percent of Total Return of 79 percent since
• •
recurring earnings 2006; 178 percent since 2003
Dividends Per Share Share Price Total Return
120%
$0.40
0.38
$50 $
$51.68
$0.36
$0 100%
$0.34
$48.53
$45.29 $43.63
$0.32
$44.63
$40 $43.12
$0.30
$0.28
80%
$38.25
$0.25
$33.06
$30
$0.23
60%
$0.21
$0.19
9
$
$0.18
$0.17
$20
$0.155
40%
$10 20%
S&P 500
ONEOK, Inc.
,
$0 0%
1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08
Q4 2002 Q4 2003 Q4 2004 Q4 2005 Q4 2006 Q4 2007
*Share prices are closing prices at last day of quarter; Third quarter 2008 through closing price on 8/27/08
Page | 27
28. Key Investment Considerations
• Strong track record of creating value for both customers and
g g
investors, through rebundling services across the value chain and
applying our capabilities to other commodities
• St t i assets connecting prolific supply b i and k markets
Strategic t ti lifi l basins d key kt
• Significant growth potential through continued strategy execution
• Demonstrated financial discipline
• Experienced and proven management team
• Talented workforce dedicated to providing safe and reliable
p g
service to all our customers
Page | 28
32. Our Vision: A Journey by Design
Value Creation Through Re-bundling – How We Got Here
Acquired Oklahoma
gathering and
Oklahoma Natural Gas Acquired Kansas Gas Acquired Texas
processing assets
and exploration & Service and Kansas Gas Service Acquired NGL and refined
from Koch
natural gas pipelines,
production are primary petroleum product pipeline
businesses storage and marketing system from Ki d
tf Kinder
Oklahoma Unbundling: Acquired Conway Acquired NGL system
from Western Morgan
Storage & Gathering NGL assets from from Koch
Resources deregulated; Distribution & Texaco
Transmission assets become Acquired 85% general partner interest
separate utilities in Northern Border Partners
1996 1998 2000 2002 2004 2006
1995 2007
1997 1999 2001 2003 2005
Built NGL pipeline Created ONEOK Partners:
from Bushton to Dropped down $3 billion of
Conway assets to Northern Border
Created Acquired NGL storage and fractionation
Partners; became sole
Energy Services
E Si assets from Kinder Morgan
general partner
Sold and exited
Acquired gathering and processing and
2006 — 2008
exploration &
natural gas pipeline, storage and
production
marketing assets in Texas, Oklahoma Announced $2 billion of internal
business
and Kansas from Dynegy and Kinder growth projects at ONEOK
Morgan
g Partners,,
Sold Texas $1.4 billion of which are
gathering and NGL related
processing assets
Page | 32
33. Distribution
Rate Strategy Progress
• Synchronized rate filings
y g
• Maintain positive relationships with regulators
Issue Solution Oklahoma Kansas Texas
Margin fluctuations Straight-fixed variable rates
Revenue decoupling 1/17
Weather normalization 8/17
Earnings lag More frequent filings
Cost f
C t of service adjustment
i dj t t 8/17
Bad debt Commodity recovery in PGA Filed 4/17
Fixed-price plan 1/17
Average payment plan
Financial hedging 7/17
Physical hedging
Capital recovery Capital recovery mechanisms 6/17
Return on gas in storage 2/17
Incentive rates Revenue sharing 2/17
Page | 33
34. Energy Services
What We Do
• Contract with customers to deliver natural gas, together with
g,g
bundled, reliable products and services
• Contract for natural gas supplies
• Lease and optimize storage and transportation capacity
• Capitalize on market irregularities and inefficiencies
ptimization
Supply Markets
Storage Transportation
Trading
g
Op
• Electric
• LDC Retail Customers:
Generators • Industrial
• Trading • Commercial
Counterparties • Residential
Page | 34
36. ONEOK Partners
Overview
• One of the largest p
g publiclyy
traded MLPs
Natural Gas
• Diversified asset base and $269 Gathering &
Processing
stable cash fl
t bl h flows
• Value creation through Natural Gas
$142 Pipelines
integrated operations
• Aligned interests: NGL Gathering &
$153
Fractionation
– ONEOK: General Partner NGL Pipelines
$
$68
– ONEOK: 47.7 percent owner Other ($8)
Operating Income
• $5.4 billion market capitalization 2008 Guidance: $624 million
Page | 36
37. ONEOK Partners
Overview
Natural Gas Gathering & Processing
Natural Gas Pipelines
Natural Gas Liquids Gathering & Fractionation
Natural Gas Liquids Pipelines
Page | 37
38. Strong Balance Sheet
Disciplined Approach to Raising Capital for Growth
• $1 billion revolver • Capital structure
– Funds 2008 capital expenditures – Goal: 50/50 capitalization
– Strong credit rating
• Common unit offering in
g
March 2008, generating net
proceeds of $460 million Debt Equity
50% 50%
• Permanent debt financing
of $600 million in
September
S t b 2007
Capitalization: June 30, 2008
Page | 38
39. Stable Cash Flow
Cash Flow Stability Managed Within Each Segment
• Predominantly fee based
y
– Large growth projects under way increase fee-based income
• Commodity and spread risk is measured and managed
– 2008: 74 percent hedged on NGLs and condensate at $1.38/gallon and 54
percent on natural gas at $9.35/MMBtu
– 2009: 30 percent hedged on NGLs and condensate at $2.22/gallon
Fee Fee Commodity
60% Commodity 55% 29%
27%
Spread
Spread
16%
13%
2007 Gross Margin: $896 million 2008 Gross Margin Guidance: $1.1 billion
Page | 39
40. Natural Gas
What We Do
• Connect raw natural gas production from the wellhead to
markets through:
k t th h
Gathering and compression via extensive pipeline systems
–
Processing and treating to remove contaminants and extract natural gas liquids
–
Storage services through underground caverns
–
Transportation of residue natural gas via extensive pipeline systems, both intra-
–
and inter-state
Storage &
Gathering &
Supply Markets
Transportation
Processing
Marketing
Distribution Power / Industrial
Page | 40
41. Natural Gas
Stable Earnings Through Diversity
• Two segments Grasslands Plant
Expansion
E i
– Natural Gas Gathering & Guardian II
Expansion
Processing
– Natural Gas Pipelines
• Diversified supply basins, Fort Union Gas
Gathering Expansion
producers and contracts
mitigate earnings volatility in
gathering and processing
• Earnings on pipelines are fee Midwestern
based Extension
• More than $600 million of
internal growth projects under
way through 2009
y g Natural Gas Gathering Pipeline
Natural
Nat ral Gas Interstate Pipeline
Natural Gas Intrastate Pipeline
Natural Gas Storage
Natural Gas Processing Plant
Growth Projects
Page | 41
42. Natural Gas Gathering & Processing
Key Points
Stable earnings through diversity
g g y Williston
• Multiple producing basins
effectively offset natural volume Powder River
declines Wind River
• Supply mix between small and
large producers spreads drilling
and volume exposure Kansas Uplift
• Makeup of contract portfolio:
Hugoton
Natural Gas Gathering Pipeline
– Eliminates material exposure to Natural Gas Processing Plant
Anadarko
naturall gas price fl t ti
t i fluctuations Gathering 14,300 miles of pipe
– Spreads NGL exposure among Processing 13 active plants
0.7 Bcf/d capacity
six products and revenue streams Production 1,185 BBtu/d gathered
Second-quarter 2008 651 BBtu/d processed
40 MBpd NGL sold
MB d NGLs ld
Page | 42
43. Natural Gas Gathering & Processing
Supply
Gas Gathered *
• Strong supply focus
g pp y BBtu/d
1,190 1,188
1,182 1,168 1,171
• New well connects and
growth in the Rockies offset
naturall d li
t declines
805
800
852
910 908
383
371
316
280 274
2004 2005 2006 2007 2008
Year-to-date
Rocky Mountain
R kM i Mid-Continent
Mid C i
* Volumes based on existing asset base
Page | 43
44. Natural Gas Gathering & Processing
Risk Mitigation
Contract restructuring has reduced commodity price sensitivity and increased fee-based business
•
Hedging strategy focuses on long NGL and natural g p
gg gy g gas positions
•
– Second half 2008: 74 percent hedged on NGLs and condensate at $1.38/gallon and 54 percent on
natural gas at $9.35/MMBtu
– 2009: 30 percent hedged on NGLs and condensate at $2.22/gallon
Contract Mix by Volume Commodity Price Sensitivity
Margin Impact ($ Millions)
3% 3% $4.8
3% 6% 7%
8% $4.5
1%
10% 1%
6% $3.8
15%
19%
$2 1
$2.1
30% 32%
27% $1.6
$1.3 $1.7
$1.1 $1.0
34%
31% $0.4 $0.7
25% $0.5
$0.3 $0.2
-$0.1
-$1.6
$1 6
-$2.7
61% 61% 60%
-$3.5
53%
52% 51%
2006 2007 2008
2003 2004 2005
Commodity Sensitivity
Natural Gas Liquids 1 cent/gallon increase
2003 2004 2005 2006 2007 2008G Natural Gas 10 cent/MMBtu increase
Fee Based Percent of Proceeds Crude Oil $1/barrel increase
Page | 44 Keep Whole Keep Whole w/conditioning
45. Natural Gas Pipelines
Key Points
Provides fee-based income
• Viking Gas
Transmission
– Over 70 percent is demand/firm
Pipelines connect to key supply
• Northern Border
Pipeline
aggregation points:
Guardian
– G ardian Viking and Northern
Guardian, Pipeline
Border
Midwestern Gas
Midwestern Gas acts as a
• Transmission
hub, offering numerous
, g
interconnects for receipts and
deliveries
Storage provides premium “swing”
•
services f iintrastate pipelines
i for t t t i li
Intrastate pipelines are diversified
Natural Gas Interstate Pipeline
• Natural Gas Intrastate Pipeline
through connections to numerous Natural Gas Storage
supply and market points Pipelines 6,920 miles, 5.3
6 920 miles 5 3 Bcf/d peak capacity
Storage 51.6 Bcf active working capacity
Equity Investment 50% Northern Border Pipeline
Page | 45
46. Natural Gas Liquids
What We Do
Connect raw-blended NGL production from gas processing plants to markets
•
through:
Gathering via extensive pipeline systems
–
Fractionating to convert raw-blended NGLs to purity products
–
Storage services through underground caverns
–
Marketing NGL products to end-users
–
Distributing purity product to markets
–
Gathering &
Markets
Storage Distribution
Optimization
Fractionation
imization
Opti
Purity Products
Ethane Normal Butane Heating
NGLs Petrochemical Refining
Propane Natural Gasoline
Isobutane
Page | 46
47. Natural Gas Liquids
Largest Gatherer and Fractionator of NGLs in the Mid-Continent
• Two segments
– NGL Gathering & Fractionation Overland Pass
– NGL Pipelines Pipeline
• Connected to over 90 percent
p
of the Mid-Continent region’s Piceance Lateral
processing plants
• Allows us to provide a full range
p g NGL Upgrade
of services to our customers Projects
Woodford Extension
• Integrated asset base creates
opportunities for growth through
major expansions into new Arbuckle Pipeline
supply areas
– More than $1.4 billion of internal NGL Storage
NGL Pipelines
NGL Fractionator
NGL Gathering & Fractionation
g
growth projects under way
th j t d NGL Market Hub
NGL Growth Projects
through 2009
Page | 47
48. NGL Gathering & Fractionation
Key Points
• Extensive raw NGL gathering
system with access t 78 gas
t ith to
processing plants
• Mid-Continent supply growth since
July 2005:
– Gathering volume up 31 percent
– Fractionation volume up 20 percent
– Fifteen new gas processing plant
g g
connections completed
• New supply commitments drive
infrastructure upgrades and
expansions
NGL Gathering Pipeline
NGL St
Storage
– Rockies
NGL Fractionator
NGL Market Hub
– Barnett Shale Gathering 2,570 miles of pipe
– Woodford Shale Fractionation 399,000 Bpd capacity
Isomerization 9,000 Bpd capacity
Storage 24.6 MMBbls capacity
Page | 48
49. NGL Gathering & Fractionation
Supply
• Volume growth since acquisition of Koch’s NGL system in July 2005
g q y y
– New processing plant connections
– Growth from existing connections
Gathering Volume Fractionation Volume
MBpd MBpd
251 253
385 391
246
371
370
349
232
Up 20%
Up 31%
333 326
224
312 319
309
213
208 210 210
275 281
p
p
193 193
189
3Q05
Q 1Q06
Q 3Q06
Q 1Q07
Q 3Q07
Q 1Q08
Q 3Q05
Q 1Q06
Q 3Q06
Q 1Q07
Q 3Q07
Q 1Q08
Q
Page | 49
50. NGL Gathering & Fractionation
Sources of Margin
Exchange and
Optimization Isomerization Marketing
Storage Services
Gather, fractionate, transport Obtain highest product price Convert normal butane to Purchase approximately one-
and store NGLs and deliver to by directing product isobutane half of exchange volumes in
market hubs movement between Conway the Mid-Continent for resale
and Mont Belvieu on an index-related basis
index related
Fee-based Spread-based Spread-based Fee- and Commodity-based
4% 8%
13%
6% 18%
8% 70%
73%
2008 Gross Margin Guidance
2007 Gross Margin Contribution
$260 million
$206 million
Page | 50
51. NGL Pipelines
Key Points
• Links key NGL market centers
at Conway, Kansas, and
Mont Belvieu, Texas
• Connects Mid-Continent to
upper Midwest
• Significant supply sources in
Mid-Continent
– Connected to 23 gas processing
plants with access to another 55
– Connected to seven
fractionators
• Regulation NGL Pipeline
NGL Market Hub
– FERC-approved tariffs
Distribution 3,350
3 350 miles of pipe with
434,000 Bpd capacity
Gathering 720 miles of pipe with
93,000 Bpd capacity
Page | 51
53. ONEOK Partners - Growth
Complements Existing Infrastructure and Core Operating Capabilities
• $2 Billion of internal growth ....................Capital Expenditures....................
projects under way, 2007-2009 $1,314
$84
• Growth EBITDA* generated is
primarily fee based
$ In Millions
$710
– 2009: $260 million $60
$300-$500/year
$1,230
– 2010: $360 million $285
$650
$75
• $300 - $500 million of growth $210
projects indentified per 2007 2008 2009 2010-2015
year, 2010 2015
2010-2015 Maintenance Growth
* EBITDA contributions assume projects are completed on schedule
* Does not include WMB exercising its 50/50 option in OPPL or Piceance Lateral
* Offsets natural declines in natural gas gathering and processing supplies
Page | 53
54. Natural Gas Gathering & Processing
Growth Projects
Grasslands Processing
Plant Expansion
Project Status
Costs $40 - $45 Million
Completion On line in phases by
second half 2008
Dates
Phase 1 Phase 2
Processing plant Permits
tie-ins completed approved
Construction Equipment
completed ordered
Grasslands Expansion
Phase 1: Processing Increased from 63 to 100 MMcf/d capacity
Phase 2: Fractionation Increased from 8 to 12 MBpd capacity
Page | 54
55. Natural Gas Gathering & Processing
Growth Projects
Fort Union Gas Gathering
Project Status
P j t St t
Costs $120 - $130 Million (Project Financed)
Completion
In Service
Dates
Phase 1 Phase 2
Customers Customers
committed * committed *
Construction Construction
complete complete
ONEOK Partners Gathering
In service 11/07 In service 7/08
Fort Union (37%)
Lost Creek (35%)
Big Horn (49%)
Bi H
• Backed by volume commitments *
• Doubled capacity
Fort Union Gas Gathering
Phase 1: Adds 44 miles of pipe and 200 MMcf/d capacity
Phase 2: Adds 104 miles of pipe and 450 MMcf/d capacity
Page | 55
56. Natural Gas Pipelines
Growth Projects
Guardian Pipeline
Project Status
Costs $277 - $305 Million
Completion • Notice to Proceed received May 2008
Date • In service during fourth quarter 2008
Customers
Pipe ordered
committed *
Right of way
Pipe delivered
possession
Construction
Permits
contracts let
Existing Pipeline
• Fully subscribed *
Proposed Extension
• Anchored by two 15-year agreements *
Guardian Pipeline
Capacity Incremental of 537 MMcf/d to eastern Wisconsin
Extension 119 miles from Ixonia to Green Bay
Page | 56
57. NGL Pipelines
Growth Projects
Overland Pass Pipeline
Project Status
Cost $575 - $590 Million
Opal
Echo Springs
Completion Partial start-up in third quarter 2008,
remaining in fourth quarter 2008
Date
Anchor
customers Pipe ordered
committed *
Public right of Construction
way acquired
id contracts l t
t t let
Permit
730
approved and Construction
federal right of complete
Overland Pass Pipeline miles
way acquired
Overland Pass Pipeline
• 99/1% joint venture with 50/50 option within two years of first flow
Pipeline 760 miles, 14-16”
• Dedicated supplies from two Williams plants (~60,000 Bpd) in Wamsutter
Capacity • 110,000 Bpd of raw NGLs with two pump Area and two Williams plants in Piceance Basin (~30,000 Bpd) *
stations • Additional commitments of 110,000 Bpd in various stages of negotiation
• Expandable to 255,000 Bpd with additional
pump stations
Page | 57
58. Overland Pass Pipeline
760-Mile Natural Gas Liquids Pipeline from Opal, Wyoming, to Conway, Kansas
Page | 58
59. Overland Pass Pipeline
760-Mile Natural Gas Liquids Pipeline from Opal, Wyoming, to Conway, Kansas
Page | 59
60. NGL Pipelines
Growth Projects
Piceance Lateral
Project Status
Cost $110 - $140 Million
Completion
Second Quarter 2009
Date
Anchor
Late Permitting
customers
2008 expected
committed *
Right of way
g y Mid Construction
In
I progress
acquired 2008 contracts let
• 99/1% joint venture with 50/50 option within two years of
first flow
Overland Pass Pipeline
• Dedicated supplies from two Williams plants (~30,000 Bpd) *
Piceance Lateral
• Additional commitments in various stages of negotiation
Piceance Lateral
Pipeline 150 miles, 14”
Capacity 100,000 Bpd of raw NGLs
Page | 60
61. Natural Gas Liquids
Growth Projects
Infrastructure Upgrades
Project Status
Cost $230 - $240 Million
Expand facility from 80,000 to 150,000 Bpd
Bushton
Phase I - complete
Fractionator
• Phase II - third quarter 2008
Upgrade facility to accommodate additional
Bushton Storage ethane/propane mix
Construction complete
Construct 135-mile pipeline with a capacity of
Bushton-to-
120,000 Bpd of ethane/propane mix
Medford Pipeline
Construction complete
Expand pipeline by 60,000 Bpd
Sterling Expansion
gp
Construction complete
Bushton-to- Expand pipeline by 14,000 Bpd
Conway Expansion Construction complete
NGL Gathering & Fractionation
NGL Pipelines
NGL Storage
NGL Fractionator
NGL Market Hub
Page | 61
