oneok 2008 Wachovia Securities Nantucket Equity Conference

1818thth Annual Wachovia Equity ConferenceAnnual Wachovia Equity Conference1818 Annual Wachovia Equity ConferenceAnnual Wachovia Equity ConferenceNantucket, Massachusetts | June 24, 2008

John W GibsonJohn W GibsonJohn W. GibsonJohn W. GibsonONEOK, Inc. | Chief Executive OfficerONEOK Partners, L.P. | Chairman and Chief Executive Officer

Page | 2

ONEOK Partners, L.P. | Chairman and Chief Executive Officer

ForwardForward--Looking StatementLooking Statement

Statements contained in this presentation that include company Statements contained in this presentation that include company expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor

i i f th S iti A t f 1933 d th S iti provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. It is important to note that the actual results of company earnings could differ materially from those projected in any forward-looking statements. For additional information, refer to ONEOK’s and ONEOK Partners’ Securities and Exchange Commission Filingsand Exchange Commission Filings.

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AgendaAgenda

• Overview & Vision• Overview & Vision• Diversified Assets

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• Financial Highlights

Overview & VisionOverview & Vision

Page | 5

ONEOK TodayONEOK Today

• Three business segments

A Premier Energy Company

g– Distribution -- Three distribution

companies serving two million customers $521 ONEOK Partners

– Energy Services -- A leading marketer of natural gas

– ONEOK Partners -- General

$521 ONEOK Partners

ONEOK Partners General partner and 47.7 percent owner

• Expanding participation in l h i

$180

$180 Distribution

Energy ServicesOth ($2)energy value chain

• $5.2 billion market capitalization Operating Income2008 Guidance: $879 million

Other ($2)

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ONEOK TodayONEOK TodayAssets That Fit and Work Together

ONEOK DistributionONEOK Energy Services

Leased Pipeline CapacityLeased Storage Capacity

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Leased Storage Capacity ONEOK Partners

Growth Projects

Our VisionOur Vision

A premier energy company creating exceptional value for all


p gy p y g pstakeholders by:• Re-bundling services across the value chain, primarily through

ti l i t ti t id t ith i i t vertical integration, to provide customers with premium services at lower costs

• Applying our capabilities — as a gatherer, processor,Applying our capabilities as a gatherer, processor,transporter, marketer and distributor — to natural gas and natural gas liquids…

…and other commodities

Page | 8

Our Vision: A Journey by DesignOur Vision: A Journey by DesignValue Creation Through Re-bundling - 1995

Natural Gas

Marketing

Power Industrial

Distribution

Exploration & Production Gathering & Processing Pipelines/Storage Markets

Refining

Natural Gas Liquids

Petro-Chemical

Refining

Heating

1995 Financial Statistics

Total revenue: $949.9 million

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Pipelines/Storage MarketsGathering & FractionationNet income: $42.8 millionTotal assets: $1.2 billion

Our Vision: A Journey by DesignOur Vision: A Journey by DesignValue Creation Through Re-bundling - Today

Natural GasNatural Gas

Power Industrial

MarketingDistribution

Exploration & Production Gathering & Processing Pipelines/Storage Markets

Refining

Natural Gas LiquidsNatural Gas Liquids

Petro-Chemical

Refining

Heating

2007 Financial Statistics

Total revenue: $13.5 billionN t i $304 9 illi

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Pipelines/StorageGathering & Fractionation MarketsNet income: $304.9 millionTotal assets: $11.1 billion

Our Vision: A Journey by DesignOur Vision: A Journey by Design

• Established Mid-Continent presence beginning in 2000

Applying Our Capabilities to the NGL Business

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 ginternal growth projects

– Doubles the business• Acquired NGL and refined petroleum

products system to connect to the products system to connect to the Midwest markets

– Provides customers with access to suppliesFirst entrance into refined

NGL PipelinesNGL Gathering & FractionationNGL Growth ProjectsAcquired NGL Pipeline System

NGL StorageNGL FractionatorNGL Market Hub

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– First entrance into refined petroleum products market

Our Key StrategiesOur Key Strategies

• 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 d t i t ll t d th j t t – Develop and execute internally generated growth projects at ONEOK Partners

• Execute strategic acquisitions that provide long-term valueg q p 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

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p p y pp gyexecution

Diversified AssetsDiversified Assets

DistributionDistributionEnergy Services

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ONEOK Partners

DistributionDistribution

• Largest natural gas

Eighth Largest Natural Gas Distributor in the U.S.

g gdistributor in Oklahoma and Kansas; third largest in Texas

• GrowthGrowth– Efficient investments– Customers, volumes, rate base

• Long term focus has led to:• Long-term focus has led to:– Unbundling and restructuring

in OklahomaWeather normalization– Weather normalization

– Capital recovery– Bad-debt recovery

Margin stabilityCustomers 2 millionR $2 1 billi

Kansas Gas ServiceOklahoma Natural GasTexas Gas Service

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– Margin stability Revenues $2.1 billionAsset Base $2.7 billionRate Base $1.7 billion


• Return on equity

Integrated Strategy to Improve Profitability

Closing the GapSi ifi t i 2005– 2005: Oklahoma rate case

– 2006: Kansas and Texas rate cases– 2007: Five rate filings in Texas

2008: First quarter approved rate ap ap

Gap

Significant progress since 2005

Gap

Allowed

8 5 8 6

10.2

– 2008: First quarter approved rate increases of $4.2 million in Texas

– Capital recovery mechanisms in allthree statesDisciplined approach to capital

Ga Ga

n on

Equ

ity(%

)

5 3

8.5 8.6

– Disciplined approach to capital investment

• Expense control and recovery– Expense recovery mechanisms

* Ret

urn

4.9 5.3

p y– Continuous process improvement– Pipeline integrity management recovery– Pension and other post-employment

benefit costs

Total Distribution Companies2005 2006 2007 2008G 2008 Allowed

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benefit costs

* ROE calculations are consistent with utility ratemaking in each jurisdiction and not consistent with GAAP returns

Energy ServicesEnergy Services

• Access to prolific supply

Leased Assets Enhance Our Ability to Provide Premium Services to Customers

p pp yand high-demand areas

• Industry knowledge and customer relationshipscustomer relationships

• Deliver natural gas together with bundled ,reliable products and services – Premium, no-notice Storage 96 Bcf of capacity

Leased PipelineLeased Storage

Premium, no notice services

– Primarily to LDCs

Storage 96 Bcf of capacity2.4 Bcf/d of withdrawal rights1.6 Bcf/d of injection rights

Transportation 1.8 Bcf/d of firm capacitySales 3.3 Bcf/d in 2007

3.1 Bcf/d in 2006Margin $0 19/MMBtu in 2007

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Margin $0.19/MMBtu in 2007 $0.22/MMBtu in 2006


Storage Transportation Optimization Retail TradingUtilize leased capacity to meet customers’ Enhance storage and Sell natural gas supplies Extract trading

Sources of Income

Utilize leased capacity to meet customers baseload, swing and peaking requirements

Provide marketing and risk management services

Capture arbitrage opportunities

Enhance storage and transportation margins through application of market knowledge and risk management skills

Sell natural gas supplies and provide risk management services to commercial and industrial customers and to consumers who participate in LDC

Extract trading margins around our physical positions through market knowledge, volatility or inefficiencies

participate in LDC customer choice programs

Spread- and demand-based

Spread- and fee-based Spread-, commodity-and derivative-based

Commodity-based Spread-, commodity-and derivative-based

54%11% 8%

27%

6% 7%

54%27%60%27%

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2008 Operating Income Guidance $180 million

2007 Operating Income$205 million

ONEOK PartnersONEOK Partners

• Primary growth engine for ONEOK

Overview

• Aligned interests: ONEOK is general partner and 47.7 percent owner• Value creation through integrated operations• Cash flow is more than 60 percent fee based

Natural Gas Natural Gas Liquids

PipelinesGathering & Processing Gathering & Fractionation Pipelines

– Stable earnings through diversity– Diversified supply basins, producers and

t t iti t i l tilit

– Connected to over 90 percent of the Mid-Continent region’s processing plantsAllows us to provide full range of services

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contracts mitigate earnings volatility – Allows us to provide full range of services to our customers


Distribution Growth

Delivering Consistent Growth and Stable Earnings

Unitholder Return• Nine increases with ONEOK as

general partner• Target coverage ratio: 1.05x to

• Unit price increase of 27 percent since 2006

• Total return of 71 percent since 1.15x

$67 60$69.26

80%

90%

$60

$70Unit Price Total Return

$1 025 $1.04

Distributions Per Unit

2006; 137 percent since 2003

$48.00

$57.57

$67.60$61.25 $57.50 $60.90

50%

60%

70%

80%

$40

$50

$60

$0 88

$0.95 $0.97 $0.98 $0.99 $1.00 $1.01

$1.025

10%

20%

30%

40%

$10

$20

$30

ONEOK P t Al i MLP I d

$0.80

$0.88

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0%$01Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08

ONEOK Partners Alerian MLP Index

1Q06 3Q06 1Q07 3Q07 1Q08

*Unit prices are closing prices at last day of quarter; Second quarter 2008 through closing price on 6/16/08

ONEOK Partners ONEOK Partners -- Roadmap to GrowthRoadmap to Growth$1.6 Billion of Internal Growth Projects Under Way, 2007-2009

Grasslands plant expansion expansion

$30 million Guardian II Expansion

$277 millionFort Union Gas Gathering Expansion

(37% owner) Bison Pipeline(50% owner)

Piceance Lateral Piceance Lateral

Overland Pass Pipeline

$535 million

NGL & Refined Product System Acquisition$300 million

$120 millionNGL Upgrade Projects

$216 million

Woodford Extension Woodford Extension $25 million 2010 -2015 Internal Growth Projects:

$300-500 million/year

Arbuckle Pipeline $260 million

Natural Gas Gathering & ProcessingNatural Gas PipelinesNatural Gas Liquids Gathering & FractionationNatural Gas Liquids Pipelines

yplus acquisitions

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q pGrowth Projects

ONEOK Partners ONEOK Partners –– Growth StatusGrowth Status

MAJOR PROJECTS*: Contracts / Volumes Fee Based Expected In Service

Complement Existing Infrastructure and Core Operating Capabilities

pOverland Pass Pipeline Long-term supply agreement

with Williams Third Quarter 2008

Related NGL projects Infrastructure upgrades to accommodate growth Second Quarter 2008

Arbuckle Pipeline Anchor customers committed Early 2009

Piceance Lateral Dedicated supplies from two Williams plants Second Quarter 2009

Dedicated supplies from DevonWoodford Shale extension Dedicated supplies from Devonand Antero processing plants Second Quarter 2008

Grasslands Plant expansion Supply growth driven by drilling and production Second Half 2008

Fort Union Gas Gathering e pansion (37%) F ll s bscribed Phase I – CompleteFort Union Gas Gathering expansion (37%) Fully subscribed pPhase II – 2Q 2008

Guardian Pipeline extension Anchored by two 15-year agreements Fourth Quarter 2008

Bison Pipeline (50%) Anchor customer committed Fourth Quarter 2010

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Bison Pipeline (50%) Anchor customer committed Fourth Quarter 2010

* Additional project details included in the appendix, slides 53 - 69

ONEOK Partners ONEOK Partners -- Growth ContributionGrowth Contribution

• $1 6 billion of internal growth

Complements Existing Infrastructure and Core Operating Capabilities

• $1.6 billion of internal growth projects through 2009– Growth projects generate $300+

EBITDA* Generated

significant cash flow– Growth EBITDA generated is

primarily fee based$125-$150

$260+

Mill

ions

• $300-$500 million in growth projects for 2010-2015

• Incremental acquisition 2008 2009 2010$

In M

• Incremental acquisition opportunities

2008 2009 2010

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* 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

Growth at OKS benefits OKEGrowth at OKS benefits OKEHow Growth at ONEOK Partners Benefits ONEOK

DividendsNet Income

IDR and Equity Income

Higher Distributions

EBITDA Growth

Capital Projects

Unit Price AppreciationUnit Price Appreciation Share Price AppreciationShare Price Appreciation

EBITDAGrowth

OKS Incremental EBITDA is $1 million• Partnership is in “high splits”• All incremental cash flow is distributed• Annual depreciation is $125 thousand

Impacts OKE income by $684 thousand (pre-tax)• $500 thousand* from incentive distribution rights• $184 thousand* in equity earnings from general

partner interest and limited partner units owned

DistributionGrowth

Incentive Distribution Rights*

Limited Partner Units**

Every 1 cent quarterly increase Results in $3.5 million annual increase in cash flow and income before taxes

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Every 1 cent quarterly increase Results in $1.7 million annual increase in cash flow

* Assumes “high splits”** ONEOK owns 42.4 million limited partner units

Financial HighlightsFinancial Highlights

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Investing in ONEOK PartnersInvesting in ONEOK Partners

ONEOK: ONEOK Partners:

GrowthRedeploys $1 Billion

Raises $1 Billion

• Repurchased 7.5 million shares for $370million in June 2007P id $402 illi f t i d bt i

To finance $1.6 billion of internal growth projects:• Permanent debt financing of $600 million in

S t b 2007• Paid $402 million of maturing debt in February 2008

• Purchased 5.4 million OKS common units for $303 million in March 2008

September 2007• Common unit offering, generating net

proceeds of $460 million, in March 2008 – 2 5 million units public offering

– Increased ownership to 47.7 percent– Contributed $9.6 million to maintain 2

percent general partner

2.5 million units public offering– 5.4 million units sold to ONEOK

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Solid Financial PositionSolid Financial PositionStrong Balance Sheet• Strong credit rating

Stable Cash Flow• Continued strong free cash flow • Strong credit rating

– S&P: BBB– Moody’s: Baa2

• Capital Structure

• Continued strong free-cash flow available for:

– Acquisitions– Debt repayment

– Investment in OKS– Share repurchase• Capital Structure

– Goal: 50/50 Capitalization

– Debt repayment– Dividend increases

Capital

– Share repurchase

Total Debt48%

Equity52%

Surplus $160

Capital Expenditures

$182

Dividends $163

Stand –Alone Capitalization Stand –Alone Cash Flow

$163

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March 31, 2008 2008 Guidance (Millions)

Shareholder ValueShareholder Value

Dividend Growth Shareholder Return

Delivering Consistent Growth and Stable Earnings

• 12 dividend increases since January 2003

• Target: 50-55 percent of

• Share price increase of 49 percent since 2006

• Total Return of 100 percent since recurring earnings 2006; 209 percent since 2003

$51.68$51.68

120%$502 0.

34

$0.3

6

$0.3

8Dividends Per Share Share Price Total Return

$33.06$33.06$38.25$38.25

$43.12$43.12$45.29$45.29

$$$48.53$48.53

$44.63$44.63 $49.11$49.11

60%

80%

100%

$30

$40

7 0.19 $0

.21

$0.2

3$0

.25

$0.2

8

$0.3

0$0

.32

$0 $

18

0%

20%

40%

$0

$10

$20

$0.1

55 $0.1

7

$0$0.1

S&P 500ONEOK, Inc.

Page | 27

0%$01Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08Q4 2002 Q4 2003 Q4 2004 Q4 2005 Q4 2006 Q4 2007

*Share prices are closing prices at last day of quarter; Second quarter 2008 through closing price on 6/16/08

Why Invest in ONEOK?Why Invest in ONEOK?

• Strong track record of creating value for both customers and

Key Investment Considerations

g ginvestors, through rebundling services across the value chain and applying our capabilities to other commoditiesSt t i t ti lifi l b i d k k t • Strategic assets connecting prolific supply basins and key markets

• Significant growth potential through continued strategy execution• Demonstrated financial discipline• Demonstrated financial discipline• Experienced and proven management team• Talented workforce dedicated to providing safe and reliable p g

service to all our customers

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Questions & AnswersQuestions & AnswersQuestions & AnswersQuestions & Answers

Page | 29

Page | 30

AppendixAppendix

Page | 31

Our Vision: A Journey by DesignOur Vision: A Journey by DesignValue Creation Through Re-bundling – How We Got Here

Acquired NGL and refined petroleum product pipeline

t f Ki d

Acquired Texas Gas Service

Oklahoma Natural Gas and exploration &

production are primary businesses

Acquired Oklahoma gathering and

processing assets from Koch

Acquired Kansas Gas Service and Kansas natural gas pipelines

storage and marketing ,

system from Kinder Morgan

Acquired Conway NGL assets from

Texaco

businesses

1996 1998 2000 2002 2004 2006

Oklahoma Unbundling: Storage & Gathering

deregulated; Distribution & Transmission assets become

separate utilitiesAcquired 85% general partner interest

in Northern Border Partners

Acquired NGL system from Koch

storage and marketing from Western

Resources

Created ONEOK Partners: Dropped down $3 billion of assets to Northern Border

Partners; became sole

Built NGL pipeline from Bushton to

ConwayAcquired NGL storage and fractionation

199519951996

1997

1998

1999

2000

2001

2002

2003

2004

2005

200620072007

Created E S i

Sold and exited exploration &

production business

Partners; became sole general partner

assets from Kinder Morgan

Acquired gathering and processing and natural gas pipeline, storage and

marketing assets in Texas, Oklahoma and Kansas from Dynegy and Kinder

Morgan

Announced $1.6 billion of internal growth projects at

ONEOK Partners,

2006 — 2007

Energy Services

Page | 32

Sold Texas gathering and

processing assets

g ,$1.2 billion of which are

NGL related


• Synchronized rate filings

Rate Strategy Progress

y g• Maintain positive relationships with regulators

Issue Solution Oklahoma Kansas TexasMargin fluctuations Straight-fixed variable ratesMargin fluctuations Straight-fixed variable rates

Revenue decoupling 1/17Weather normalization 8/17

Earnings lag More frequent filings

C t f i dj t t 8/17Cost of service adjustment 8/17

Bad debt Commodity recovery in PGA 4/17

Fixed-price plan 1/17Average payment plan

Financial hedging 7/17Physical hedging

Capital recovery Capital recovery mechanisms 6/17Return on gas in storage 2/17

Page | 33

Incentive rates Revenue sharing 2/17


• Contract with customers to deliver natural gas, together with

What We Do

g , gbundled, reliable products and services

• Contract for natural gas supplies• Lease and optimize storage and transportation capacity• Capitalize on market irregularities and inefficiencies

g ptim

izatio

n

MarketsTransportationStorageSupply

Trad

ing

Op

• LDC • Electric Generators

• Trading Counterparties

Retail Customers:• Industrial• Commercial• Residential

Page | 34


• Utilize storage and transportation assets to enhance our ability to provide i i t t

Operating Income Sensitivities

premium services to customers• Utilize hedging related to location and seasonal spreads to capture

incremental margins

$229 $205

$200

$250

$4.00

$5.00

illion

s)

$139 $166

$ 05$180

$100

$150

$2.00

$3.00

ing

Inco

me (

Mi

$/MMB

tu

$-

$50

$-

$1.00

2004 2005 2006 2007 2008 Outlook

Oper

ati

Page | 35

2004 2005 2006 2007 2008 OutlookApr. - Dec. Storage Spread Rockies to Mid-Continent Basis Spread Operating Income


Diversified AssetsDiversified Assets

Page | 36


• One of the largest publicly

Overview

g p ytraded MLPs

• Diversified asset base and t bl h fl

$217Natural Gas Gathering & Processing

stable cash flows– More than 60 percent fee based

• Value creation through $110 Natural Gas

Pipelines

Value creation through integrated operations

• Aligned interests: $92

$105 NGL Gathering & Fractionation

NGL Pipelines

Other ($3)– ONEOK: General Partner– ONEOK: 47.7 percent owner

• $5.5 billion market capitalization

Operating Income2008 Guidance: $521 million

Other ($3)

$5.5 billion market capitalization

Page | 37

ONEOK PartnersONEOK PartnersOverview

Natural Gas Gathering & ProcessingNatural Gas PipelinesNatural Gas Liquids Gathering & Fractionation

Page | 38

Natural Gas Liquids Gathering & FractionationNatural Gas Liquids Pipelines


• Connect raw natural gas production from the wellhead to k t th h

What We Do

markets through:– 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

MarketsStorage & Transportation

Gathering & Processing

Supply

Distribution Marketing Power / Industrial

Page | 39


• Two segments

Stable Earnings Through Diversity

Grasslands Plant E i

– Natural Gas Gathering & Processing

– Natural Gas Pipelines

ExpansionGuardian II Expansion

Bison Pipeline

• Diversified supply basins producers and contracts mitigate earnings volatility in

Fort Union Gas Gathering Expansion,

,

gathering and processing• Earnings on pipelines are fee

based• More than $400 million of

internal growth projects under way through 2009 Natural Gas Gathering Pipeline

Nat ral Gas Interstate Pipeline

Page | 40

y gNatural Gas Interstate PipelineNatural Gas Intrastate PipelineNatural Gas Storage Natural Gas Processing PlantGrowth Projects

Natural Gas Gathering & ProcessingNatural Gas Gathering & Processing

Stable earnings through diversity

Key Points

Willistong g y• Multiple producing basins

effectively offset natural volume declines Wind River

Powder Riverdeclines• Supply mix between small and

large producers spreads drilling and volume exposureand volume exposure

• Makeup of contract portfolio: – Eliminates material exposure to

t l i fl t tiAnadarko

Kansas UpliftHugoton

Natural Gas Gathering PipelineNatural Gas Processing Plant

natural gas price fluctuations– Spreads NGL exposure among

six products and revenue streams

Gathering 14,300 miles of pipeProcessing 13 active plants

0.7 Bcf/d capacityProduction At first quarter 2008

1,192 BBtu/d gathered624 BBtu/d processed38 MB d NGL d d38 MBpd NGLs produced

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• Strong supply focus

SupplyGas Gathered *

BBtu/dg pp y• New well connects and

growth in the Rockies offset t l d li

1,1711,1681,1821,190 1,192

natural declines910 908 852 800 803

280 274 316 371 389

2004 2005 2006 2007 1Q08Rocky Mountain Mid-Continent

* Volumes based on existing asset base

Page | 42

g


• Contract restructuring has reduced commodity price sensitivity and increased fee-based business

Risk Mitigation

• Hedging strategy focuses on long NGL and natural gas positions– 2008: 72 percent hedged on NGLs and condensate at $1.39/ gallon and 78 percent on natural gas

at $9.23/MMBtu Commodity Price SensitivityContract Mix by Volume

27% 30% 31%

19% 15% 10% 6% 1% 1%3% 3% 3% 6% 8% 7% $4.8 $4.5

$3.8

$2.1$1 7 $1.6$1 1 $1 3 $1 0

Co od ty ce Se s t tyMargin Impact ($ Millions)

Co t act by o u e

25% 31% 34%

-$1.6

-$0.1 $0.3 $0.3

$1.7 $1.6$1.1 $1.3 $1.0$0.4 $0.5 $0.7

52% 51% 53%61% 61% 61%

2003 2004 2005 2006 2007 2008

Commodity SensitivityN t l G Li id 1 t/ ll i

-$3.5-$2.7

2003 2004 2005 2006 2007 2008Fee Based Percent of ProceedsKeep Whole Keep Whole w/conditioning

Page | 43

Natural Gas Liquids 1 cent/gallon increase

Natural Gas 10 cent/MMBtu increase

Crude Oil $1/barrel increase

Natural Gas PipelinesNatural Gas Pipelines

• Provides fee-based income

Key Points

Viking Gas Transmission

– Over 75 percent is demand/firm• Pipelines connect to key supply

aggregation points:G ardian Viking and Northern Guardian

Northern Border Pipeline

Transmission

– Guardian, Viking and Northern Border

• Midwestern Gas acts as a hub, offering numerous

Midwestern Gas Transmission

Pipeline

, ginterconnects for receipts and deliveries

• Storage provides premium “swing” i f i t t t i liservices for intrastate pipelines

• Intrastate pipelines are diversified through connections to numerous supply and market points

Natural Gas Interstate PipelineNatural Gas Intrastate PipelineNatural Gas Storage

Pipelines 6 920 miles 5 3 Bcf/d peak capacity

Page | 44

supply and market points Pipelines 6,920 miles, 5.3 Bcf/d peak capacityStorage 51.6 Bcf active working capacityEquity Investment 50% Northern Border Pipeline


• Connect raw-blended NGL production from gas processing plants to markets

What We Do

through:– Gathering via extensive pipeline systems– Fractionating to convert raw-blended NGLs to purity products

Storage services through underground caverns– Storage services through underground caverns– Marketing NGL products to end-users– Distributing purity product to markets

imiza

tion

imiza

tionMarkets

Gathering & Fractionation Storage Distribution

Opt

Opti

Petrochemical Heating RefiningNGLs EthanePropaneIsobutane

Normal ButaneNatural Gasoline

Purity Products

Page | 45


• Two segments

Largest Gatherer and Fractionator of NGLs in the Mid-Continent

– NGL Gathering & Fractionation– NGL Pipelines

• Connected to over 90 percent



pof the Mid-Continent region’s processing plants

• Allows us to provide a full range

Piceance Lateral

NGL Upgrade

Piceance Lateral

NGL Upgrade p gof services to our customers

• Integrated asset base creates opportunities for growth through

NGL Upgrade Projects

NGL Upgrade Projects Woodford Extension

major expansions into new supply areas– More than $1.2 billion of internal

th j t d

Arbuckle PipelineArbuckle Pipeline

NGL PipelinesNGL Gathering & Fractionation

NGL StorageNGL Fractionator

growth projects under way through 2009

gNGL Growth Projects NGL Market Hub

Page | 46

NGL Gathering & FractionationNGL Gathering & Fractionation

• Extensive raw NGL gathering t ith t 78

Key Points

system with access to 78 gas processing plants

• Mid-Continent supply growth since July 2005: July 2005: – Gathering volume up 30 percent– Fractionation volume up 27 percent– Fifteen new gas processing plant g g

connections completed• New supply commitments drive

infrastructure upgrades and expansions NGL Gathering Pipeline

NGL Stexpansions– Rockies– Barnett Shale– Woodford Shale

Gathering 2,570 miles of pipeFractionation 399,000 Bpd capacity


Isomerization 9,000 Bpd capacityStorage 24.6 MMBbls capacity

Page | 47

NGL Gathering & FractionationNGL Gathering & Fractionation

• Volume growth since acquisition of Koch’s NGL system in July 2005

Supply

g q y y– New processing plant connections– Growth from existing connections

246246251251

370370385385 391391

Gathering VolumeMBpd

Fractionation VolumeMBpd

213213208208 210210 210210

224224232232

309309

275275 281281

333333 326326312312 319319

349349370370

p 30

%p

30%

p 27

%p

27%

193193 189189 193193

3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08

Up

Up Up

Up

Page | 48

Q Q Q Q Q Q Q Q Q Q Q Q

NGL Gathering & FractionationNGL Gathering & FractionationSources of Margin

Exchange and Optimization Isomerization MarketingStorage Services Optimization Isomerization Marketing

Gather, fractionate, transport and store NGLs and deliver to market hubs

Obtain highest product price by directing product movement between Conway and Mont Belvieu

Convert normal butane to isobutane

Purchase approximately one-half of exchange volumes in the Mid-Continent for resale on an index-related basisand Mont Belvieu on an index related basis

Fee-based Spread-based Spread-based Fee- and Commodity-based

73%8%6% 13%79%

8%2% 11%

2007 Gross Margin Contribution$206 million

2008 Gross Margin Guidance$214 million

Page | 49

$206 million $214 million

NGL PipelinesNGL Pipelines

• Links key NGL market centers

Key Points

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

fractionatorsfractionators• Regulation

– FERC-approved tariffsNGL PipelineNGL Market Hub

Distribution 3 350 miles of pipe withDistribution 3,350 miles of pipe with 434,000 Bpd capacity

Gathering 720 miles of pipe with 93,000 Bpd capacity

Page | 50

Strong Balance SheetStrong Balance Sheet

• $1 billion revolver

Disciplined Approach to Raising Capital for Growth

• Capital structure $1 billion revolver – Funds 2008 capital expenditures

• Permanent debt financing

Capital structure – Goal: 50/50 capitalization– Strong credit ratingg

of $600 million in September 2007 EquityDebt

• Common unit offering in March 2008, generating net

d f $460 illi

y51%49%

proceeds of $460 millionCapitalization: March 31, 2008

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Stable Cash FlowStable Cash Flow

• Predominantly fee based

Cash Flow Stability Managed Within Each Segment

Predominantly fee based – Large growth projects under way increase fee-based income

• Commodity and spread risk is measured and managed – 2008: 72 percent hedged on NGLs and condensate at $1.39/gallon

and 78 percent on natural gas at $9.23/MMBtu

Fee60% Commodity

27%Spread

Fee63% Commodity

26%SpreadSpread13%

2007 Gross Margin: $896 million

Spread11%

2008 Gross Margin: $1.0 billion

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2007 Gross Margin: $896 million 2008 Gross Margin: $1.0 billion


Growth ProjectsGrowth Projects

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ONEOK Partners ONEOK Partners -- Growth ContributionGrowth Contribution

• Growth projects generate significant cash flow

Complements Existing Infrastructure and Core Operating Capabilities

p j g g• Growth EBITDA generated is primarily fee based• Incremental acquisition opportunities

$260+ $300+

$91 $1,088

…………….Capital Expenditures…...………… …………….EBITDA* Generated…...…………

$125-$150

$

In M

illio

ns

In M

illio

ns$650

$997

$60 $710

$300-$500/year

2008 2009 2010

$ I

$ I$650

$105 $60

2007 2008 2009 2010-2015M i t G th

$165

Page | 54

* 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

Maintenance Growth

Growth Projects: StatusGrowth Projects: Status

Natural Gas Liquids

Coming Online During Second-quarter 2008

Natural Gas q• $216 million Infrastructure upgrades

– Accommodates Overland Pass Pipeline supply

• $110 million Fort Union Gas Gathering expansion– 37 percent owner Pipeline supply

– Bushton fractionator expansion– Pipeline capacity expansion between

Conway, Medford and Mont Belvieu

– 37 percent owner– Fee-based earnings– Doubles capacity, fully subscribed

y• $25 million Woodford Shale extension

– 78-mile extension of Oklahoma gathering systemg g y

– Connects two processing plants capable of producing 25,000 Bpd of NGLs

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Grasslands Processing Plant Expansion

Growth Projects

Plant ExpansionProject Status

Costs $30 Million

Completion Dates

On line in phases by second half 2008

Phase 1 Phase 2

Grasslands Expansion

Processing plant tie-ins completed

Permits approved

Construction completed

Equipment ordered

Phase 1: Processing Increased from 63 to 100 MMcf/d capacity

Phase 2: Fractionation Increased from 8 to 12 MBpd capacity

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Natural Gas Gathering & ProcessingNatural Gas Gathering & ProcessingGrowth Projects

Fort Union Gas GatheringP j t St tProject Status

Costs $110 Million (Project Financed)

Completion Dates

• Phase 1 – In service • Phase 2 Second Quarter 2008Dates • Phase 2 –Second Quarter 2008

Phase 1 Phase 2

Customerscommitted *

Customerscommitted *

Right of way cleared

Right of way acquired

Pipe delivered Pipe delivered

St t d 11/07 Construction

ONEOK Partners GatheringFort Union (37%)Lost Creek (35%)Bi H (49%) Started up 11/07 Construction

contracts let

• Backed by volume commitments *• Doubles capacity

Big Horn (49%)

Fort Union Gas GatheringPhase 1: Adds 44 miles of pipe and 200 MMcf/d capacity

Phase 2: Adds 104 miles of pipe and 450 MMcf/d capacity

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Guardian Pipeline

Growth Projects

Project Status

Costs $277 Million

Completion Date

• Notice to Proceed received May 1, 2008• In service during fourth quarter 2008

Customerscommitted * Pipe ordered

In Progress Right of way acquired Pipe delivered

Permits Construction contracts let

• Fully subscribed *• Anchored by two 15-year agreements *

Guardian PipelineCapacity Incremental of 537 MMcf/d to eastern WisconsinExtension 119 miles from Ixonia to Green Bay

Existing PipelineProposed Extension

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Extension 119 miles from Ixonia to Green Bay


Bison Pipeline

Growth Projects

Project StatusCosts $498 Million

Proposed interstate pipeline that would extend

ProjectProposed interstate pipeline that would extend from natural gas gathering facilities located in the Powder River Basin to a point of interconnection with Northern Border Pipeline.

CompletionCompletion Date Projected in service November 2010

CustomersCommitted

Letter agreement reached for 250 MMcf/d foundation shipper

Bi Pi li

Bison Pipeline

Equity Investment 50% Northern Border Pipeline

Bison PipelinePipeline 289 miles, 24”Capacity • Initial 400 MMcf/d

• Maximum of 660 MMcf/d

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NGL PipelinesNGL PipelinesGrowth Projects


Project StatusCost $535 Million

Completion Date Third Quarter 2008

OpalEcho Springs

DateAnchor customers committed *

Pipe ordered

Public right of i d

Constructiont t l t



way acquired contracts let

Permit approved and federal right of way acquired

700 miles

Construction complete


Pipeline 760 miles, 14-16”

Capacity • 110,000 Bpd of raw NGLs with two pump stations

• Expandable to 220,000 Bpd with additional pump stations

• 99/1% joint venture with 50/50 option within two years of first flow

• Long-term supply agreement with Williams (~60,000 bpd) *• Additional commitments of 50,000 Bpd in various stages of

negotiation

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Overland Pass PipelineOverland Pass Pipeline760-Mile Natural Gas Liquids Pipeline from Opal, Wyoming, to Conway, Kansas

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Overland Pass PipelineOverland Pass Pipeline760-Mile Natural Gas Liquids Pipeline from Opal, Wyoming, to Conway, Kansas

Page | 62


Piceance Lateral

Cost $120 Million

Completion Second Quarter 2009

Project Status

Date Second Quarter 2009

Anchor customers committed *

Late2008

Permitting expected

I Right of way Mid ConstructionIn progress g yacquired 2008 contracts let

• 99/1% joint venture with 50/50 option within first two years of first flow

• Dedicated supplies from two Williams plants (~30,000 Bpd) *Overland Pass PipelinePiceance Lateral

Piceance LateralPipeline 150 miles, 14”Capacity 100,000 Bpd of raw NGLs

• Additional commitments in various stages of negotiation

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Natural Gas LiquidsNatural Gas LiquidsGrowth Projects

Infrastructure Upgrades

Cost $216 Million

Project Status

Infrastructure Upgrades

Bushton Fractionator

Expand facility from 80,000 to 120,000 BpdPermit approvedConstruction under way

Bushton StorageUpgrade facility to accommodate raw NGLs and ethane/propane mix

Construction under way

Bushton-to-Medford Pipeline

Construct 135-mile pipeline with a capacity of 120,000 Bpd of ethane/propane mix

Construction complete

Sterling Expansion Expand pipeline by 60,000 BpdConstruction under wayg p Construction under way

Bushton-to-Conway Expansion

Expand pipeline by 14,000 BpdEquipment ordered

NGL Gathering & FractionationNGL PipelinesNGL Storage

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NGL FractionatorNGL Market Hub

NGL Infrastructure UpgradesNGL Infrastructure UpgradesBushton, Kansas

Page | 65

NGL Infrastructure UpgradesNGL Infrastructure UpgradesBushton, Kansas

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NGL Gathering & FractionationNGL Gathering & FractionationGrowth Projects

Woodford Shale Pi li E t i

Cost $25 Million

Project Status

Pipeline Extension

Completion Date Second Quarter 2008


Pipe delivered

Public right of way acquired

In Progress Construction

• Connecting to two processing plants, operated by Devon

NGL Gathering PipelineWoodford Extension g p g p , p y

Energy and Antero Resources, in southeast Oklahoma

Woodford Shale Pipeline Extension


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Pipeline 78 miles, 6-8”Expected Volume 25,000 Bpd of raw NGLs


Arbuckle Pipeline

Cost $260 Million

Completion

Project Status

Completion Date Early 2009


Pipe delivered

In progress Right of way acquired Mid 2008 Construction

contracts let

• Expect approximately 65,000 Bpd at start up, and additional commitments of 20,000 Bpd are in various stages of negotiation *

NGL Gathering PipelineNGL PipelineNGL Arbuckle PipelineNGL Storage

stages of negotiation • Major expansion into one of the most active drilling areas

in the U.S. • Allows delivery to Gulf Coast fractionatorsArbuckle Pipeline

Pipeline 440 miles, 12-16”Capacity • 160 000 Bpd of raw NGLs with four pump

NGL FractionatorNGL Market Hub

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Capacity • 160,000 Bpd of raw NGLs with four pump stations

• Expandable to 210,000 Bpd with additional pump stations

NGL PipelinesNGL PipelinesStrategic Acquisition

NGL d R fi d P t l

Project Status

NGL and Refined PetroleumProducts System Acquisition

Cost $300 Million

Closing Date October 2007

Geographically and in NGL Value Chain:

Footprint Expansion

• Connects Bushton and Conway, Kansas,to Chicago, Illinois

• Adds a refined petroleum products line to our portfolio

Revenues > 90% fee-basedNGL PipelinesNGL Gathering & Fractionation

• First entrance into refined petroleum products market

• Creates growth opportunities in Midwest markets

NGL GrowthAcquired NGL Pipeline SystemNGL StorageNGL FractionatorNGL Market Hub

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Pipelines 1,627 miles, primarily 8-10”Capacity for Purity & Refined Products

134,000 Bpd of transport 978,000 Bbl of storage

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