Kinder Morgan Energy Partners Increases Quarterly Distribution to $1.30 Per Unit

  Kinder Morgan Energy Partners Increases Quarterly Distribution to $1.30 Per
  Unit

                        Up 8% Over First Quarter 2012

Business Wire

HOUSTON -- April 17, 2013

Kinder Morgan Energy Partners, L.P. (NYSE: KMP) today increased its quarterly
cash distribution per common unit to $1.30 ($5.20 annualized) payable on May
15, 2013, to unitholders of record as of April 29, 2013. This represents an 8
percent increase over the first quarter 2012 cash distribution per unit of
$1.20 ($4.80 annualized) and is up from $1.29 per unit ($5.16 annualized) for
the fourth quarter of 2012. KMP has increased the distribution 47 times since
current management took over in February 1997.

Chairman and CEO Richard D. Kinder said, “KMP had a strong first quarter as
our stable and diversified assets continued to grow and produce incremental
cash flow. Our five business segments produced approximately $1.276 billion in
segment earnings before DD&A and certain items, a 24 percent increase over the
first quarter of 2012. KMP also produced cash in excess of our first quarter
distribution of approximately $62 million. Growth was spearheaded by
contributions from the drop downs of Tennessee Gas Pipeline (TGP) and El Paso
Natural Gas (EPNG), record export coal volumes in our Terminals business,
strong oil and record NGL production at SACROC in our CO[2 ]segment, and good
results in our Products Pipelines business. Looking forward, we see
exceptional growth opportunities across all of our business segments, as there
is a need to build additional midstream infrastructure to move or store oil,
gas and liquids from the prolific shale plays in the United States and the
oilsands in Alberta, along with increasing demand for export coal and CO[2].
We currently have identified more than $11 billion in expansion and joint
venture investments at KMP and we are pursuing customer commitments for many
more projects. Additionally, we expect to close the Copano acquisition in
early May, and we look forward to adding Copano’s strategic gathering and
processing assets and talented employees to the KMP team.”

KMP reported first quarter distributable cash flow before certain items of
$550 million, up 19 percent from $462 million for the comparable period in
2012. Distributable cash flow per unit before certain items was $1.46 compared
to $1.37 for the first quarter last year. First quarter net income before
certain items was $655million compared to $534 million for the same period in
2012. Including certain items, net income was $792 million compared to $208
million for the first quarter last year. Certain items for the first quarter
totaled a net gain of approximately $137million (the majority of which
pertained to a gain on the sale of the Express-Platte Pipeline) versus a net
loss of $326 million for the same period last year.

Overview of Business Segments

The Natural Gas Pipelines business produced first quarter segment earnings
before DD&A and certain items of $497 million, up 78 percent from $279 million
for the same period last year due to dropdowns in 2012 and 2013 following the
close of the El Paso Corporation acquisition in May of 2012. This segment is
currently on track to meet its published annual budget of 54 percent growth.

“Growth in this segment compared to the first quarter last year was driven by
KMP’s purchases of Tennessee Gas Pipeline, El Paso Natural Gas pipeline and
certain midstream assets,” Kinder explained. “First quarter earnings in this
segment also benefited from good results at our Eagle Ford assets.” Natural
Gas Pipelines segment’s earnings were impacted in the first quarter by the
November 2012 divestitures of our Rockies assets, but that impact was more
than mitigated by the dropdowns, as KMP now owns 100 percent of TGP, EPNG and
El Paso’s former midstream assets.

Overall segment transport volumes were up 7 percent in the first quarter
compared to the same period last year, reflecting higher Eagle Ford volumes
and increased deliveries to Mexico on the Texas intrastate pipeline system, a
new supply project at TGP and colder weather in the Northeast.

“We continue to believe that natural gas is the future play for America
because it’s domestic, clean, abundant and very reasonably priced,” Kinder
stated. “Everything points to the continued development of natural gas
supplies in the United States, which drives demand for midstream
infrastructure to connect the additional supplies to markets. This should
create significant opportunities for KMP.”

The CO[2] business produced first quarter segment earnings before DD&A and
certain items of $340 million, up 1 percent from $337million for the same
period in 2012, and currently is expected to be slightly above its published
annual budget of 5 percent growth.

“Our CO[2] business had a good first quarter led by strong oil and record NGL
production at SACROC, along with increased production at the Katz Field,”
Kinder said. “The Snyder Gas Plant had record gross NGL production of 20.5
thousand barrels per day (MBbl/d) for the first quarter, up 15 percent from
the same period in 2012. This is the first time that we have averaged over 20
MBbl/d for a full quarter and we also set a new monthly record of almost 21
MBbl/d for February. This segment continued to be impacted by lower NGL
prices, however, which declined about 24 percent compared to the first quarter
of 2012. It was also negatively impacted by a wide Midland-Cushing spread
(which lowered our average price per barrel) during January and February,
which has now corrected.”

Oil production at the SACROC Unit increased to 30.7 MBbl/d in the first
quarter, up 14percent from 26.9 MBbl/d for the same period last year, and
above plan. Production continued to be relatively stable at the Yates Field,
which produced 20.5MBbl/d in the first quarter, about 3 percent down from
21.2 MBbl/d for the same period last year, but relatively flat to plan.
Production at the Katz Field was 2.1 MBbl/d in the first quarter, up
significantly from 1.5 MBbl/d for the same period last year. While oil
response is improving at Katz, production was slightly below plan for the
first quarter. The average West Texas Intermediate (WTI) crude oil price for
the first quarter was $94.37, compared to the $91.68 per barrel that was
assumed when the company developed the 2013 budget.

In this segment KMP is exposed to commodity price risk, but that risk is
partially mitigated by a long-term hedging strategy intended to generate more
stable realized prices. The realized weighted average oil price per barrel for
the first quarter, with all hedges allocated to oil, was $86.85 versus $90.63
for the same period in 2012. The realized weighted average NGL price per
barrel for the year, allocating none of the hedges to NGLs, was $46.48 for the
first quarter compared to $61.36 for the same period in 2012.

The Products Pipelines business produced first quarter segment earnings before
DD&A and certain items of $200 million, up 14 percent from $176 million for
the comparable period in 2012, and currently is on track to slightly exceed
its published annual budget of 6 percent growth.

“The increase in earnings compared to the first quarter of 2012 was driven by
higher volumes and revenues from the Cochin Pipeline, higher transmix volumes
with improved margins and contributions from the Kinder Morgan Crude and
Condensate Pipeline, which was completed in the second quarter of 2012,”
Kinder said. “NGL volumes and revenues increased approximately 32 percent and
56 percent, respectively, compared to the first quarter last year reflecting
the ethane-propane mix Cochin began transporting in June of 2012. Also in the
first quarter, we entered into an additional long-term contract with BP North
America to construct a second phase of the condensate splitter project on the
Houston Ship Channel. This approximately $360 million initiative is one of
several large projects (see other news section) that will drive future
earnings in this segment.”

Total refined products volumes for the first quarter were up 1.4 percent and
revenues increased by 2 percent compared to the same period last year
including Plantation. Overall segment gasoline volumes (including transported
ethanol on the Central Florida Pipeline) were up 2.8 percent compared to the
first quarter of 2012, and up 15 percent on Plantation due primarily to
allocations from a competing pipeline. Overall segment diesel volumes declined
2.4percent versus the first quarter last year, while jet fuel volumes were up
1.1 percent. Gasoline and diesel volumes continued to decline at CALNEV due to
a competing pipeline, although military volumes increased nicely. Across the
entire system, military jet fuel volumes were up 2.6 percent compared to the
first quarter of 2012.

The Products Pipelines segment handled over 9 million barrels of biofuels
(ethanol and biodiesel) in the first quarter, up 20 percent from the same
period a year ago, driven in part by the August 2012 acquisition of a biofuel
transload terminal in South Carolina. This segment continues to make
investments in assets across its operations to accommodate more biofuels.

The Terminals business produced first quarter segment earnings before DD&A and
certain items of $187 million, flat with the first quarter of 2012, and
currently expects to be slightly below its published annual budget of 12
percent growth.

“Highlights for the first quarter included record demand for export coal and
higher earnings from certain liquids terminals,” Kinder said. “Pier IX had a
record month for March with outbound coal volumes of more than 1.7 million
tons. Export coal volumes increased by 12percent for the first quarter versus
the same period last year, although we continued to experience weakness in
domestic coal volumes.” Liquids terminals in the Northeast and the Gulf
realized higher earnings due to new and restructured contracts with higher
rates. This segment was impacted by a decrease in petcoke volumes compared to
the first quarter of 2012 due to numerous refinery shutdowns and a decline in
steel volumes.

“Also in the first quarter, KMP announced its fifth crude by rail project (see
other news), which is part of KW Express, our joint venture with Watco
Companies,” Kinder said. “As discussed at our investor conference in January,
the Terminals segment is well positioned to benefit from the growing crude by
rail opportunities, and we currently have signed or are pursuing over $400
million in crude by rail projects across North America.”

For the first quarter, Terminals handled 15.2 million barrels of ethanol, down
compared to the same period last year. The decrease was primarily due to the
conversion to crude and vegetable oil at two terminals that handled ethanol,
along with a decline in volumes at the company’s coastal facilities
attributable to increased import barrels, which was partially offset by higher
ethanol volumes at KMP’s inland terminals. Combined, the terminals and
products pipelines business segments handled 23.9 million barrels of ethanol,
a 5 percent decline versus the first quarter of 2012. KMP continues to handle
approximately 30percent of the ethanol used in the United States.

Kinder Morgan Canada produced first quarter segment earnings before DD&A and
certain items of $52 million, up 4 percent from $50 million for the same
period in 2012. Kinder Morgan Canada is expected to come in below its
published annual budget of 3 percent growth due to the sale of Express-Platte.
However, overall at KMP, the sale is expected to be modestly accretive.

“Growth in the first quarter compared to the same period last year resulted
from strong performance at the Express-Platte pipeline system and increased
deliveries into Washington state on our Puget Sound pipeline system,” Kinder
said. A new three-year toll agreement on Trans Mountain has now been approved
by the National Energy Board and goes through 2015 which will benefit this
segment moving forward.

2013 Outlook

As previously announced, KMP expects to declare cash distributions of $5.28
per unit for 2013, a 6 percent increase over its 2012 distribution of $4.98
per unit. KMP’s 2013 budget included the March 1 dropdown noted in the Natural
Gas Pipelines section. (KMR also expects to declare distributions of $5.28 per
share for 2013, and the distribution to KMR shareholders will be paid in the
form of additional KMR shares.)

In 2013, KMP expects to:

  *Generate over $5.4 billion in business segment earnings before DD&A
    (adding back KMP’s share of joint venture DD&A), an increase of about $0.9
    billion over 2012.
  *Distribute over $2 billion to its limited partners.
  *Produce excess cash flow of more than $30 million above its distribution
    target of $5.28 per unit.
  *Invest over $3 billion in expansions (including contributions to joint
    ventures) and small acquisitions (excluding the dropdowns from Kinder
    Morgan, Inc. (NYSE: KMI)). Over $625million of the equity required for
    this investment program is expected to be funded by KMR dividends.

KMP’s expectations assume an average WTI crude oil price of approximately
$91.68 per barrel in 2013, which approximated the forward curve at the time
the budget was prepared. The overwhelming majority of cash generated by KMP’s
assets is fee based and is not sensitive to commodity prices. In its CO[2]
segment, the company hedges the majority of its oil production, but does have
exposure to unhedged volumes, a significant portion of which are natural gas
liquids. For 2013, the company expects that every $1 change in the average WTI
crude oil price per barrel will impact the CO[2 ]segment by approximately
$6million, or approximately 0.1percent of KMP’s combined business segments’
anticipated segment earnings before DD&A.

Other News

Natural Gas Pipelines

  *On Jan. 29, KMP and Copano entered into a definitive agreement whereby KMP
    will acquire all of Copano’s outstanding units for a total purchase price
    of approximately $5 billion, including the assumption of debt. The
    transaction, which is expected to close in early May of 2013, is subject
    to a vote of the Copano unitholders and customary closing conditions.
    Copano is a midstream natural gas company with operations primarily in
    Texas, Oklahoma and Wyoming, and provides comprehensive services to
    natural gas producers, including gathering, processing, treating and
    fractionation. Copano owns an interest in or operates about 6,900 miles of
    pipelines with 2.7 billion cubic feet per day (Bcf/d) of natural gas
    throughput capacity, and nine processing plants with more than 1 Bcf/d of
    processing capacity and 315 million cubic feet per day (MMcf/d) of
    treating capacity.
  *On March 1, KMP completed the previously announced acquisition (dropdown)
    of 50percent of El Paso Natural Gas Company, L.L.C. (EPNG) and 50 percent
    of former El Paso Midstream assets in Utah and South Texas from KMI. KMP
    now owns 100 percent of these assets. The transaction had a total value of
    approximately $1.655 billion, including approximately $560 million of
    proportional debt at EPNG. The transaction was immediately accretive to
    cash available for distribution to KMP unitholders.
  *Work continued in the first quarter at various permitted and approved
    areas in Pennsylvania and New Jersey on TGP’s Northeast Upgrade Project
    and construction is scheduled to begin this spring on the mainline and
    compression. TGP is in receipt of all Federal Energy Regulatory Commission
    (FERC) notices to proceed and construct, except for a horizontal
    directional drill for a river channel crossing for which approval is
    expected in the second quarter. The approximately $464 million project
    will boost capacity on TGP’s system by approximately 636 million cubic
    feet per day via five segment loops and system upgrades, and provide
    additional take-away capacity from the Marcellus shale area. The fully
    subscribed project is expected to be in service in November.
  *Tree clearing for TGP’s Marcellus Pooling Point project is scheduled to be
    finished in June, followed by construction of pipeline and compression
    during the remainder of the summer and the fall, with completion of the
    project in November. The approximately $86 million project, which is fully
    subscribed, will provide about 240,000 dekatherms per day of additional
    firm Marcellus transportation capacity. The project includes nearly 8
    miles of 30-inch diameter pipeline looping, system modifications and
    upgrades to allow bi-directional flow at four existing compressor stations
    in Pennsylvania.
  *The comment period closed March 14, 2013, on an environmental assessment
    issued by the FERC for the proposed approximately $84 million Rose Lake
    Expansion Project, which would provide long-term firm transportation
    service for two shippers that have fully subscribed 230,000 dekatherms per
    day (Dth/d) of firm capacity offered in TGP’s Zone 4 in Pennsylvania. TGP
    proposes to retire older compressor units, add new, more efficient and
    cleaner burning units, and make other modifications involving three
    existing compressor stations that serve its 300 Line, all in northeastern
    Pennsylvania. The project contemplates receiving a FERC certificate of
    public convenience and necessity and an air permit in September and
    beginning construction this fall, subject to regulatory approvals. The
    anticipated in service date is November 2014.
  *Sierrita Gas Pipeline successfully concluded an open season and executed a
    transportation services agreement with MGI Supply, a subsidiary of Pemex.
    The approximately $200million proposed Sierrita Pipeline Project includes
    construction of a 60-mile lateral pipeline from near Tucson, Ariz., to the
    Mexican border at Sasabe, Ariz., where it will connect with a new pipeline
    planned on the Mexican side of the border. The 36-inch Sierrita lateral
    pipeline will have approximately 200 MMcf/d of capacity. A project
    application for a certificate of public convenience and necessity, as well
    as a request for presidential permit for export authorization to Mexico,
    was filed in February with the FERC. KMP will operate the system and own
    35 percent of the project.
  *KMP entered into new and extended long-term transportation and storage
    agreements with Calpine Energy Services in February. KMP will provide up
    to 450,000 Dth/d of firm transportation service, along with 5 billion
    cubic feet (bcf) of storage capacity, to serve nine of Calpine’s electric
    generation facilities in Texas. These new agreements provide for increases
    of 150,000 Dth/d of transport and 1 bcf of storage above the agreements
    previously in place. KMP will invest approximately $30million to expand
    its Texas intrastate pipeline system in South Texas to extend service to
    Calpine’s generating station in Hidalgo County.
  *KMP’s Midstream group placed in service in late March its $29 million West
    Clear Lake Storage Field deliverability enhancement project, south of the
    Houston metropolitan area. The storage field has been enhanced with 8,000
    horsepower of additional compression, surface equipment and well
    optimizations. The storage field, which has 85 bcf of working gas
    capacity, now has increased injection and withdrawal capabilities.
  *On April 2, KMP began a 30-day binding open season to determine industry
    interest in the development of the proposed Freedom Pipeline, which would
    convert a portion of EPNG from natural gas to crude service and transport
    crude oil from the Permian Basin of West Texas to serve the refining
    complexes in northern and southern California. The approximately
    1,025-mile Freedom Pipeline is the only proposed westbound crude oil
    pipeline from the Permian Basin and would enable the transportation of
    crude from Wink, Texas, to anticipated intrastate pipeline interconnection
    locations near Emidio and Pentland, Calif. As currently conceived, the
    project would have an initial capacity of 277,000 barrels per day (bpd).
    Subject to receiving customer support and regulatory approvals,
    construction could begin by June 2015 with an in service date late in the
    fourth quarter of 2016.

CO[2]

  *Work is underway on an approximately $210 million expansion of the Yellow
    Jacket Central Facility at the McElmo Dome CO[2 ]source field in
    southwestern Colorado – the first of four planned projects that will
    increase CO[2] production from 1.1 Bcf/d to 1.23 Bcf/d for many years.
    KMP, operator of the McElmo Dome Unit, will construct four new booster
    compressors with a total of 47,000 horsepower as part of the expansion in
    addition to modifying piping at remote facilities upstream of the facility
    to loop parts of the company’s gathering system. KMP expects to begin
    construction in June with a planned in service date of November 2014.
  *KMP continues to make good progress on the $255 million expansion of its
    Doe Canyon Unit CO[2] source field in southwestern Colorado where the
    company is adding primary and booster compression to increase capacity
    from 105 MMcf/d to 170 MMcf/d. The primary compression is expected to be
    in service in the fourth quarter of 2013 and the booster compression in
    the second quarter of 2014. The project is on schedule and on budget.
  *Construction is also progressing on KMP’s project to increase the capacity
    on its Wink Pipeline System that moves crude from the company’s West Texas
    oil fields to Western Refining Company’s facility in El Paso, Texas. The
    company is working to expand the pipeline’s capacity from 132,000 bpd to
    145,000 bpd to meet expected higher future refinery throughput
    requirements at Western’s refinery and expects to complete the project in
    the third quarter this year.

Products Pipelines

  *KMP secured a long-term, fee-based agreement with BP North America in late
    March to underwrite an additional 50,000 bpd of capacity at the petroleum
    condensate processing facility Kinder Morgan is building near its Galena
    Park terminal on the Houston Ship Channel. With the new agreement, KMP
    will invest a total of approximately $360 million in the facility, which
    will have processing capacity of 100,000 bpd. The investment also includes
    building an additional 700,000 barrels of storage capacity for product
    being split at the facility. The company expects the first phase of the
    splitter to be completed in the first quarter of 2014 and the second unit
    to be in service in the second quarter of 2015.
  *KMP continues work on a 27-mile, 12-inch diameter lateral pipeline with
    associated receipt facilities connecting the Kinder Morgan Crude and
    Condensate pipeline to Phillips 66’s Sweeny Refinery in Brazoria County,
    Texas. Through the approximately $90 million project, KMP will provide
    Phillips 66 with a significant portion of the lateral pipeline’s initial
    30,000bpd of capacity, which is expandable to 100,000 bpd. The project
    also involves KMP constructing a five-bay truck offloading facility and
    three new storage tanks with approximately 360,000barrels of
    crude/condensate capacity at stations in DeWitt and Wharton counties in
    Texas. KMP is on schedule to begin initial deliveries early in the fourth
    quarter of 2013, with the entire system being operational by year end.
  *KMP is on budget and on schedule to complete the construction of the
    approximately $220million Parkway Pipeline, a joint venture with Valero,
    in September 2013. The pipeline will transport gasoline and diesel from a
    refinery in Norco, La., to an existing petroleum transportation hub in
    Collins, Miss., which is owned by Plantation Pipe Line Company. The
    company completed the Lake Pontchartrain crossing portion of the 141-mile,
    16-inch pipeline system in February.
  *KMP continues its preparations to move light condensate from Kankakee
    County, Ill., to existing terminal facilities near Fort Saskatchewan,
    Alberta, following the receipt of more than 100,000 bpd of binding
    commitments for a minimum 10-year term during a successful open season
    last year for its Cochin Pipeline Reversal Project. The company will begin
    modifications to the western leg of the Cochin Pipeline to Fort
    Saskatchewan pending the receipt of a final permit for the approximately
    $260million project. In addition to the pipeline modifications, Cochin
    will build a tank farm with 1 million barrels of storage and associated
    piping where Cochin will interconnect with Explorer Pipeline Company’s
    pipeline in Kankakee County. KMP expects light condensate shipments to
    begin as early as July 1, 2014.
  *KMP recently completed modifications to provide for the receipt, storage
    and blending of biodiesel at its Las Vegas, Nev., and Phoenix, Ariz.,
    terminals. The company plans to begin customer blending in the early part
    of the second quarter.

Terminals

  *KMP finalized agreements to support the construction of an additional 1.2
    million barrels of merchant storage at its Edmonton Terminal inStrathcona
    County, Alberta. Construction of the new tankage is scheduled to commence
    this spring following receipt of supporting permits, with completion
    expected in late 2014. Phase 2 will cost approximately $112million.
    Construction of Phase 1 of the expansion, which consists of 3.6 million
    barrels of new storage, is well underway and expected to be completed in
    December of 2013. Total capital investment for the combined 4.8 million
    barrel project is approximately $420 million and is supported by long-term
    contracts with major producers and refiners. When completed, total storage
    capacity at the Edmonton facility will be 9.4 million barrels, including
    the existing Trans Mountain system facility and the North 40 merchant
    terminal.
  *In February, KMP announced that its crude by rail partnership with Watco
    Companies – KW Express – entered into a long-term agreement with Mercuria
    Energy Trading Company to construct a 210,000 bpd crude by rail project at
    the Greens Port Industrial Park on the Houston Ship Channel. The project
    will enable Mercuria to source crude from various origination locations
    including Cushing, Okla., West Texas, the Bakken shale area and western
    Canada for delivery by rail into the Houston Ship Channel for distribution
    to various refiners via pipeline and barges. The facility will have the
    capability to load and unload up to three unit trains per day of crude oil
    and condensate, and provide for up to 100,000 bpd of barge loading
    capacity. KW Express will own a minimum of 85 percent of the project and
    Mercuria will own the remaining interest.
  *Construction continues on the approximately $430 million Battleground Oil
    Specialty Terminal (BOSTCO) located on the Houston Ship Channel. The first
    phase of the project includes construction of 52 storage tanks that will
    have a capacity of 6.5 million barrels for handling residual fuels and
    other black oil terminal services. Terminal service agreements or letters
    of intent have been executed with customers for all of the capacity.
    Commercial operations are expected to begin in the third quarter of 2013.
    Contingent on finalizing the terminal service agreement, an approximately
    $55 million expansion for an additional six tanks totaling 900,000 barrels
    of ultra low sulphur diesel will be added to the project. KMP owns 55
    percent of BOSTCO.
  *KMP continues to expand its chemical storage capacity. KMP has entered
    into a long-term contract with Methanex Corporation to support the
    construction of methanol storage capacity near Kinder Morgan’s Geismar
    Liquids Terminal in Louisiana. KMP will build, own and operate the storage
    tanks and related infrastructure, including improvements to its existing
    dock. The assets will provide critical marine, rail and truck access in
    support of a 1 million tonne per year methanol production plant being
    relocated by Methanex from Chile, South America. The terminal
    infrastructure is expected to be in service during the second half of
    2014, coinciding with the anticipated startup of the relocated plant.
    Additionally, KMP has acquired a 26-acre terminal located in Chester,
    S.C., from Quality Carriers. The 19-tank facility currently provides
    storage for a single customer of 35,000 barrels and receives product by
    rail and distributes by truck. KMP is also expanding the chemical storage
    capacity at its liquids terminal in Harvey, La. Subject to customer
    agreements, the project could include up to an additional 17 storage tanks
    with a combined capacity of 285,000barrels. Combined, these three
    investments total more than $65 million.
  *Deeprock Development (a joint-venture between Deeprock Energy Resources
    and KMP) will build three new 250,000-barrel storage tanks and one new
    pipeline as part of a terminal expansion in Cushing, Okla. As previously
    announced Deeprock Development initially executed a long-term terminal
    lease and operating agreement with Pony Express Pipeline (now owned by
    Tallgrass Energy Partners) to handle up to 240,000 bpd of crude oil from
    Pony Express. Tallgrass subsequently exercised its option to have Deeprock
    Development expand the project. Following completion, the terminal will
    handle up to 350,000 bpd and will serve as the pipeline staging area with
    connectivity to five destinations. KMP owns 51percent of the project and
    will contribute $11 million of the almost $21 million project.

Kinder Morgan Canada

  *In March, KMP closed its previously announced sale of its one-third
    interest in the Express-Platte pipeline system to Spectra Energy Corp for
    approximately $400 million. Based on the structure of KMP’s investment
    with the Express-Platte Pipeline partners, KMP received approximately $15
    million of cash flow on an annual basis from its investment, consisting
    primarily of debenture interest. KMP plans to redeploy the proceeds from
    the sale into various growth projects to further benefit its unitholders.
  *As previously announced, KMP updated the binding commercial support for
    its proposed expansion of the Trans Mountain pipeline system following
    completion of a supplemental open season in the first quarter. Thirteen
    companies in the Canadian producing and oil marketing business signed firm
    contracts bringing the total volume of committed shippers to approximately
    700,000 bpd. These additional commitments will result in an increase in
    the proposed expansion capacity from 750,000 bpd to 890,000 bpd and
    increase the capital investment in the project from $4.1 billion to $5.4
    billion. The expansion will complete the twinning of the existing Trans
    Mountain pipeline system from Strathcona County, Alberta, to Burnaby,
    British Columbia. Trans Mountain expects to file a Facilities Application
    with the National Energy Board in late 2013, for authorization to build
    and operate the necessary facilities for the proposed expansion. The
    application will include the environmental, socio-economic, Aboriginal
    engagement, landowner and public consultation, and engineering components,
    and initiate a comprehensive regulatory and public review process. If
    approvals are received as planned, the expansion is expected to be
    operational in 2017.

Financings

  *KMP conducted a secondary offering in February which issued 4.6 million
    shares and raised approximately $385 million. The funds were used to repay
    commercial paper debt. KMP also issued $1 billion in senior notes in
    February.

Kinder Morgan Management, LLC

Shareholders of KMR will also receive a $1.30 dividend ($5.20 annualized)
payable on May 15, 2013, to shareholders of record as of April 29, 2013. The
dividend to KMR shareholders will be paid in the form of additional KMR
shares. The dividend is calculated by dividing the cash distribution to KMP
unitholders by KMR’s average closing price for the 10 trading days prior to
KMR’s ex-dividend date.

Kinder Morgan Energy Partners, L.P. (NYSE: KMP) is a leading pipeline
transportation and energy storage company and one of the largest publicly
traded pipeline limited partnerships in America. It owns an interest in or
operates approximately 44,000 miles of pipelines and 180 terminals. The
general partner of KMP is owned by Kinder Morgan, Inc. (NYSE: KMI). Kinder
Morgan is the largest midstream and the third largest energy company in North
America with a combined enterprise value of approximately $110 billion. It
owns an interest in or operates approximately 73,000 miles of pipelines and
180 terminals. Its pipelines transport natural gas, gasoline, crude oil, CO[2]
and other products, and its terminals store petroleum products and chemicals
and handle such products as ethanol, coal, petroleum coke and steel. KMI owns
the general partner interest of KMP and El Paso Pipeline Partners, L.P. (NYSE:
EPB), along with limited partner interests in KMP and EPB and shares in Kinder
Morgan Management, LLC (NYSE: KMR). For more information please visit
www.kindermorgan.com.

Please join Kinder Morgan at 4:30 p.m. Eastern Time on Wednesday, April 17, at
www.kindermorgan.com for a LIVE webcast conference call on the company’s first
quarter earnings.

The non-generally accepted accounting principles, or non-GAAP, financial
measures of distributable cash flow before certain items, both in the
aggregate and per unit, and segment earnings before depreciation, depletion,
amortization and amortization of excess cost of equity investments, or DD&A,
and certain items, are presented in this news release.

Distributable cash flow before certain items is a significant metric used by
us and by external users of our financial statements, such as investors,
research analysts, commercial banks and others, to compare basic cash flows
generated by us to the cash distributions we expect to pay our unitholders on
an ongoing basis. Management uses this metric to evaluate our overall
performance. It also allows management to simply calculate the coverage ratio
of estimated ongoing cash flows to expected cash distributions. Distributable
cash flow before certain items is also an important non-GAAP financial measure
for our unitholders because it serves as an indicator of our success in
providing a cash return on investment. This financial measure indicates to
investors whether or not we are generating cash flow at a level that can
sustain or support an increase in the quarterly distributions we are paying
pursuant to our partnership agreement. Our partnership agreement requires us
to distribute all available cash. Distributable cash flow before certain items
and similar measures used by other publicly traded partnerships are also
quantitative measures used in the investment community because the value of a
unit of such an entity is generally determined by the unit’s yield (which in
turn is based on the amount of cash  distributions the entity pays to a
unitholder). The economic substance behind our use of distributable cash flow
before certain items is to measure and estimate the ability of our assets to
generate cash flows sufficient to make distributions to our investors.

We define distributable cash flow before certain items to be limited partners’
pretax income before certain items and DD&A, less cash taxes paid and
sustaining capital expenditures for KMP, plus DD&A less sustaining capital
expenditures for our equity method investees (consisting of Rockies Express
through Oct. 31, 2012, Midcontinent Express, Fayetteville Express, KinderHawk
through June 30, 2011, EagleHawk, Eagle Ford, El Paso Natural Gas through Feb.
28, 2013, Bear Creek Storage Company, Red Cedar, Cypress and EP Midstream
Investment Co., LLC through Feb. 28, 2013), less equity earnings plus cash
distributions received for Express and Endeavor (additional equity investees).

Distributable cash flow before certain items per unit is distributable cash
flow before certain items divided by average outstanding units. “Certain
items” are items that are required by GAAP to be reflected in net income, but
typically either (1) do not have a cash impact, for example, goodwill
impairments, allocated compensation for which we will never be responsible,
and results from assets prior to our ownership that are required to be
reflected in our results due to accounting rules regarding entities under
common control, or (2) by their nature are separately identifiable from our
normal business operations and in our view are likely to occur only
sporadically, for example legal settlements, hurricane impacts and casualty
losses. Management uses this measure and believes it is important to users of
our financial statements because it believes the measure more effectively
reflects our business’ ongoing cash generation capacity than a similar measure
with the certain items included.

For similar reasons, management uses segment earnings before DD&A and certain
items in its analysis of segment performance and management of our business.
We believe segment earnings before DD&A and certain items is a significant
performance metric because it enables us and external users of our financial
statements to better understand the ability of our segments to generate cash
on an ongoing basis. We believe it is useful to investors because it is a
measure that management believes is important and that our chief operating
decision makers use for purposes of making decisions about allocating
resources to our segments and assessing the segments’ respective performance.

We believe the GAAP measure most directly comparable to distributable cash
flow before certain items is net income. Our calculation of distributable cash
flow before certain items, which begins with net income after subtracting
certain items that are specifically identified in the accompanying tables, is
set forth in those tables. Net income before certain items is presented
primarily because we use it in this calculation. Segment earnings before DD&A
as presented in our GAAP financials is the measure most directly comparable to
segment earnings before DD&A and certain items. Segment earnings before DD&A
and certain items is calculated by removing the certain items attributable to
a segment, which are specifically identified in the footnotes to the
accompanying tables, from segment earnings before DD&A. In addition, segment
earnings before DD&A as presented in our GAAP financials is included on the
first page of the tables presenting our financial results.

Our non-GAAP measures described above should not be considered as an
alternative to GAAP net income, segment earnings before DD&A or any other GAAP
measure. Distributable cash flow before certain items and segment earnings
before DD&A and certain items are not financial measures in accordance with
GAAP and have important limitations as analytical tools. You should not
consider either of these non-GAAP measures in isolation or as a substitute for
an analysis of our results as reported under GAAP. Because distributable cash
flow before certain items excludes some but not all items that affect net
income and because distributable cash flow measures are defined differently by
different companies in our industry, our distributable cash flow before
certain items may not be comparable to distributable cash flow measures of
other companies. Segment earnings before DD&A and certain items has similar
limitations. Management compensates for the limitations of these non-GAAP
measures by reviewing our comparable GAAP measures, understanding the
differences between the measures and taking this information into account in
its analysis and its decision making processes.

This news release includes forward-looking statements. These forward-looking
statements are subject to risks and uncertainties and are based on the beliefs
and assumptions of management, based on information currently available to
them. Although Kinder Morgan believes that these forward-looking statements
are based on reasonable assumptions, it can give no assurance that such
assumptions will materialize. Important factors that could cause actual
results to differ materially from those in the forward-looking statements
herein include those enumerated in Kinder Morgan’s reports filed with the
Securities and Exchange Commission. Forward-looking statements speak only as
of the date they were made, and except to the extent required by law, Kinder
Morgan undertakes no obligation to update or review any forward-looking
statement because of new information, future events or other factors. Because
of these uncertainties, readers should not place undue reliance on these
forward-looking statements.

                                                               
Kinder Morgan Energy Partners, L.P. and Subsidiaries
Preliminary Consolidated Statement of Income
(Unaudited)
(in millions except per unit amounts)
                                                                     
                                                  Three Months Ended March 31,
                                                 2013               2012
                                                                     
Revenues                                          $  2,661          $ 1,848 
                                                                     
Costs, expenses and other
Operating expenses                                   1,341             886
Depreciation, depletion and amortization             328               239
General and administrative                           134               107
Taxes, other than income taxes                       74                50
Other expense (income)                              -               -     
                                                    1,877           1,282 
Operating income                                     784               566
                                                                     
Other income (expense)
Earnings from equity investments                     83                65
Amortization of excess cost of equity                (2     )          (2    )
investments
Interest, net                                        (199   )          (135  )
Gain on sale of investments in Express               225               -
Other, net                                          4               1     
                                                                     
Income before income taxes                           895               495
                                                                     
Income taxes                                        (101   )         (15   )
                                                                     
Income from continuing operations                    794               480
                                                                     
Income from discontinued operations                  -                 50
Loss on remeasurement of discontinued               (2     )         (322  )
operations to fair value
(Loss) income from discontinued operations           (2     )          (272  )
                                                                     
Net income                                          792             208   
                                                                     
Net income attributable to Noncontrolling           (9     )         (2    )
Interests
                                                                     
Net income attributable to KMP                    $  783            $ 206   
                                                                     
                                                                     
Calculation of Limited Partners' interest in
net income (loss) attributable to KMP
Income from continuing operations                 $  785             $ 475
attributable to KMP
Less: Pre-acquisition earnings and severance         (17    )          -
allocated to General Partner
Less: General Partner's remaining interest          (402   )         (321  )
Limited Partners' interest                           366               154
Add: Limited Partners' interest in                  (2     )         (266  )
discontinued operations
Limited Partners' interest in net income          $  364            $ (112  )
                                                                     
Limited Partners' net income (loss) per unit:
Income from continuing operations                 $  0.97            $ 0.46
Income (loss) from discontinued operations          -               (0.79 )
Net income (loss)                                 $  0.97           $ (0.33 )
Weighted average units outstanding                  376             338   
                                                                     
Declared distribution / unit                      $  1.30           $ 1.20  
                                                                     
                                                                     
                                                  Three Months Ended March 31,
                                                  2013               2012
Segment earnings before DD&A and amortization
of excess investments
Natural Gas Pipelines                             $  557             $ 222
CO[2]                                                342               334
Products Pipelines                                   185               176
Terminals                                            186               187
Kinder Morgan Canada                                193             50    
                                                  $  1,463          $ 969   

                                                             
Kinder Morgan Energy Partners, L.P. and Subsidiaries

Preliminary Earnings Contribution by Business Segment
(Unaudited)
(in millions except per unit amounts)
                                                                  
                                                  Three Months Ended March 31,
                                                  2013            2012
Segment earnings before DD&A and amort. of
excess investments (1)
Natural Gas Pipelines (2)                         $  497          $  279
CO[2]                                                340             337
Products Pipelines                                   200             176
Terminals                                            187             187
Kinder Morgan Canada                                52            50     
Total                                               1,276         1,029  
                                                                  
Segment DD&A and amortization of excess
investments
Natural Gas Pipelines (3)                         $  97           $  50
CO[2]                                                116             104
Products Pipelines                                   33              29
Terminals                                            51              51
Kinder Morgan Canada                                14            14     
Total                                               311           248    
                                                                  
Segment earnings contribution
Natural Gas Pipelines (1) (3)                     $  400          $  229
CO[2 ](1)                                            224             233
Products Pipelines (1)                               167             147
Terminals (1)                                        136             136
Kinder Morgan Canada (1)                             38              36
General and administrative (1) (4)                   (123   )        (108   )
Interest, net (1) (5)                               (187   )       (139   )
Net income before certain items                      655             534
Certain items
Loss on disposal and remeasurement of                (2     )        (322   )
discontinued operations to fair value
Acquisition costs (6)                                (4     )        -
Legal and environmental reserves (7)                 (15    )        -
Pre-acquisition earnings allocated to General        19              -
Partner (8)
Mark to market and ineffectiveness of certain        2               (3     )
hedges (9)
Insurance deductible, casualty losses and            (2     )        -
reimbursements (10)
Gain (loss) on sale of assets, net of income         141             -
tax expense
Severance (11)                                       (2     )        -
Other (12)                                          -             (1     )
Sub-total certain items                              137             (326   )
Net income                                        $  792         $  208    
Less: Pre-acquisition earnings and severance         (17    )        -
allocated to General Partner
Less: General Partner's remaining interest in        (402   )        (318   )
net income (13)
Less: Noncontrolling Interests in net income        (9     )       (2     )
Limited Partners' net income (loss)               $  364         $  (112   )
                                                                  
Net income before certain items                   $  655          $  534
Less: Noncontrolling Interest before certain        (7     )       (6     )
items
Net income attributable to KMP before certain        648             528
items
Less: General Partner's interest in net             (401   )       (321   )
income before certain items (13)
Limited Partners' net income before certain          247             207
items
Depreciation, depletion and amortization (14)        338             290
Book (cash) taxes - net                              12              9
Express & Endeavor contribution                      1               -
Sustaining capital expenditures (15)                (48    )       (44    )
DCF before certain items                          $  550         $  462    
                                                                  
Net income / unit before certain items            $  0.66        $  0.61   
DCF / unit before certain items                   $  1.46        $  1.37   
Weighted average units outstanding                  376           338    


Notes ($ million)
(1)   Excludes certain items:
       1Q 2012 - CO2 $(3), general and administrative expense $(1).
       1Q 2013 - Natural Gas Pipelines $60, CO2 $2, Products Pipelines $(15),
       Terminals $(1), Kinder Morgan Canada $141, general and administrative
       expense $(14), interest $(15).
       The Natural Gas Pipelines certain items in 1Q 2013 primarily relate to
       income from our drop down asset group that we exclude in our DCF
       calculation for periods prior to our acquisition date of March 1, 2013.
(2)    Includes $57 in 1Q 2012 related to assets classified for GAAP purposes
       as discontinued operations.
(3)    Includes $7 in 1Q 2012 of DD&A expense related to assets classified for
       GAAP purposes as discontinued operations.
       Excludes $19 in 1Q 2013 of DD&A expense from our drop down asset group
       for periods prior to our acquisition date of March 1, 2013, which is
       included in certain items above.
       General and administrative expense includes income tax that is not
       allocable to the segments: 1Q 2012 - $2, 1Q 2013 - $3. Excludes $9 in
(4)    1Q 2013 of G&A expense from our drop down asset group for periods prior
       to our acquisition date of March 1, 2013, which is included in certain
       items above.
       Interest expense excludes interest income that is allocable to the
       segments: 1Q 2012 - $4, 1Q 2013 - $3. Excludes $15 in 1Q 2013 of
(5)    interest expense from our drop down asset group for periods prior to
       our acquisition date of March 1, 2013, which is included in certain
       items above.
(6)    Acquisition expense items related to closed acquisitions which would
       have been capitalized under prior accounting standards.
(7)    Legal reserve adjustments related to the rate case and other litigation
       and environmental matters of west coast Products Pipelines.
(8)    Earnings from our drop down asset group for periods prior to our
       acquisition date of March 1, 2013.
(9)    Actual gain or loss will continue to be taken into account in earnings
       before DD&A at time of physical transaction.
(10)   Insurance deductible, write-off of assets, expenses and insurance
       reimbursements related to casualty losses.
(11)   Drop-down asset group severance expense allocated to the General
       Partner.
(12)   Overhead credit on certain items capex.
       General Partner's interest in net income reflects a reduction for the
(13)   KinderHawk acquisition GP incentive giveback of $6 in 1Q 2012, and $4
       in 1Q 2013.
       Includes Kinder Morgan Energy Partner's (KMP) share of Rockies Express
(14)   (REX) (prior to Nov. 2012), Midcontinent Express (MEP), Fayetteville
       Express (FEP), Cypress,
       EagleHawk, Eagle Ford, Midstream, Red Cedar, EPNG, and Bear Creek DD&A:
       1Q 2012 - $42 and 1Q 2013 - $27.
       Includes KMP share of REX, MEP, FEP, Cypress, EagleHawk, Eagle Ford,
(15)   Red Cedar, Midstream, EPNG, and Bear Creek sustaining capital
       expenditures: 1Q 2012 - $2 and 1Q 2013 - $0.

                                                               
Volume Highlights
(historical pro forma for acquired assets)
                                                                   
                                                  Three Months Ended March 31,
                                                  2013             2012
Natural Gas Pipelines (1) (2)
Transport Volumes (Bcf)                              1,536.6         1,436.4
Sales Volumes (Bcf)                                  212.1           212.8
                                                                   
CO[2]
Southwest Colorado Production - Gross (Bcf/d)        1.2             1.2
(3)
Southwest Colorado Production - Net (Bcf/d)          0.5             0.5
(3)
Sacroc Oil Production - Gross (MBbl/d) (4)           30.7            26.9
Sacroc Oil Production - Net (MBbl/d) (5)             25.6            22.4
Yates Oil Production - Gross (MBbl/d) (4)            20.5            21.2
Yates Oil Production - Net (MBbl/d) (5)              9.1             9.4
Katz Oil Production - Gross (MBbl/d) (4)             2.1             1.5
Katz Oil Production - Net (MBbl/d) (5)               1.7             1.3
NGL Sales Volumes (MBbl/d) (6)                       10.3            9.0
Realized Weighted Average Oil Price per Bbl       $  86.85         $ 90.63
(7) (8)
Realized Weighted Average NGL Price per Bbl       $  46.48         $ 61.36
(8)
                                                                   
Products Pipelines
Pacific, Calnev, and CFPL (MMBbl)
Gasoline (9)                                         62.2            64.2
Diesel                                               24.3            24.5
Jet Fuel                                            20.5          20.8    
Sub-Total Refined Product Volumes - excl.            107.0           109.5
Plantation
Plantation (MMBbl)
Gasoline                                             35.6            30.9
Diesel                                               8.5             9.1
Jet Fuel                                            6.7           6.1     
Sub-Total Refined Product Volumes -                  50.8            46.1
Plantation
Total (MMBbl)
Gasoline (9)                                         97.8            95.1
Diesel                                               32.8            33.6
Jet Fuel                                            27.2          26.9    
Total Refined Product Volumes                        157.8           155.6
NGLs (10)                                            9.8             7.4
Condensate (11)                                     2.0           -       
Total Delivery Volumes (MMBbl)                       169.6           163.0
Ethanol (MMBbl) (12)                                 8.7             7.3
                                                                   
Terminals
Liquids Leasable Capacity (MMBbl)                    60.7            59.8
Liquids Utilization %                                95.4     %      95.7    %
Bulk Transload Tonnage (MMtons) (13)                 22.2            25.0
Ethanol (MMBbl)                                      15.2            17.9
                                                                   
Trans Mountain (MMBbls - mainline throughput)        26.7            24.9

                                               
      Includes Texas Intrastates, KMNTP,            Hedge gains/losses for Oil
(1)   Monterrey, TransColorado, MEP,         (8)    and NGLs are included with
      KMLA, FEP, TGP, and EPNG pipeline             Crude Oil.
      volumes.
(2)   Volumes for acquired pipelines are     (9)    Gasoline volumes include
      included for all periods.                     ethanol pipeline volumes.
(3)   Includes McElmo Dome and Doe           (10)   Includes Cochin and
      Canyon sales volumes.                         Cypress.
(4)   Represents 100% production from        (11)   Includes KMCC.
      the field.
                                                    Total ethanol handled
(5)   Represents KMP's net share of the      (12)   including pipeline volumes
      production from the field.                    included in gasoline
                                                    volumes above.
(6)   Net to KMP.                            (13)   Includes KMP's share of
                                                    Joint Venture tonnage.
(7)   Includes all KMP crude oil
      properties.

                                                       
KINDER MORGAN ENERGY PARTNERS, L.P. AND SUBSIDIARIES
PRELIMINARY ABBREVIATED CONSOLIDATED BALANCE SHEET
(Unaudited)
(in millions)
                                                                          
                                              March 31,      December 31,
                                              2013           2012 ^(1)
ASSETS
                                                                          
Cash and cash equivalents                     $ 736          $  529
Other current assets                            1,626           1,848
Property, plant and equipment, net              22,584          22,330
Investments                                     1,880           1,864
Goodwill, deferred charges and other           8,326         8,405   
assets
TOTAL ASSETS                                  $ 35,152      $  34,976  
                                                                          
LIABILITIES AND PARTNERS' CAPITAL
                                                                          
Liabilities
Notes payable and current maturities of       $ 1,127        $  1,155
long-term debt
Other current liabilities                       2,067           2,092
Long-term debt                                  16,829          15,907
Debt fair value adjustments                     1,586           1,698
Other                                          1,309         1,362   
Total liabilities                               22,918          22,214
                                                                          
Partners' capital
Accumulated other comprehensive income          79              168
Other partners' capital                        11,834        12,327  
Total KMP partners' capital                    11,913        12,495  
Noncontrolling interests                       321           267     
Total partners' capital                        12,234        12,762  
TOTAL LIABILITIES AND PARTNERS' CAPITAL       $ 35,152      $  34,976  
                                                                          
                                                                          
Total Debt, net of cash and cash
equivalents, and excluding
the debt fair value adjustments               $ 17,220       $  16,533
                                                                          
Segment earnings before DD&A and              $ 4,793        $  4,560
certain items
G&A                                             (447   )        (432    )
Income taxes                                   42            40      
EBITDA ^(2)(3)                                $ 4,388        $  4,168
                                                                          
Debt to EBITDA                                  3.9             4.0       ^(4)

    
(1)   December 2012 balance sheet recast to reflect the transfer of assets
      among entities under common control.
(2)   EBITDA includes add back of KMP's share of REX, MEP, FEP, Cypress,
      EagleHawk, Eagle Ford, Red Cedar, Midstream, EPNG and Bear Creek DD&A.
(3)   EBITDA is last twelve months.
(4)   Actual December 2012 Debt to EBITDA as reported prior to the recast of
      assets under common control was 3.7X.

Contact:

Kinder Morgan Energy Partners, L.P.
Larry Pierce, (713) 369-9407
Media Relations
larry_pierce@kindermorgan.com
or
Investor Relations
(713) 369-9490
km_ir@kindermorgan.com
www.kindermorgan.com
 
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