Looking Ahead

In 2010, KMP expects to pay cash distributions of $4.40 per unit, which would be a 4.8 percent increase over the 2009 distribution of $4.20 per unit.

We plan to continue to execute the same successful strategy that has made KMP one of the largest and leading midstream energy companies in North America. In a nutshell, we will continue to focus on owning and operating primarily fee-based assets that are core to the energy infrastructure of growing markets and that produce stable cash flow.

KMP is well positioned for the future. We completed construction of and placed into service three large natural gas pipelines last year—Rockies Express, Midcontinent Express and Kinder Morgan Louisiana. In 2010, we anticipate investing approximately $1.5 billion to further grow the company. Since KMP was formed in 1997, we have invested approximately $20 billion in new-build projects, expansions and acquisitions.

Our large footprint of assets provides us with opportunities to expand and grow more cost effectively than smaller companies, and we continue to stand poised and ready to capitalize on emerging trends in the industry. For example, we anticipate more natural gas (the cleanest burning fossil fuel) will be used in the future to meet energy demand and reduce carbon emissions. Our assets position us well to access, transport, store and treat more natural gas from various supply sources, including the emerging shale plays. Additionally, Renewable Fuels Standard mandates are increasing the amount of ethanol and biodiesel that is being used. In 2010, we expect to handle about 80 million barrels of ethanol, or about 25 to 30 percent of all the ethanol handled in the United States. We are also well positioned to capitalize on our extensive crude oil reserves in the Permian Basin in West Texas, and if CO2 sequestration becomes more feasible we have the expertise to play a major role in that arena.

While the markets are currently better than they were a year ago, we still face plenty of challenges in addition to these opportunities. Commodity prices are still volatile, the general economy remains unstable and we face continued regulatory uncertainty. With approximately 28,000 miles of pipelines and 180 terminals we also face an ongoing concern of operating our assets in a safe, compliant and environmentally sound manner. Every year we spend hundreds of millions of dollars on integrity management programs and maintenance, and I’m pleased to say that we continue to outperform the industry averages on environmental, health and safety measures. I invite you to visit www.kindermorgan.com to review KMP’s operational performance, our annual budget, investor presentations and more.

While the future is always unknown, I pledge that we will continue to do our best to operate our assets safely, satisfy our customers and deliver an attractive return to our limited partners. Thanks for your ongoing support. I still believe the best is yet to come!

Sincerely,

Richard D. Kinder Chairman and CEO Kinder Morgan Energy Partners

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