Tallgrass Energy Partners Announces Crude Oil Terminal Acquisitions and Commercial Developments at Pony Express

LEAWOOD, Kan.–(BUSINESS WIRE)–Tallgrass Energy Partners, LP (NYSE: TEP) today announced two strategic
acquisitions by its Tallgrass Terminals business and several significant
commercial developments that continue to expand the variety of services
offered by Pony Express in key crude oil producing basins it serves.

“Today’s announcements, along with last week’s news of the five-year
contract extension with Pony Express’ largest customer, continue to
solidify Pony Express’ track record as a reliable and diverse pipeline
and strengthens its ability to serve crude oil markets for decades to
come,” said David G. Dehaemers Jr., Tallgrass Energy President and Chief
Executive Officer. "With news of increasing crude oil production in
basins Pony Express serves, we’re even more confident that utilization
of our pipeline will continue to increase in the future.”

Tallgrass Terminals Strategic Acquisitions

Pawnee Terminal

Tallgrass Terminals, LLC (“Tallgrass Terminals”) has entered into an
agreement to acquire a 51 percent membership interest in the Pawnee,
Colo. crude oil terminal (“Pawnee Terminal”) from Zenith Energy for
approximately $31 million. The Pawnee Terminal is an injection point for
the Tallgrass Pony Express Northeast Colorado Lateral (“NECL”), with
300,000 barrels of storage and backed by minimum volume commitments of
approximately 90,000 barrels per day. The Pawnee Terminal will provide
commercial and operational synergies with Pony Express and offers the
potential for incremental sourcing opportunities such as directly
connecting nearby producers. Tallgrass Terminals expects the transaction
to close in Q1 2018, subject to certain closing conditions.

Deeprock Development Expansion

In addition, Tallgrass Terminals has acquired a 38 percent interest in
Deeprock North, LLC ("Deeprock North"), which owns a crude oil terminal
in North Cushing, Okla., immediately adjacent to the Deeprock
Development, LLC ("Deeprock Development") crude oil terminal facility.
The purchase price for the interest was $19.5 million or approximately
eight times current cash flow. Immediately following the acquisition,
Deeprock North was merged into Deeprock Development. After the
acquisition and merger, Deeprock Development now owns a larger and more
diverse terminalling complex with total storage capacity of 4.0 million
barrels. Tallgrass Terminals owns approximately 60 percent of the
combined entity and retains significant strategic and commercial
control. Tallgrass expects the acquisition to enhance and expand
Tallgrass Terminals’ commercial offerings for both Pony Express
customers and other customers in Cushing.

Pony Express Commercial Updates and Developments

Successful Platteville Extension Open Season

Pony Express recently concluded a successful binding open season to
secure committed shipper contracts for crude oil transportation of a new
common stream on the Platteville Extension. The open season resulted in
additional unaffiliated third-party commitments of 10,000 barrels per
day for a total of 37,500 barrels per day of short-haul and long-haul
binding transportation commitments. The 55-mile Platteville Extension is
approximately 60 percent complete and expected to begin operations in
April 2018, with the associated Grasslands Terminal expected to be in
service in Q4 2018. The initial capacity of the Platteville Extension
will be approximately 40,000 barrels per day, increasing to
approximately 80,000 barrels per day once the Grasslands Terminal is in
service.

Record Volume Throughput Expected in January 2018

In late December 2017, Pony Express shippers nominated more than 10
million barrels, or approximately 325,000 barrels per day for movements
in January 2018. If realized, this would constitute the largest per-day
average during a single month in Pony Express' history. Tallgrass
affiliates account for only about 5 percent of the nominated volumes.

January 2018 In-Service of Two New Refinery Connections Expected

Construction on the Holly Frontier El Dorado and CHS McPherson, Kan.
refinery connections is complete, with line fill and commercial service
expected in early January 2018 for both.

Once the two new refinery connections are in service, Pony Express
shippers will be able to deliver more than 300,000 barrels per day to
three significant refineries directly connected to Pony Express,
including the currently connected refinery in Ponca City, Okla.

New Supply Connection

As previously announced, Tallgrass Terminals has a signed, 10-year
take-or-pay agreement for 8,000 barrels per day from a new customer to
support the construction of a terminal in the Central Kansas Uplift.
Construction of the terminal is progressing on schedule, with completion
and in-service expected by March 2018. Upon completion, the terminalling
facilities will have delivery capabilities of approximately 20,000
barrels per day into the Pony Express mainline, providing the
opportunity to accommodate incremental volumes from the Central Kansas
Uplift.

Upon completion of these projects, Pony Express will have six
different supply sources and five different crude oil streams
capable of being batched on the system.

“We believe the execution of our organically developed commercial
projects by Pony Express and Tallgrass Terminals and the expansion of
Tallgrass Terminals’ complimentary service offerings through acquisition
continue to demonstrate that Pony Express is the most attractive,
diverse and capable crude oil transportation and logistics system in the
regions in which it operates,” said Matt Sheehy, Tallgrass Energy Chief
Commercial Officer. “Diversity of supply and delivery points, multiple
batch shipment capability, readily available expansion capacity and an
attractive tariff rate solidify Pony Express as a critical part of the
country’s crude oil midstream infrastructure.”

About Tallgrass Energy

Tallgrass Energy is a family of companies that includes publicly traded
partnerships Tallgrass Energy Partners, LP (NYSE: TEP) and Tallgrass
Energy GP, LP (NYSE: TEGP), and privately held Tallgrass Development,
LP. Operating across 10 states, Tallgrass is a growth-oriented midstream
energy operator with transportation, storage, terminal, water, gathering
and processing assets that serve some of the nation’s most prolific
crude oil and natural gas basins.

To learn more, please visit our website at www.tallgrassenergy.com.

Cautionary Note Concerning Forward-Looking
Statements

Disclosures in this press release contain forward-looking statements.
All statements, other than statements of historical facts, included in
this press release that address activities, events or developments that
management expects, believes or anticipates will or may occur in the
future are forward-looking statements. Without limiting the generality
of the foregoing, forward-looking statements contained in this press
release specifically include the level of future utilization of Pony
Express, whether the closing of the Pawnee Terminal transaction will
occur and, if it occurs, whether Pony Express will enjoy any commercial
or operational synergies or additional sourcing opportunities, whether
the Deeprock North acquisition and subsequent merger with Deeprock
Development will expand or enhance commercial offerings for Pony Express
customers or other customers in Cushing, whether the Platteville
Extension, the Grasslands Terminal facility, the connection to the CHS
McPherson, Kan., refinery, the connection to Holly Frontier's El Dorado
facility or the Central Kansas Uplift Terminal Facility will be
constructed on time, on budget, or at all and, if constructed, the
capacity of such projects and whether shippers nominating volumes to
Pony Express for January 2018 will actually deliver such volumes. Such
statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond the control of TEP, which may
cause actual results to differ materially from those implied or
expressed by the forward-looking statements, and other important factors
that could cause actual results to differ materially from those
projected, including those set forth in reports filed by TEP with the
Securities and Exchange Commission. Any forward-looking statement
applies only as of the date on which such statement is made and TEP does
not intend to correct or update any forward-looking statement, whether
as a result of new information, future events or otherwise, except as
required by law.

Contacts

Tallgrass Energy
Investor Relations
Nate Lien,
913-928-6012
[email protected]
or
Media
and Trade Inquiries
Phyllis Hammond, 303-763-3568
[email protected]