Pipeline Projects

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Pipeline Projects

• October 24th, 2006
• Joey Purdy, Vice President Crude Oil Supply

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Refinery Details

• Cheyenne
• 52,000 BPD Crude Capacity
• Designed for Heavy Sour Crude feed stocks
• Pipeline feed point is Guernsey, WY
• El Dorado
• 110,000 BPD Crude Capacity (130,000 BPD in 2008)
• Designed for Medium Sour feed stocks
• Pipeline feed point is Cushing, OK

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New Guernsey to Cheyenne Pipeline

• Suncor system from Guernsey to Cheyenne has been
  seasonally full for years.
• Pipeline limitations forced a diet of trucked
  crudes (incrementally DJ Condensate and Nebraska
  Sweet) to keep refinery full.
• Explored concept of expanding capacity .
• Ultimately signed contract with Rocky Mountain
  Pipeline to construct a new line.
• 10 yr. commitment to ship
• 50MM project
• March 31st, 2006 Contract, June 1st, 2007
  Startup (14 Months!)
• 16, 2 pump station
• 50,000 BPD (350 CST) startup capacity
  (Expandable)

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Frontiers Gasoil Opportunity

• Frontier currently rails/trucks 2,000 BPD of
  gasoil to El Dorado, KS
• Volume will be higher due to a Coker expansion
  which will be complete in 2007.
• Future transportation costs, 10,000,000/yr, can
  base load a pipeline from Cheyenne to El Dorado

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New Pipeline from Cheyenne to El Dorado

• 500 miles, Capital Cost 300MM
• Resulting annual payment (tariff) for capital
  recovery alone is 40-45MM.
• Startup 24 months from signed contract
• 30,000 BPD capacity on low viscosity crude
• Frontier will make 20 year commitment to the
  pipeline company in order to lower their risk and
  the resulting tariff.
• To open the line, Frontier must sign supply
  agreements to lock in acceptable differentials
  for a period of time (5 years) after the
  pipeline is in service.
• Differentials will be set off WTI or WTS,
  depending on crude type.
• Targeting 20,000 BPD.
• Producer/supplier can deliver volumes to Frontier
  at Guernsey, Cheyenne, or possibly in the D.J.
  Basin.

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Timeline

• Expect pipeline final estimate, timeline, and
  contract ready by January 2007.
• In early November, will begin more formal
  negotiations with interested suppliers.
• Will initially concentrate on larger, 5,000 BPD
  producers.
• In December, will open up to any interested
  parties
• If sufficient supply contracts are not obtained ,
  Frontier will not proceed with the pipeline
  contract.