We may incur significant costs and liabilities resulting from implementing and administering pipeline
integrity programs and related repairs.
Pursuant to the Pipeline Safety Improvement Act of 2002, the DOT has adopted regulations requiring
pipeline operators to develop integrity management programs for transportation pipelines located where a leak
or rupture could do the most harm in “high consequence areas.” The regulations require operators to:
• perform ongoing assessments of pipeline integrity;
• identify and characterize applicable threats to pipeline segments that could impact a high consequence
area;
• improve data collection, integration and analysis;
• repair and remediate the pipeline as necessary; and
• implement preventive and mitigating actions.
Although many of our natural gas facilities fall within a class that is not subject to these requirements, we
may incur significant costs and liabilities associated with repair, remediation, preventative or mitigation
measures associated with non-exempt pipelines. Such costs and liabilities might relate to repair, remediation,
preventative or mitigating actions that may be determined to be necessary as a result of the testing program, as
well as lost cash flows resulting from shutting down our pipelines during the pendency of such repairs.
Additionally, we may be affected by the testing, maintenance and repair of pipeline facilities downstream from
our own facilities. With the exception of our Wattenberg pipeline, our NGL pipelines are also subject to
integrity management and other safety regulations imposed by the Texas Railroad Commission, or TRRC.
We currently estimate that we will incur costs of up to $6.7 million between 2012 and 2016 to implement
pipeline integrity management program testing along certain segments of our natural gas and NGL pipelines.
This does not include the costs, if any, of any repair, remediation, preventative or mitigating actions that may be
determined to be necessary as a result of the testing program, which costs could be substantial.
We currently transport NGLs produced at our processing plants on our owned and third party NGL
pipelines. Accordingly, in the event that an owned or third party NGL pipeline becomes inoperable due to any
necessary repairs resulting from integrity testing program or for any other reason for any significant period of
time, we would need to transport NGLs by other means. There can be no assurance that we will be able to enter
into alternative transportation arrangements under comparable terms.
Any regulatory expansion of the existing pipeline safety requirements or the adoption of new pipeline
safety requirements could also increase our cost of operation and impair our ability to provide service during
the period in which assessments and repairs take place, adversely affecting our business.
Construction of new assets is subject to regulatory, environmental, political, legal, economic and other
risks that may adversely affect our financial results.
The construction of new midstream facilities or additions or modifications to our existing midstream asset
systems or propane terminals involves numerous regulatory, environmental, political and legal and economic
uncertainties beyond our control and may require the expenditure of significant amounts of capital. These
projects may not be completed on schedule or within budgeted cost, or at all. We may construct facilities to
capture anticipated future growth in production in a region in which such growth does not materialize. Since we
are not engaged in the exploration for and development of natural gas and oil reserves, we often do not have
access to third party estimates of potential reserves in an area prior to constructing facilities in such area. To the
extent we rely on estimates of future production in our decision to construct new systems or additions to our
systems, such estimates may prove to be inaccurate because there are numerous uncertainties inherent in
estimating quantities of future production. As a result, these facilities may not be able to attract enough
throughput to achieve our expected investment return, which could adversely affect our results of operations
and financial condition. The construction of new systems or additions to our existing gathering, transportation
and propane terminal assets may require us to obtain new rights-of-way prior to constructing these facilities.
We may be unable to obtain such rights-of-way to connect new natural gas supplies to our existing gathering
lines, expand our network of propane terminals, or capitalize on other attractive expansion opportunities. The
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