CALGARY, ALBERTA–(CCNMatthews – March 5, 2007) – Inter Pipeline Fund (Inter Pipeline) (TSX:IPL.UN) announced today that it has entered into an agreement to acquire the Corridor Pipeline System (Corridor) from an affiliate of Kinder Morgan Inc. Corridor is the sole transporter of diluted bitumen and related products produced by the Athabasca Oil Sands Project (AOSP). Owned by Shell Canada Energy (Shell Canada), Chevron Canada Limited (Chevron) and Western Oil Sands L.P. (Western), AOSP is a major oil sands mining and bitumen upgrading operation based in Alberta. Corridor provides the transportation link between AOSP’s Muskeg River bitumen mining operation near Fort McMurray, Alberta and its Scotford upgrading facility near Edmonton, Alberta. The transaction will involve the purchase of all outstanding share capital of Terasen Pipelines (Corridor) Inc., an indirect, wholly owned subsidiary of Kinder Morgan Inc., for consideration of Cdn $760 million subject to closing adjustments. Funding for the acquisition will be provided from Inter Pipeline’s existing bank credit facilities and the assumption of approximately $485 million of existing debt held within Terasen Pipelines (Corridor) Inc. As a result of the acquisition, Inter Pipeline will also assume responsibility for the completion of an estimated $1.8 billion expansion of Corridor. This project, which currently is under construction, will allow diluted bitumen capacity on the Corridor system to increase from its current capacity of 280,000 barrels per day to approximately 465,000 barrels per day. The expansion of the Corridor system has been requested by shippers to accommodate planned increases in AOSP production volume. Construction activity includes the installation of a new 42-inch diameter pipeline to transport diluted bitumen between AOSP’s Muskeg River mine and the Scotford upgrader. Inter Pipeline expects that expansion capacity on the Corridor system will be in service in 2010. At closing, Inter Pipeline will assume approximately $300 million in additional debt associated with construction in progress. The Corridor acquisition is subject to certain closing conditions including the waiver or expiry of certain rights of first refusal. Assuming such rights of first refusal are waived or not exercised, it is anticipated that closing will take place on or about April 20, 2007. Transaction Highlights "This acquisition is highly consistent with Inter Pipeline’s strategy to own and operate world-scale energy infrastructure assets with strong development potential", commented David Fesyk, President and Chief Executive Officer of Inter Pipeline. "Upon completion of this transaction, Inter Pipeline will become the largest oil sands gathering business in Canada." Key investment highlights related to the Corridor acquisition are described below: – produces highly stable and predictable cash flow through a long term ship-or-pay contract – 80% of cash flow is supported by payments from investment grade shippers – annual revenue requirement includes the recovery of operating costs, rate base depreciation, debt financing costs, taxes and provides a return on equity – provides transportation service to a prolific oil sands region estimated to contain over 10 billion barrels of bitumen in place – strong organic development potential including the current Corridor expansion project and future expansion opportunities – significantly increases cash available for distribution to Inter Pipeline’s unitholders following completion of the current expansion project – after completion of the $1.8 billion expansion, the majority of Inter Pipeline’s EBITDA will be generated from high quality oil sands transportation contracts with no commodity price exposure – materially mitigates the impact of proposed new tax legislation on Inter Pipeline’s cash available for distribution to unitholders, as outlined in the Federal government’s Tax Fairness Plan Inter Pipeline also owns an 85% interest in, and is operator of, the Cold Lake oil sands pipeline system in east central Alberta. The Cold Lake system currently transports approximately 330,000 barrels per day of blended bitumen under long term shipping contracts with Imperial Oil, EnCana and Canadian Natural Resources. Upon completion of this acquisition, Inter Pipeline will transport approximately 50% of Canada’s oil sands production. Overview of the Corridor Pipeline System Corridor, which commenced commercial operations in May 2003, is comprised of approximately 1,000 kilometres of pipeline and over 2 million barrels of storage. The system has two primary components: the Diluted Bitumen (DilBit) System and the Upgrader System. The DilBit System transports diluted bitumen production from the Muskeg River mine to the Scotford upgrader via a 24-inch diameter pipeline. Operating in parallel is a 12-inch diameter diluent pipeline which returns diluent from the Scotford upgrading facility back to the mine site for reuse as blending material to dilute bitumen. The Upgrader System consists of two parallel pipelines operating between the Scotford upgrader and third party pipeline terminals in Edmonton. A 20-inch diameter pipeline transports synthetic crude oil and other products from the Scotford upgrader to the Edmonton market hub. A 16-inch pipeline transports supplemental bitumen feedstock to the Scotford upgrader for processing. For additional asset information, click on the following link: http://www.ccnmatthews.com/docs/305IPL_map.pdf. Shell, Chevron and Western (collectively the "Shippers") are contractually obligated to utilize Corridor for the transportation of all bitumen and diluent used or produced at the Muskeg River mine. Additionally, the Shippers have agreed to transport on Corridor all pipelined products resulting from the future expansion of the AOSP to include mine sites not in production today, subject to certain conditions. High Quality Cash Flow Cash flow on Corridor is derived from a long-term ship-or-pay contract with Shell Canada, Chevron and Western. The Shippers are bound under the terms of a Firm Service Agreement ("FSA") which includes an initial contract term of 25 years, extending through 2028 with options for further extensions. The FSA is based on traditional cost-of-service principles and ensures the recovery of all operating costs, depreciation, taxes, debt financing costs, and provides a structured return on the equity component of Corridor’s rate base. Corridor’s cash flow is not dependent on volume throughput or impacted by commodity prices. Individual shipper commitments under the FSA are proportional to their ownership interest in the AOSP. Specifically, Shell Canada assumes 60% of the commitments with Chevron and Western assuming 20% each. Chevron’s obligations are guaranteed by its parent, Chevron Corporation. As a result, 80% of Shipper commitments under the FSA are secured by large, integrated energy companies with very high credit quality. Corridor Capacity Expansion Project Shell Canada, Chevron and Western have recently commenced a major expansion of AOSP, which will add approximately 100,000 barrels per day of incremental bitumen production with operations commencing in 2010. This expansion will increase bitumen production capacity to approximately 270,000 barrels per day. Through the future development of oil sands leases in the Athabasca region, Shell Canada plans to increase mineable bitumen production to approximately 770,000 barrels per day. In response to AOSP’s growth plans, and at the request of the Shippers, Corridor has commenced construction of a new 42-inch diameter pipeline between the Muskeg River mine and the Scotford upgrader near Edmonton. The new 42-inch diameter pipeline will transport a blend of oil sands bitumen and diluent to the Scotford upgrader. Subsequent processing of diluted bitumen at the upgrader will allow the recovery of diluent from the blended stream. Recovered diluent, a very light petroleum product, will then be returned via Corridor’s existing 24-inch diameter pipeline back to the Muskeg River mine where it will be reused. Expansion work on the Corridor system, including the new 42-inch diameter pipeline, pumping stations and related modifications, are estimated to cost $1.8 billion. Upon completion in 2010, the current expansion will increase Corridor’s diluted bitumen capacity by approximately 185,000 barrels per day to 465,000 barrels per day. The expanded system will be governed by the terms of the FSA and operate under the same cost-of-service principles as the existing pipeline system. Future Growth Opportunities Inter Pipeline anticipates that future growth opportunities will include capital additions to Corridor’s rate base in support of AOSP’s expansion plans and strong potential to attract third party volume to the system. For example, the new 42-inch diameter pipeline can be cost effectively expanded to an ultimate diluted bitumen capacity of approximately 1.4 million barrels per day through the installation of additional pumping stations. In cases where excess pipeline capacity exist, that capacity may be marketed to third party shippers, subject to certain rights and approvals of the existing Shippers including the sharing of additional revenues under certain circumstances. Strong Financial Performance In 2006, Corridor generated EBITDA of $50.8 million. Over the two year period of 2004 and 2005, Corridor generated average annual EBITDA of $47.0 million. Prior to completion of the expansion, the Corridor acquisition is expected to provide approximately 4% accretion to Inter Pipeline’s cash available for distribution. In the first full year following completion of the current capacity expansion project, Inter Pipeline expects that Corridor’s EBITDA will increase to approximately $200 million. As a result, the Corridor acquisition will provide approximately 25% accretion to cash available for distribution, post expansion, on a per unit basis. Surplus cash flow will afford Inter Pipeline increased flexibility to reduce outstanding debt, and/or increase cash distributions to unitholders. The timing of higher cash flow from the current Corridor expansion project is also well-matched to the period when publicly-traded flow-through entities such as Inter Pipeline would become taxable under the Federal government’s proposed Tax Fairness Plan. If currently proposed legislation is passed, publicly-traded flow- through entities including limited partnerships would become taxable at the beginning of 2011. Acquisition and Expansion Funding To fund the $760 million acquisition, Inter Pipeline will utilize approximately $275 million of its existing credit facility and assume approximately $485 million of outstanding debt held within Terasen Pipelines (Corridor) Inc. In order to provide future financial flexibility Inter Pipeline has recently increased the amount of its existing bank credit facility to $750 million. Inter Pipeline will also assume approximately $300 million of expansion related debt. Both the expansion debt and the assumed debt upon acquisition will be non-recourse to Inter Pipeline. Post acquisition, Inter Pipeline’s debt to total capitalization will be approximately 51%, after non-recourse adjustments. The construction of the Corridor expansion is expected to be 100% debt financed through a $1.8 billion unsecured, syndicated bank credit facility. Of this total, approximately $450 million will be recourse to Inter Pipeline, with the remaining $1.35 billion being non-recourse. Prior to commissioning of the expansion, it is intended that the recourse amount will be repaid from proceeds from future Inter Pipeline capital markets issuances of roughly the same amount. Inter Pipeline anticipates that the remaining $1.35 billion of the construction facility will be refinanced after completion of the expansion with a combination of floating and fixed rate debt.