Hiland Announces New System Expansion Project and New Organic Growth Construction Project

Hiland Partners, LP today announced a new system expansion project with the signing of an agreement with a third-party producer to construct and operate natural gas gathering pipelines, compression and related facilities around its existing Kinta gathering system in eastern Oklahoma. With the signing of this agreement, the third-party producer has dedicated approximately 7,040 gross acres to the Partnership. The Partnership plans to make an initial capital investment of approximately $5.6 million by the end of 2008 and totaling up to $8.6 million over the next three years. The expected startup of the initial phase of the project is by the end of the third quarter of 2008.

Hiland Partners, LP today announced a new organic growth construction project with the signing of an agreement with a third-party producer to construct and operate natural gas gathering pipelines, compression and related facilities in the Anadarko Basin of western Oklahoma. With the signing of this agreement, the third-party producer has dedicated approximately 18,560 gross acres to the Partnership. The Partnership plans to make an initial capital investment of approximately $7.4 million by the end of 2008 and totaling up to $14.4 million over the next three years. The expected startup of the initial phase of the project is the end of the first quarter of 2009.

Hiland Partners, LP is a publicly traded midstream energy partnership engaged in purchasing, gathering, compressing, dehydrating, treating, processing and marketing of natural gas, and fractionating, or separating, and marketing of natural gas liquids, or NGLs. The Partnership also provides air compression and water injection services for use in oil and gas secondary recovery operations. The Partnership’s operations are primarily located in the Mid-Continent and Rocky Mountain regions of the United States. Hiland Partners, LP’s midstream assets consist of fourteen natural gas gathering systems with approximately 2,079 miles of gathering pipelines, five natural gas processing plants, seven natural gas treating facilities and three NGL fractionation facilities. The Partnership’s compression assets consist of two air compression facilities and a water injection plant.

Hiland Holdings GP, LP owns the two percent general partner interest, 2,321,471 common units and 3,060,000 subordinated units in Hiland Partners, LP, and the incentive distribution rights of Hiland Partners, LP.