DRIP Q & A

If you are an eligible holder ("Unitholder") of Class A limited partnership units ("Units") of Inter Pipeline as described in the Plan, the Plan provides an opportunity for you to receive, by reinvesting your cash distribution, either:

• additional Units at a discounted subscription price equal to 95% of the Average Market Price (as defined in the Plan), which will be issuable pursuant to the "Distribution Reinvestment Component" of the Plan; or
• a premium cash payment (the "Premium Distribution™") equal to 102% of the amount of the cash distribution payable in respect of such Units, which will be made pursuant to the "Premium Distribution™ Component" of the Plan,

in either case upon and subject to the terms and conditions of the Plan.

You are not required to participate in the Plan. If you do not elect to participate, then you will continue to receive your regular, declared cash distributions in the normal manner.

Participation in either the Premium Distribution™ Component or the Distribution Reinvestment Component involves the reinvestment of your cash distribution in new Units purchased on your behalf from Inter Pipeline.

If you are validly enrolled in the Premium Distribution™ Component, either directly or indirectly through the broker, investment dealer, financial institution or other nominee through which you hold your Units ("your broker"), new Units acquired on your behalf will be exchanged with the Plan Broker (currently Canaccord Capital Corporation) for the Premium Distribution™. The Premium Distribution™ will in turn be remitted to you by the Plan Agent (currently Computershare Trust Company of Canada) directly or through your broker, as applicable. If you are validly enrolled in the Distribution Reinvestment Component, new Units acquired on your behalf will be credited to your account under the Plan or, if you are enrolled through your broker, with your broker.

The amount of the Premium Distribution™ or the number of additional Units that may be acquired under the Plan is subject to proration in certain events, as more particularly described in the Plan. See also Question #9 below.

The Distribution Reinvestment Component provides a convenient and cost-effective way for you to increase your investment in Inter Pipeline, without incurring commissions, service charges or brokerage fees in connection with the purchase of new Units from treasury, with new Units purchased at a 5% discount to the Average Market Price and full investment of reinvested funds is possible since fractions of Units (to four decimal places) can be credited to accounts maintained under the Plan.

The Premium Distribution™ Component provides a means by which you can, in effect, increase your cash receipts by 2%.

The partnership agreement which governs Inter Pipeline provides that no Units may be owned by or transferred to, among other things, a person who, for purposes of the Income Tax Act (Canada), is a "non-resident" of Canada, a person in which an interest would be a "tax shelter investment" or a partnership that is not a "Canadian partnership". Accordingly, no such person may be a Unitholder or therefore participate in either the Distribution Reinvestment Component or the Premium Distribution™ Component.

Inter Pipeline and the Plan Agent also reserve the right to deny or cancel participation in the Plan in certain extraordinary circumstances described in the Plan. See "Eligibility Requirements" in the Plan.

Only registered Unitholders may directly enroll in the Plan. Beneficial owners of Units may, however, indirectly participate in the Plan through their broker. See "Enrollment" in the Plan.

If you are an eligible Unitholder with Units registered in your own name you may directly enroll in either the Distribution Reinvestment Component or the Premium Distribution™ Component by delivering to the Plan Agent a duly completed Enrollment Form. A copy of the Enrollment Form is available from the Plan Agent's website at www.computershare.com or by calling the Plan Agent at 1-800-564-6253. An Enrollment Form must be received by 5:00 p.m. (Toronto time) on the fifth (5th) business day preceding a distribution record date in order to be effective for that distribution.

If you are an eligible Unitholder but your Units are not registered in your own name, you cannot participate in the Plan directly but may do so indirectly through your broker by providing appropriate enrollment instructions. Your broker may require certain information or documentation from you before it will act upon your enrollment instructions. Please contact your broker to confirm any such requirements and to inquire about any applicable deadlines.

New Units purchased under the Plan with reinvested distributions (whether under the Premium Distribution™ Component or the Distribution Reinvestment Component) will be purchased from treasury of Inter Pipeline at a 5% discount to the Average Market Price (as defined in the Plan).

If you are an eligible Unitholder and are enrolled in the Premium Distribution™ Component, your cash distributions will, subject to proration as described in the Plan and illustrated under Question #9, be reinvested in new Units under the Plan at a 5% discount to the Average Market Price, and such Units will, without further action required from you, be exchanged by the Plan Agent with the Plan Broker for a cash payment equal to 102% of the reinvested amount. The Plan Agent will in turn remit payment of the Premium Distribution™ to participants in the Premium Distribution™ Component in the same manner that regular cash distributions of Inter Pipeline are paid.

New Units issued by Inter Pipeline on a distribution payment date pursuant to the Premium Distribution™ Component will be issued at a 5% discount to the Average Market Price. If you are an eligible Unitholder and are enrolled to participate in the Premium Distribution™ Component, then the Plan Agent will, in anticipation of the reinvestment of your cash distributions in new Units, pre-sell on your behalf through the Plan Broker a number of Units approximately equal to the number of Units to be purchased on the distribution payment date with your reinvested distributions. Such pre-sales will be made at prevailing market prices. If the prevailing market prices realized are approximately the same as the Average Market Price, then the difference between the issue price of the Units and the price realized on the pre-sales will be approximately 5%. Of this difference, 2% will be paid to you and the balance (which may be more or less than 3%), if any, will be retained by the Plan Broker as compensation for its services in connection with the Plan.

The Plan Broker will in any event be obligated to pay the full amount of the Premium Distribution™ (subject to proration as described in the Plan and illustrated under Question #9) against delivery of the corresponding number of new Units, and bears the risk of unfavourable changes in market price with respect to the new Units. If the Plan Agent for any reason does not receive funds sufficient to pay the Premium Distribution™ on all Units of participants enrolled in the Premium Distribution™ Component, such participants will receive from Inter Pipeline the full amount of the regular cash distribution for each such Unit in respect of which the Premium Distribution™ is not paid.

The Premium Distribution™ Component is subject to the possibility of proration in certain events as described in the Plan. To the extent that your election to receive the Premium Distribution™ cannot be fulfilled, in whole or in part, as a result of such proration, or if Inter Pipeline determines not to make any new equity available under the Plan on a particular distribution payment date, or if the Plan Broker for any reason defaults on its obligation to deliver to the Plan Agent funds sufficient to satisfy the full amount of the Premium Distribution™, or if for any other reason your distribution cannot be reinvested under the Plan, in whole or in part, then you will receive from Inter Pipeline the full amount of the regular cash distribution on each Unit for which the distribution is payable but cannot be reinvested under the Plan.

By way of example, suppose that Inter Pipeline determines that the maximum value of equity available under the Premium Distribution™ Component (after satisfying all elections under the Distribution Reinvestment Component) on the relevant distribution payment date is $1,400,000, and that Inter Pipeline declares a distribution of $0.07 per Unit. In these circumstances, the maximum number of Units in respect of which the Premium Distribution™ may be paid is 20,000,000 (being the maximum amount of equity divided by the per Unit distribution). If Unitholders (including you) holding a total of 30,000,000 Units have elected to receive the Premium Distribution™, then two-thirds proration would apply to all participants in the Premium Distribution™ Component since, in this example, the Premium Distribution™ can only be paid on 20,000,000 Units.

If you own 6,000 Units, are an eligible Unitholder, and are enrolled in the Premium Distribution™ Component, then, in this example, you would receive the Premium Distribution™ equal to 102% of your cash distribution in respect of 4,000 of your Units and 100% of your cash distribution in respect of your remaining 2,000 Units. Any portion of your cash distribution that is not eligible for reinvestment under the Premium Distribution™ Component and to which you would otherwise be entitled on a distribution payment date will be paid to you in the normal manner.

Certificates will not be issued for Units purchased under the Plan. If you are validly enrolled in the Distribution Reinvestment Component, new Units acquired for your account will be credited to your account under the Plan or, if you are enrolled indirectly through your broker, with your broker. You may, however, request a certificate for any number of whole Units held under the Plan by the Plan Agent for your account. See "Certificates for Units" in the Plan. If you are validly enrolled in the Premium Distribution™ Component, new Units acquired for your account will be exchanged with the Plan Broker for the Premium Distribution™.

No. Any Units held under the Plan by the Plan Agent for your account cannot be sold, pledged or otherwise disposed of while so held. If you wish to sell any such Units, you must first withdraw them from under the Plan. See "Certificates for Units" in the Plan.

You may change your election as between the Premium Distribution™ Component and the Distribution Reinvestment Component, or voluntarily terminate your participation, by delivering a new Enrollment Form or the termination portion of the voucher located on the reverse side of the statement of account issued by the Plan Agent, as the case may be, or if you are enrolled in the Plan indirectly through your broker by providing appropriate instructions to your broker. You should consult with your broker to confirm what information or documentation may be required to give effect to your instructions, and to inquire about any applicable deadlines. See "Termination of Participation" and "Change of Election" in the Plan.

A new Enrollment Form or termination request must be received by 5:00 p.m. (Toronto time) on the fifth (5th) business day preceding a distribution record date in order to take effect for that distribution. Enrollment Forms or termination requests received after that time will not be effective until the next distribution.

Yes. Your ability to acquire additional Units under the Distribution Reinvestment Component or receive the Premium Distribution™ under the Premium Distribution™ Component on any particular distribution payment date depends on the amount of new equity, if any, that Inter Pipeline determines to make available under the Plan for that distribution payment date, and on the elections that other eligible Unitholders have made under the Plan.

If, in respect of any distribution payment date, fulfilling the elections of all Plan participants would result in Inter Pipeline exceeding the limit on new Units it has set, then elections for the purchase of new Units on that distribution payment date will be accepted (i) first, from participants electing to reinvest their cash distributions under the Distribution Reinvestment Component, and (ii) second, from participants electing to receive the Premium Distribution™ under the Premium Distribution™ Component.

If Inter Pipeline is not able to accept all elections for a particular component of the Plan, then purchases of Units under that component on the applicable distribution payment date will be prorated among all participants in that component. See Question #9.

The Premium Distribution™ Component is subject to the possibility of additional proration in certain events as described in the Plan.

If Inter Pipeline determines not to issue any equity through the Plan on a particular distribution payment date, or to the extent that the availability of new Units is prorated in accordance with the terms of the Plan, participants will receive from Inter Pipeline the full amount of the regular cash distribution on each Unit for which the distribution is payable but cannot be reinvested under the Plan.

On each distribution payment date, the Plan Agent will, on your behalf, reinvest the cash distributions payable on your Units in new Units purchased from Inter Pipeline. Such new Units will, depending on your election, either be credited to your account pursuant to the Distribution Reinvestment Component or exchanged on your behalf for the Premium Distribution™ pursuant to the Premium Distribution™ Component.

Participation in the Plan does not relieve you of any liability for taxes that may be payable in respect of the cash distributions reinvested in new Units on your behalf under the Plan. The Plan provides a general description of certain Canadian federal income tax considerations relevant to participation in the Plan. The description is, however, a summary only and does not constitute legal or tax advice to any particular Unitholder. You are urged to consult your own tax advisors concerning the implications of your participation in the Plan having regard to your particular circumstances.

If you have any questions regarding the Plan, please direct them to the Plan Agent or to Inter Pipeline, as follows:

Computershare Trust Company of Canada
Attention: Reinvestment Department
100 University Avenue, 9th Floor
Toronto, Ontario M5J 2Y1
1-800-564-6253

Inter Pipeline Fund
Attention: Investor Relations
2600, 237 – 4th Avenue S.W.
Calgary, Alberta T2P 4K3
(403) 290-6000 or 1-866-716-7473