1411583--2/27/2009--WILLIAMS_PIPELINE_PARTNERS

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{debt, indebtedness, cash}

{tax, income, asset}

{operation, natural, condition}

{gas, price, oil}

{stock, price, operating}

{regulation, change, law}

{cost, contract, operation}

{investment, property, distribution}

{acquisition, growth, future}

{condition, economic, financial}

{customer, product, revenue}

{stock, price, share}

{financial, litigation, operation}

{cost, regulation, environmental}

{regulation, government, change}

{control, financial, internal}

{capital, credit, financial}

Risks Inherent in Our Industry and Our Business We may not have sufficient cash from operations to enable us to maintain current levels of cash distributions or to pay the minimum quarterly distribution following the establishment of cash reserves and payment of fees and expenses, including cost reimbursements to our general partner. We may not be able to grow or effectively manage our growth. Events in the global financial crisis have made equity and debt markets less accessible and created a shortage in the availability of credit, which could disrupt our financing plans and limit our ability to grow. The continuation of recent economic conditions, including disruptions in the global credit markets, could adversely affect our results of operations. The amount of cash we have available for distribution to holders of our common units and subordinated units depends primarily on our cash flow and not solely on profitability, which may prevent us from making cash distributions during periods when we record net income. We and Williams jointly control Northwest. As a result, we cannot independently control the amount of cash we will receive from Northwest, and we may be required to contribute significant cash to fund Northwest s operations. Northwest s natural gas transportation and storage activities involve numerous risks that might result in accidents and other operating risks and hazards. Northwest s current pipeline infrastructure is aging, which may adversely affect its business and our ability to make distributions to you. Increased competition from alternative natural gas transportation and storage options and alternative fuel sources could have a significant financial impact on us. Northwest may not be able to maintain or replace expiring natural gas transportation and storage contracts at favorable rates or on a long-term basis. Northwest s natural gas transportation and storage operations are subject to regulation by FERC, which could have an adverse impact on its ability to establish transportation and storage rates that would allow it to recover the full cost of operating its pipeline, including a reasonable return, and on our ability to make distributions to you. Northwest could be subject to penalties and fines if it fails to comply with FERC regulations. The outcome of future rate cases to set the rates Northwest can charge customers on its pipeline might result in rates that lower Northwest s return on the capital that Northwest has invested in its pipeline. Legal and regulatory proceedings and investigations relating to the energy industry and capital markets have adversely affected our business and may continue to do so. Any significant decrease in supplies of natural gas in Northwest s areas of operation could adversely affect its business and operating results and reduce our cash available for distribution to unitholders. Decreases in demand for natural gas could adversely affect Northwest s business. Significant prolonged changes in natural gas prices could affect supply and demand, cause a termination of Northwest s transportation and storage contracts or a reduction in throughput on Northwest s system, and adversely affect our cash available to make distributions to you. The failure of new sources of natural gas production or LNG import terminals to be successfully developed in North America could increase natural gas prices and reduce the demand for Northwest s services. Northwest depends on certain key customers for a significant portion of its revenues. The loss of any of these key customers or the loss of any contracted volumes could result in a decline in cash available for us to make distributions to you. If third-party pipelines and other facilities interconnected to Northwest s pipeline and facilities become unavailable to transport natural gas, Northwest s revenues and our ability to make distributions to you could be adversely affected. Northwest is exposed to the credit risks of its customers. Northwest s debt agreements impose restrictions on it that may adversely affect its ability to operate its business. Although Northwest s debt instruments may contain limitations on additional indebtedness, Northwest s general partnership agreement does not prohibit it from incurring indebtedness, which may affect our ability to make distributions to you. Acquisitions or expansion projects may reduce our cash from operations on a per unit basis. Northwest s operations are subject to governmental laws and regulations relating to the protection of the environment, which may expose them to significant costs and liabilities and could exceed current expectations. Northwest may be subject to legislative and regulatory responses to climate change with which compliance may be costly. Northwest does not own all of the land on which its pipeline and facilities are located, which could disrupt its operations. Northwest s costs and funding obligations for defined benefit pension plans and costs for other postretirement benefit plans, in which it participates, are affected by factors beyond its control. We and Northwest do not insure against all potential losses and could be seriously harmed by unexpected liabilities or by the inability of the insurers we do use to satisfy our claims. Execution of Northwest s capital projects subjects them to construction risks, increases in labor costs and materials, and other risks that may adversely affect financial results. Northwest s assets and operations can be affected by weather and other natural phenomena. Acts of terrorism could have a material adverse effect on Northwest s and our financial condition, results of operations and cash flows. Institutional knowledge residing with current employees of Northwest nearing retirement eligibility might not be adequately preserved. Failure of or disruptions to Northwest s outsourcing relationships might negatively impact its ability to conduct its business. Potential changes in accounting standards might cause us to revise our financial results and disclosures in the future, which might change the way analysts measure our business or financial performance. Risks Inherent in an Investment in Us Williams controls our general partner, which has sole responsibility for conducting our business and managing our operations. Williams, our general partner, and their respective affiliates have conflicts of interest with us and limited fiduciary duties, and they may favor their own interests to the detriment of our unitholders. The credit and risk profile of our general partner and its owner, Williams, could adversely affect our or Northwest s credit ratings, which could increase our or Northwest s borrowing costs or hinder our or Northwest s ability to raise capital. Our partnership agreement limits our general partner s fiduciary duties to holders of our common units and subordinated units and restricts the remedies available to holders of our common units and subordinated units for actions taken by our general partner that might otherwise constitute breaches of fiduciary duty. Holders of our common units have limited voting rights and are not entitled to elect our general partner or its directors, which could reduce the price at which the common units will trade. If you are not an Eligible Holder, you will not be entitled to receive distributions or allocations of income or loss on your common units, and your common units will be subject to redemption at a price that may be below the then-current market price. Our general partner may elect to cause us to issue Class B common units and additional general partner units to it in connection with a resetting of the target distribution levels related to its incentive distribution rights without the approval of the conflicts committee of its board of directors or the holders of our common units. This may result in lower distributions to holders of our common units in certain situations. Cost reimbursements to our general partner and its affiliates for services provided to us, which will be determined by our general partner, will be substantial and will reduce our cash available for distribution to you. Even if unitholders are dissatisfied, they cannot initially remove our general partner without its consent. We have a holding company structure in which our subsidiaries conduct our operations and own our operating assets, which may affect our ability to make distributions to you. The control of our general partner may be transferred to a third party without unitholder consent. We may issue additional units without your approval, which would dilute your ownership interests. Common units held by our general partner eligible for future sale may adversely affect the price of our common units. Our general partner has a limited call right that may require you to sell your common units at an undesirable time or price. Our partnership agreement restricts the voting rights of unitholders owning 20 percent or more of our common units. Your liability may not be limited if a court finds that unitholder action constitutes control of our business. Unitholders may have liability to repay distributions that were wrongfully distributed to them. If we are deemed an investment company under the Investment Company Act of 1940, it would adversely affect the market price of our common units and could have a material adverse effect on our business. Tax Risks to Common Unitholders Our tax treatment depends on our status as a partnership for federal income tax purposes, as well as our not being subject to a material amount of entity-level taxation by states and localities. If the Internal Revenue Service ( IRS ) were to treat us as a corporation for federal income tax purposes or if we were to become subject to a material amount of entity-level taxation for state or local tax purposes, the amount of cash available for distribution to our unitholders would be substantially reduced. The tax treatment of publicly traded partnerships or an investment in our common units could be subject to potential legislative, judicial or administrative changes and differing interpretations, possibly on a retroactive basis. We prorate our items of income, gain, loss and deduction between transferors and transferees of the units each month based upon the ownership of the units on the first day of each month, instead of on the basis of the date a particular unit is transferred. You will be required to pay taxes on your share of our income even if you do not receive any cash distributions from us. The tax gain or loss on the disposition of our common units could be more or less than expected. We will treat each purchaser of common units as having the same tax benefits without regard to the actual common units purchased. The IRS may challenge this treatment, which could adversely affect the value of our common units. An IRS contest of the federal income tax positions we take may adversely affect the market for our common units, and the cost of any IRS contest will reduce our cash available for distribution to our unitholders and our general partner. Tax-exempt entities and non-U.S. persons face unique tax issues from owning common units that may result in adverse tax consequences to them. We have adopted certain valuation methodologies that may result in a shift of income, gain, loss and deduction between the general partner and the unitholders. The IRS may challenge this treatment, which could adversely affect the value of our common units.

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1411583--2/27/2009--WILLIAMS_PIPELINE_PARTNERS_L.P.