News Release



Inter Pipeline Fund Announces Adoption of Premium Distribution(TM) and Distribution Reinvestment Plan


May 07, 2009 - 12:20 ET

CALGARY, ALBERTA--(Marketwire - May 7, 2009) - Inter Pipeline Fund (Inter Pipeline) (TSX:IPL.UN) announced today that it has adopted a Premium Distribution(TM) and Distribution Reinvestment Plan (Plan). The Plan represents a significant enhancement to Inter Pipeline's existing distribution reinvestment plan because unitholders may elect to receive an additional 2% cash payment under the new Plan above the regular monthly distribution amount. With adoption of the Plan, Inter Pipeline anticipates raising $50 to $75 million of equity capital annually assuming, among other things, an investor participation rate comparable to that experienced by industry peers that have implemented similar plans.

Eligible unitholders may elect to participate in the Plan commencing with the May 2009 cash distribution. The Plan supersedes, amends and restates in its entirety Inter Pipeline's current Distribution Reinvestment and Optional Unit Purchase Plan. The primary differences between the Plan and the previous plan are the addition of the Premium Distribution(TM) component and the discontinuation of the optional unit purchase component which was available under the previous plan.

The Plan allows eligible unitholders to direct that their cash distributions be reinvested in additional units issued from treasury at a 5% discount to the Average Market Price (as defined in the Plan) on the applicable distribution payment date. The Plan also allows eligible unitholders to elect, under the Premium Distribution(TM) component of the Plan, to have these additional units delivered to the designated plan broker in exchange for a premium cash payment equal to 102% of the cash distribution such unitholders would otherwise have received on the applicable distribution payment date. Canaccord Capital Corporation will act as the plan broker for the Premium Distribution(TM) component of the Plan.

A registered unitholder who wishes to enroll in the Plan for the May 2009 distribution must deliver a completed enrollment form to Computershare Trust Company of Canada, as Plan Agent, before 5:00 p.m. (Toronto time) on Friday, May 15, 2009. Beneficial unitholders who wish to participate in the Plan should contact the broker or other nominee through which their units are held to provide appropriate enrollment instructions and to ensure any deadlines or other requirements that such broker or nominee may impose or be subject to are met. Registered and beneficial unitholders who enroll in the Plan after the applicable deadline will be accepted but only effective for subsequent distributions.

A complete copy of the Plan, together with a related series of questions and answers and an enrollment form for registered unitholders, is available on Inter Pipeline's website at www.interpipelinefund.com under the heading "Unitholder Information - DRIP", or from the Plan Agent at www.computershare.com or by calling 1-800-564-6253. Unitholders should carefully read the complete text of the Plan before making any decisions regarding their participation in the Plan.

Inter Pipeline reserves the right to limit the amount of new equity available under the Plan on any particular distribution date. Accordingly, participation may be prorated in certain circumstances. In the event of proration, a participating unitholder will receive from Inter Pipeline the declared cash distribution on any units enrolled in the Plan for which the distribution is payable but cannot be reinvested under the Plan in accordance with such unitholder's election.

No commissions, service charges or brokerage fees are payable in connection with the purchase of units from Inter Pipeline under either component of the Plan. Eligible unitholders who wish to participate in the Plan indirectly through the broker or other nominee through which their units are held should consult such broker or nominee to confirm whether commissions, service charges or other fees are payable.

Participation in the Plan does not relieve unitholders of any liability for taxes that may be payable in respect of distributions that are reinvested in new units under the Plan. Unitholders should consult their tax advisors concerning the tax implications of their participation in the Plan having regard to their particular circumstances.

(TM) Denotes trademark of Canaccord Capital Corporation.

Inter Pipeline Fund

Inter Pipeline is a major petroleum transportation, bulk liquid storage and natural gas liquids extraction business based in Calgary, Alberta, Canada. Structured as a publicly traded limited partnership, Inter Pipeline owns and operates energy infrastructure assets in western Canada, the United Kingdom, Germany and Ireland. Additional information about Inter Pipeline can be found at www.interpipelinefund.com.

Inter Pipeline is a member of the S&P/TSX Composite Index. Class A Units trade on the Toronto Stock Exchange under the symbol IPL.UN.

Eligible Investors

Only persons who are residents of Canada, or if partnerships are Canadian partnerships, in each case for purposes of the Income Tax Act (Canada) are entitled to purchase and own Class A Units of Inter Pipeline.

Disclaimer

Certain information contained herein may constitute forward-looking statements that involve risks and uncertainties. Forward-looking statements in this news release include, but are not limited to, statements regarding the amount of equity the Plan might raise. Readers are cautioned not to place undue reliance on forward-looking statements. Such information, although considered reasonable by the General Partner of Inter Pipeline at the time of preparation, may later prove to be incorrect and actual results may differ materially from those anticipated in the statements made. For this purpose, any statements that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements often contain terms such as "may", "will", "should", "anticipate", "expects" and similar expressions. Such risks and uncertainties include, but are not limited to, risks associated with operations, such as loss of markets, regulatory matters, environmental risks, industry competition, potential delays and cost overruns of construction projects, including the Corridor pipeline system expansion project, and the ability to access sufficient capital from internal and external sources. You can find a discussion of those risks and uncertainties in Inter Pipeline's securities filings at www.sedar.com. The forward-looking statements contained in this news release are made as of the date of this document, and, except to the extent required by applicable securities laws and regulations, Inter Pipeline assumes no obligation to update or revise forward-looking statements made herein or otherwise, whether as a result of new information, future events, or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary note.

All dollar values are expressed in Canadian dollars unless otherwise noted.



Inter Pipeline Fund
 Investor Relations:
Jeremy Roberge
Vice President, Capital Markets
(403) 290-6015
or
Toll Free: 1-866-716-7473
Email: jroberge@interpipelinefund.com
or
Inter Pipeline Fund
Media Relations:
Tony Mate
Director, Corporate and Investor Communications
(403) 290-6166
Email: Tony.Mate@interpipelinefund.com
Website: www.interpipelinefund.com
Inter Pipeline Fund

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