Expanded Powder River pipeline system to move more oil to Cushing hub

Kansas City-based Tallgrass Energy, LP, a firm with operations in Oklahoma, has announced it’s joined with Silver Creek Midstream, LLC  of Texas to expand their Powder River Basin join venture in Wyoming. It’s a venture that will increase the flow of oil from the Powder River basin eventually to the Cushing storage hub in Oklahoma.

Their joint venture is called Powder River Gateway, LLC and it will own the Iron Horse Pipeline, the Powder River Express Pipeline and crude oil terminal facilities in Guernsey, Wyoming.  Iron Horse and the Powder River Express will move crude oil to Guernsey where it will have access to the Tallgrass Pony Express crude pipeline system.

Iron Horse is a nearly 80-mile, 16-inch crude oil pipeline currently under construction. It will have an initial capacity of nearly 100,000 barrels a day and could be expanded to 200,000 barrels a day.

The Powder River Express line is 70 miles in length and consists of a 12-inch crude oil pipeline. Its capacity is 90,000 barrels a day but can be expanded to 125,000 barrels a day.

As for the Guernsey operation, it covers 340 acres and includes 370,000 barrels of crude storage but once fully constructed will have 1 million barrels of storage.

When combining Silver Creek’s existing system with its recent acquisition of additional PRB crude oil assets, Silver Creek will own and operate a total of 120 miles of existing pipeline and have more than 330,000 acres dedicated from top Powder River Basin producers.

Silver Creek’s PRB infrastructure offers rail capability in and out of Silver Creek’s Pronghorn Terminal located in Converse County, batching capabilities throughout the system for at least three specs of crude, and trucking capabilities through a transportation fleet to meet interim service needs as gathering pipelines are constructed.

Furthermore, Silver Creek will commence construction in Q4 2018 to further develop the existing gathering and trunkline infrastructure by an initial 52 miles of crude pipelines and 100,000+ barrels of additional storage.

Tallgrass, which owns and operates Pony Express and is developing both the Seahorse Pipeline (“Seahorse”) and Plaquemines Liquids Terminal (“PLT”) projects, provides extensive downstream market access for PRB producers.

Powder River Gateway intends to create joint tariffs with both Pony Express and Seahorse, providing Iron Horse and PRE shippers seamless transportation from Silver Creek’s Pronghorn Terminal to Cushing, Okla., St. James, La., export markets through PLT, and more than 3 million barrels per day of refining demand directly connected to Pony Express or Seahorse.

Additionally, Tallgrass is pursuing multiple expansion projects on Pony Express to meet the needs of growing PRB production. These expansion projects will be staged over the next few years, with the initial pump upgrades coming online in 2018. Pony Express intends to launch an open season for additional expansion capacity out of Powder River Gateway’s Guernsey facility, in November 2018.

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