Tulsa-based SemGroup Corporation and Denver-based DCP Midstream, LP are teaming up to commence an open season process to solicit binding commitments in developing a new pipeline system to transport segregated, light batches of crude oil originating in Cushing, Oklahoma and terminating in Houston, Texas, according to a joint press release issued on Monday.
All potential shippers must submit binding commitments by 5 p.m. Central Time on January 31, 2019.
The proposed Gladiator Pipeline would originate at SemGroup’s Cushing terminal and provide crude oil service to Gulf Coast markets. The Cushing origin would provide potential shippers the connectivity to source barrels from key pipelines that converge in Cushing. This includes the White Cliffs Pipeline which serves Colorado’s Denver Julesburg (DJ) Basin.
“We look forward to offering our DJ Basin customers an additional outlet for neat crude oil service out of the Cushing market with SemGroup,” said Don Baldridge, President of Commercial for DCP Midstream. “This opportunity allows us to potentially leverage a part of our Southern Hills’ existing pipeline for our DJ and Mid-continent producers’ benefit, while continuing to grow our NGL capacity in the region through additional Southern Hills pipeline looping projects.”
“We are excited to work with DCP to integrate this pipeline into our existing transportation and storage footprint and offer customers seamless connectivity from the Rockies and Mid-Continent to a vast network of marketing options including our Gulf Coast HFOTCO terminal,” said David Minielly, Vice President of SemGroup’s crude operations. “Our ability to deliver neat light batches from Cushing to Houston provides shippers an advantage.”
At the pipeline’s destination, potential shippers would have many options for connecting barrels to a variety of demand centers, including refineries in the Houston area or crude oil storage and export facilities, such as SemGroup’s HFOTCO Terminal. If sufficient commitments are obtained, subject to the receipt of all necessary approvals, permits and force majeure, the proposed Gladiator Pipeline may be operational by the third quarter of 2020, following the potential construction of new NGL capacity by DCP.