Two Houston pipeline operators have made an agreement to extend their operations in Colorado’s DJ Basin in a deal that will mean more oil flowing to Oklahoma’s Cushing Hub.
Black Diamond Gathering, a joint venture between Noble Midstream Partners and Greenfield Midstream recently reached agreement to expand their oilfield footprint to 243,000 acres according to the Houston Chronicle.
Noble Energy and Black Diamond recently agreed to ship crude oil on the Magellan Midstream Partners-led Saddlehorn Pipeline, a project connecting shale basins in Powder River Basin Wyoming and DJ Basin in Colorado to storage terminals in Cushing, Oklahoma.
Black Diamond’s deal with Magellan gives the joint venture an option to buy a 20 percent stake in the Saddlehorn Pipeline.
“This opportunity is a natural expansion of Black Diamond’s strategic footprint, with the ability to realize economics further down the crude oil value chain while enhancing the all-in value proposition for our customers,” Noble Midstream Partners CEO Brent Smolik said in a statement.
Under the second deal, Black Diamond will provide crude oil gathering services for Dallas exploration and production company Verdad Resources, a new customer for the pipeline joint venture.
The 15-year deal expands Black Diamond’s presence by 85,000 acres, giving the joint venture a 243,000-acre footprint in the DJ Basin.
“These positive commercial developments enhance the resiliency and long-term potential of this premier oil gathering platform,” Smolik said in a statement.
Lauched in January 2018, Noble Midstream Partners owns 54.4 percent of Black Diamond while Greenfield Midstream owners 45.6 percent. The joint venture owns and operates 240 miles of pipeline and has 390 million barrels of crude oil storage capacity.