Magellan Midstream Proceeding with Saddlehorn Pipeline, Open Season Extended through Nov. 20

abarrelfullabarrelfull wrote on 03 Nov 2014 06:22
Tags: magellan n-america pipeline usa

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Magellan Midstream Partners, L.P. (NYSE: MMP) announced today that it plans to proceed with the recently-announced Saddlehorn Pipeline to transport various grades of crude oil from the Niobrara play in northeast Colorado to Magellan’s storage facilities in Cushing, Oklahoma. Binding commitments have been received from a wholly owned subsidiary of Anadarko Petroleum Corporation and Noble Energy, Inc. as part of the pipeline’s ongoing open season. Based on these commitments, Magellan is proceeding with the Saddlehorn Pipeline.

The current open season for the Saddlehorn Pipeline has been extended and includes a new tariff rate structure, with binding commitments now due from potential shippers by 5:00 p.m. Central Time on Nov. 20, 2014. All potential customers will have an equal opportunity to obtain capacity in the open season.

Further, Magellan has entered into letters of intent with Anadarko and Saddle Butte Pipeline II, LLC for potential equity ownership in Saddlehorn Pipeline.

“Magellan is pleased to move forward with the Saddlehorn Pipeline, supported by binding commitments from two of the largest producers in the Niobrara play,” said Michael Mears, chief executive officer. “With Magellan’s existing right-of-way, significant Cushing storage position and independent service provider business model, we believe the Saddlehorn Pipeline is the most efficient, timely and attractive pipeline project to transport increasing Niobrara crude oil production to the strategic Cushing hub.”

The Saddlehorn Pipeline includes construction of an approximate 600-mile, 20-inch diameter pipeline capable of transporting up to 400,000 barrels per day of crude oil from Platteville, Colorado to Magellan’s storage facilities in Cushing. Subject to receipt of any necessary permits and regulatory approvals, the Saddlehorn Pipeline is expected to be operational during the second quarter of 2016.

The project scope, cost and ownership structure of the Saddlehorn Pipeline will be finalized after the open season closes and the total committed volumes are known.

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