Saddlehorn Pipeline Co. LLC is expanding the capacity of its crude oil pipeline in the DJ and Powder River basins to about 290,000 barrels per day after securing volume commitments during its open season in July.
The Saddlehorn pipeline's additional capacity would be available in late 2020 after additional incremental pumping and storage capabilities is added, according to an Aug. 29 news release.
The pipeline is currently capable of moving 190,000 bbl/d of crude oil and condensate from the DJ and Powder River basins to storage facilities in Cushing, Okla., owned by Magellan Midstream Partners LP and Plains All American Pipeline LP. Saddlehorn is jointly owned by affiliates of Magellan, Plains and Western Midstream Partners LP, a partnership formed by Anadarko Petroleum Corp., which Occidental Petroleum Corp. acquired recently. Magellan serves as the pipeline's operator.
Saddlehorn secured a commitment from Black Diamond Gathering LLC, a joint venture between Noble Energy Inc.'s midstream partnership Noble Midstream Partners LP and EnCap Flatrock Midstream-backed Greenfield Midstream LLC. Noble Midstream owns 54.4% and operates Black Diamond, while Greenfield owns the remaining 45.6%, according to a separate release.
The commitment involves an option for Black Diamond to take up to a 20% stake in Saddlehorn, which expires in April 2020. If Black Diamond exercises its option, Magellan and Plains would each divest up to a 10% stake in Saddlehorn to the venture. Western Midstream would retain its 20% stake in the pipeline.
Separately, Black Diamond obtained a 15-year oil gathering dedication in the DJ Basin from Verdad Resources LLC, boosting the total acreage dedicated to the Black Diamond system to roughly 243,000 acres.
