Magellan Midstream Partners LP (NYSE: MMP) has extended the open season for commitments on the Saddlehorn pipeline to transport various grades of crude oil from the Niobrara shale play in northeast Colorado to Magellan's storage facilities in Cushing, Oklahoma. Binding commitments are now due by 5 p.m. Central Time on Feb. 27.
The Saddlehorn pipeline includes construction of a 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 sufficient support, Magellan could also add more origin points.
Magellan is obtaining permits and right-of-way, and has secured an 80-acre tract of land to serve as the Platteville origin. Subject to receipt of necessary permits and regulatory approvals, the Saddlehorn pipeline from Platteville to Cushing is expected to be operational during the second quarter of 2016.
Magellan has received binding commitments from a wholly owned subsidiary of Anadarko Petroleum Corp. and Noble Energy Inc. In addition, Magellan has entered into letters of intent with potential equity owners in Saddlehorn pipeline and is in discussions with an additional strategic party for possible equity ownership in the project. Magellan expects to serve as construction manager and operator of Saddlehorn pipeline.
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.