Magellan Midstream Partners LP (NYSE: MMP) and Plains All American Pipeline LP (NYSE: PAA) have formed Saddlehorn Pipeline Co., a 50/50 limited liability company, to construct, own, and operate the Saddlehorn pipeline.
The project is a 550-mile pipeline that will transport various grades of crude oil from the Denver-Julesburg Basin, and potentially the broader US Rocky Mountain area resource plays, to storage facilities in Cushing, Oklahoma, that are owned by Magellan and Plains. An extension to Carr, Colorado, is also under consideration for connection to existing crude oil assets owned by Plains in that region.
The project is estimated to cost between $800 million and $850 million. Magellan will serve as construction manager and pipeline operator. Subject to receipt of necessary permits and regulatory approvals, the Saddlehorn pipeline is expected to be operational during mid-2016.