Magellan launches Niobrara-to-Cushing crude line open season

Magellan Midstream Partners LP has launched an open season to assess customer interest in transporting various grades of crude oil from the Niobrara shale to its storage site in Cushing, Okla., via its proposed 600-mile, 20-in. OD Saddlehorn pipeline.

Saddlehorn would carry as much as 400,000 b/d from Platteville, Colo., to Cushing, using existing right-of-way for what Magellan describes as a significant portion of its route.

Subject to sufficient commitments from shippers and regulatory approvals, Saddlehorn could be operational during second-quarter 2016.

Magellan is already in discussions with two major producers who have expressed interest in committing to the project, and Magellan intends to proceed with the project if commitments are received at currently negotiated levels from these producers. All potential customers will have an equal opportunity to obtain capacity in the open season, Magellan said. It closes Oct. 22.

Baker Hughes Inc. reported a 5 unit increase in drilling rigs operating in the DJ-Niobrara region for the week ending Aug. 15 (OGJ Online, Aug. 15, 2014). PwC US Energy Practice reported three merger and acquisition deals totaling $432 million in the Niobrara shale for the 3 months ending June 30 (OGJ Online, July 30, 2014).

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