Tallgrass Energy and Silver Creek Midstream will expand their Powder River Basin joint venture (PRB joint venture) with the addition of the Powder River Express Pipeline and crude oil terminal facilities in Guernsey, Wyoming.
Earlier this year, the two midstream companies created a joint venture to develop the 128km long Iron Horse Pipeline, which along with the newly added Powder River Express Pipeline to deliver crude oil produced in the Powder River Basin from the Pronghorn Terminal owned by Silver Creek.
The two pipelines will transport crude oil to Guernsey where it will be further transported through the Pony Express crude pipeline system (Pony Express) owned by Tallgrass Energy and also two other existing takeaway pipelines.
Tallgrass Energy will be the operator of the expanded joint venture to be known as Powder River Gateway with a stake of 51% with the remaining 49% to be owned by Silver Creek.
Tallgrass chief operating officer Bill Moler said: “We look forward to expanding our partnership with Silver Creek as they continue to extend their footprint in the PRB.
“Our combined Powder River pipeline system will offer superior transportation service and increased expansion flexibility, allowing Powder River Gateway to continue offering the most competitive rates and services in the PRB as production continues to increase.”
The 12inch Powder River Express Pipeline, which will be about 112km long, has a current capacity of 90,000 barrels per day, and can be expanded to up to 125,000 barrels per day.
The Iron Horse Pipeline, on the other hand, which will initially have a capacity of about 100,000 barrels per day, is scheduled to be placed into service in the first quarter of 2019.
The crude oil terminal facilities in Guernsey that have been included in the joint venture have a total of 370,000 barrels of crude storage currently in-service. Upon their full construction, the facilities will include over one million barrels of storage.
Silver Creek founder and CEO Patrick Barley said: “Silver Creek is pleased to expand our relationship with Tallgrass in the PRB. Their current and growing long-haul crude transportation capabilities combined with Silver Creek’s gathering and transportation assets in the PRB position Powder River Gateway to be the most efficient and flexible transportation and terminal facility in the PRB, offering access to all Guernsey downstream markets.”