Wednesday, June 24, 2015

Open Season

"Open season" means something different to environmentalists than it means to pipeline companies.

Random Update On A DJ Pipeline

From a press release.
Saddlehorn is a limited liability company owned by Magellan Midstream Partners, L.P., Plains All American Pipeline, L.P., and Anadarko Petroleum Corporation. 
Saddlehorn will construct, own and operate the approximately 600-mile pipeline that will transport various grades of crude oil from the DJ Basin, and potentially the broader Rocky Mountain and Bakken area resource plays, to storage facilities in Cushing, OK, owned by Magellan and Plains. 
The 20-inch pipeline from Platteville, CO, to Cushing, OK, ultimately has the capacity to transport up to 400,000 barrels per day (bpd), with the initial capacity expected to be closer to 200,000 bpd. 
It was in the news today because the owners have decided to extend the pipeline about fifty (50) miles north of Platteville, CO, to Carr, CO.
The Carr extension project is currently estimated to cost between $80 million and $100 million.
The Platteville to Cushing pipeline is expected to be operational during mid-2016 and the extension to Carr is anticipated to be in service by the end of 2016. 
So, there are some nice data points.

Despite the slowdown in oil production due to the decrease in the price of oil, Magellan, et al, has decided to extend the pipeline by 50 miles at a very significant cost.

The cost of a pretty routine pipeline seems to be in the neighborhood of $1 to $2 million per mile. 

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