Tallgrass, Silver Creek Expand Powder River Venture
Tallgrass Energy and Silver Creek Midstream have agreed to expand their Powder River Basin joint venture to transport crude oil production from the Powder River Basin to Guernsey, Wyoming.
The expanded joint venture, named Powder River Gateway, will own the existing 90 kbbls/d-Powder River Express Pipeline (PRE) and the Iron Horse Pipeline, which is scheduled to commence operations early next year with an initial capacity of 100 kbbls/d, expandable up to 200 kbbls/d.
Those two pipelines will transport crude production from Silver Creek’s Pronghorn Terminal to joint venture-owned terminal facilities in Guernsey for access to Tallgrass’ Pony Express crude pipeline system and two other existing takeaway pipelines.
Tallgrass will operate Powder River Gateway and own 51 percent of the venture, and Silver Creek will own 49 percent.
Including recent acquisitions Silver Creek will own and operate a total of 120 miles of existing pipeline and have more than 330,000 acres dedicated from Powder River Basin producers. Its infrastructure includes rail capability in and out of Silver Creek’s Pronghorn Terminal, batching capabilities throughout the system for at least three specs of crude, and trucking capabilities through a transportation fleet to meet interim service needs as gathering pipelines are constructed.
Silver Creek plans to begin construction before the end of the year on an expansion of its gathering and trunkline infrastructure to add an initial 52 miles of crude pipelines and 100,000 barrels of storage.
Tallgrass, which owns and operates Pony Express, is developing the Seahorse Pipeline and Plaquemines Liquids Terminal projects. Through its Powder River Gateway venture, it intends to create joint tariffs with both Pony Express and Seahorse to provide seamless transportation for Iron Horse and PRE shippers to Cushing, Oklahoma, and St. James, Louisiana.
Pony Express intends to launch an open season for additional expansion capacity out of Powder River Gateway’s Guernsey facility, in November 2018.