Tallgrass Energy and Kinder Morgan Announce Exclusive Agreement for Rockies Crude Oil Transportation Service to Downstream Markets
In addition, approximately 200 miles of new pipeline would be constructed to provide crude oil deliveries into Cushing, Okla.
Tallgrass Energy, LP (NYSE: TGE) and Kinder Morgan, Inc. (NYSE: KMI)
today announced an agreement to jointly develop a solution to increase
existing crude oil takeaway capacity in the growing Powder River and
Denver-Julesburg basins and to add incremental capacity to the Williston
Basin and portions of Western Canada.
Pursuant to the agreement, the proposed venture would include both
existing and newly constructed assets. TGE would contribute its Pony
Express Pipeline System, and KMI would contribute portions of its
Wyoming Intrastate Company and Cheyenne Plains Gas Pipeline and begin
the process of abandonment and conversion to crude oil service. In
addition, approximately 200 miles of new pipeline would be constructed
to provide crude oil deliveries into Cushing, Okla.
In total, the combined pipeline system is expected to be capable of
delivering up to 800,000 barrels per day (bpd) of light crude oil and
150,000 bpd of heavy crude oil from points in Wyoming and Colorado to
TGE’s and KMI’s Deeprock terminal in Cushing. From there, customers will
have pipeline connectivity to the Gulf Coast and export markets through
TGE’s planned Seahorse Pipeline and other existing or proposed future
pipeline projects. The combined project is expected to provide initial
service as early as the second half of 2020.
“This combination of assets creates a significant growth opportunity for
both companies,” said Tallgrass Chief Operating Officer Bill Moler.
“Shippers benefit by gaining access to a pipeline system that can source
from multiple basins and access numerous demand markets including
existing refinery connections on Pony Express and Tallgrass’ downstream
options. Other shipper benefits include a quicker in-service date and
the ability to batch a greater variety of common streams.”
“There are a number of competitive advantages to jointly developing this
project and leveraging KMI’s and TGE’s existing assets, including the
expansion of our Double H Pipeline system,” said Don Lindley, Chief
Commercial Officer for Products Pipelines at KMI. “Chief among them is
the ability to quickly and efficiently place an additional 550,000
barrels per day of crude transportation takeaway capacity in service
from the Rockies, which helps domestic producers and offers near-term
relief for Canadian producers.”
Completion of the transaction between TGE and KMI remains subject to
conditions, including receipt of applicable state and federal regulatory
approvals, among other items.
Extension of Pony Express Open Seasons
In conjunction with the execution of the agreement, TGE extended its
current Pony Express expansion and joint tariff open season with
Seahorse to Feb. 28, 2019. For further information regarding the
project, please contact Kyle Quackenbush (303-763-3319) or Andrew
DiPaolo (303-763-3329) with TGE and Dwaine Shroyer (918-588-5074) with
KMI.
About Tallgrass Energy
Tallgrass Energy, LP (NYSE: TGE) is a growth-oriented midstream energy
infrastructure company operating across 11 states with transportation,
storage, terminal, water, gathering and processing assets that serve
some of the nation’s most prolific crude oil and natural gas basins.
To learn more, please visit our website at www.tallgrassenergy.com.
About Kinder Morgan
Kinder Morgan, Inc. (NYSE: KMI) is one of the largest energy
infrastructure companies in North America. We own an interest in or
operate approximately 84,000 miles of pipelines and 157 terminals. Our
pipelines transport natural gas, refined petroleum products, crude oil,
condensate, CO2 and other products, and our terminals transload and
store liquid commodities including petroleum products, ethanol and
chemicals, and bulk products, including petroleum coke, metals and ores.
For more information please visit www.kindermorgan.com.
Cautionary Note Concerning Forward-Looking Statements
Disclosures in this press release contain forward-looking statements.
All statements, other than statements of historical facts, included in
this press release that address activities, events or developments that
management expects, believes or anticipates will or may occur in the
future are forward-looking statements. Without limiting the generality
of the foregoing, forward-looking statements contained in this press
release specifically include TGE and KMI's proposed joint venture
transaction, TGE and KMI's proposed crude oil transportation project and
the proposed Seahorse Pipeline, including each transaction and project's
feasibility, cost, execution, in-service timing, capabilities and
expected benefits. Such statements are subject to a number of
assumptions, risks and uncertainties, many of which are beyond the
control of Tallgrass, which may cause actual results to differ
materially from those implied or expressed by the forward-looking
statements, and other important factors that could cause actual results
to differ materially from those projected, including those set forth in
reports filed by Tallgrass with the Securities and Exchange Commission.
Any forward-looking statement applies only as of the date on which such
statement is made and Tallgrass does not intend to correct or update any
forward-looking statement, whether as a result of new information,
future events or otherwise, except as required by law.
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