NGL Energy Partners Expects Colorado-to-Oklahoma Crude Pipeline to Start Deliveries in November

Researched by Industrial Info Resources (Sugar Land, Texas)--NGL Energy Partners LLC (NYSE:NGL) (Tulsa, Oklahoma) will start seeing the benefits of its share of the Saddlehorn-Grand Mesa crude oil pipeline project by November, according to company officials.

Late last year, NGL Energy Partners, owner of the Grand Mesa pipeline project, and the owners of the Saddlehorn pipeline project opted to combine their projects into a single pipeline. With an initial capacity of 340,000 barrels per day (BBL/d), it will deliver crude oil from the Denver-Julesburg Basin in Colorado to the Cushing Hub in Oklahoma. Of that capacity, 190,000 BBL/d is owned by Saddlehorn Pipeline's partners, who include Magellan Midstream Partners (NYSE:MMP) (Tulsa, Oklahoma), Plains All American Pipeline LLC (NYSE:PAA) (Houston, Texas) and Anadarko Petroleum Corporation (NYSE:APC) (The Woodlands, Texas). The remaining 150,000 BBL/d is allocated to Grand Mesa Pipeline, which is owned by NGL Energy Partners. For more information, see December 4, 2015, article - Denver-Julesburg-to-Cushing Crude Pipelines: Three Projects Enter, One Project Leaves.

Industrial Info is tracking two NGL Energy Partners projects worth a combined $365 million that are connected to Grand Mesa Pipeline. The company said last week it expects its remaining expenditures for the project to total $110 million. The pipeline is expected to deliver $120 million in earnings before interest, taxes, depreciation and amortization (EBITDA) to NGL Energy Partners in its first full year of operations and $150 million in its second year.

The company's crude oil terminal in Louisiana is also expected to see completion later this year, Chief Executive Officer Mike Krimbill said last week during NGL Energy Partners' quarterly earnings conference call. Located in Houma on the Intracoastal Waterway, the 200,000 BBL/d crude-by-rail terminal will make use of barges and tank trucks. It has a total investment value of $75 million.

Impairment charges, the drop in commodity prices, along with a warmer-than-usual winter (impacting its propane businesses), resulted net loss of $187 million for its fiscal year ended March 31, NGL Energy Partners reported, compared with net income of $50 million for the previous fiscal year. The partnership said it expects to spend between $200 million and $300 million on growth capital expenditures during the current fiscal year.

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