Reports related to this article:
Project(s): View 6 related projects in PECWeb
Plant(s): View 4 related plants in PECWeb
Released November 12, 2014 | SUGAR LAND
en
Researched by Industrial Info Resources (Sugar Land, Texas)--The Niobrara Shale in Colorado has one of the lowest break-even points of any U.S. shale play, at approximately $55 per barrel. The area in which it is located has become a popular stop on the way from the Bakken Shale in North Dakota and Montana to the hub at Cushing, Oklahoma.
Multiple projects to carry crude from Colorado to Cushing have been announced in the past year, and with oil prices currently sinking to 2010 levels, the low break-even threshold of Niobrara/Wattenberg crude oil helps to assure producers and shippers that it is a play that will stay viable. Couple with that the geographic location of Colorado between the Bakken Shale and Cushing, and its popularity with producers and shippers is easy to understand.
In the past year, the White Cliffs pipeline, owned by SEMGroup LP (NYSE:SEMG) (Tulsa, Oklahoma), and the Pony Express Pipeline (PXP) Northeast Colorado Lateral, owned by Tallgrass Energy Partners LP (NYSE:TEP) (Leawood, Kansas), have been brought online, providing more than 150,000 barrels per day (BBL/d) of takeaway capacity for Denver-Julesburg Basin (DJ Basin) crude oil that reaches Cushing.
View Project Report - 300047153 300111013 300174623 300110456
DJ Basin crude has to compete for this capacity with crude oil from the Bakken and from western Canada farther north. In the past few months, however, largely since the start-up of the PXP conversion from Colorado to Cushing, several other pipeline projects to carry crude in Colorado have been announced.
Because the PXP conversion and White Cliffs pipeline have been approved and begun operation, a precedent for DJ Basin crude oil traveling via pipeline to Cushing has been established. This makes the regulatory process for future pipelines much smoother, potentially cutting down time, costs and risks to the owner.
Enterprise Products Partners (NYSE:EPD) (Houston) has announced its Bakken-to-Cushing pipeline, which is expected to pass through parts of Colorado on its way to Cushing, potentially picking up DJ basin crude along the way.
View Project Report - 300157765
Saddle Butte Pipeline II LLC (Durango, Colorado) previously had conducted an open season for a 250,000-BBL/d pipeline from Weld County, Colorado, to Cushing, dubbed Rockies South. However, Rockies South has since been canceled, and Saddle Butte has announced its intent to jointly develop the 400,000-BBL/d Saddlehorn pipeline with Magellan Midstream Partners LP (NYSE:MMP) (Tulsa, Oklahoma).
A relative newcomer to the pipeline business is Rimrock Midstream (Dallas, Texas), which is developing another Colorado-to-Cushing pipeline--dubbed the Grand Mesa Pipeline--in conjunction with NGL Energy Partners LP (NYSE:NGL) (Tulsa, Oklahoma). Grand Mesa and Saddlehorn are both expected to be put into service in 2016, providing more than 500,000 BBL/d of Colorado-to-Cushing takeaway capacity.
View Project Report - 300189357
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Multiple projects to carry crude from Colorado to Cushing have been announced in the past year, and with oil prices currently sinking to 2010 levels, the low break-even threshold of Niobrara/Wattenberg crude oil helps to assure producers and shippers that it is a play that will stay viable. Couple with that the geographic location of Colorado between the Bakken Shale and Cushing, and its popularity with producers and shippers is easy to understand.
In the past year, the White Cliffs pipeline, owned by SEMGroup LP (NYSE:SEMG) (Tulsa, Oklahoma), and the Pony Express Pipeline (PXP) Northeast Colorado Lateral, owned by Tallgrass Energy Partners LP (NYSE:TEP) (Leawood, Kansas), have been brought online, providing more than 150,000 barrels per day (BBL/d) of takeaway capacity for Denver-Julesburg Basin (DJ Basin) crude oil that reaches Cushing.
View Project Report - 300047153 300111013 300174623 300110456
DJ Basin crude has to compete for this capacity with crude oil from the Bakken and from western Canada farther north. In the past few months, however, largely since the start-up of the PXP conversion from Colorado to Cushing, several other pipeline projects to carry crude in Colorado have been announced.
Because the PXP conversion and White Cliffs pipeline have been approved and begun operation, a precedent for DJ Basin crude oil traveling via pipeline to Cushing has been established. This makes the regulatory process for future pipelines much smoother, potentially cutting down time, costs and risks to the owner.
Enterprise Products Partners (NYSE:EPD) (Houston) has announced its Bakken-to-Cushing pipeline, which is expected to pass through parts of Colorado on its way to Cushing, potentially picking up DJ basin crude along the way.
View Project Report - 300157765
Saddle Butte Pipeline II LLC (Durango, Colorado) previously had conducted an open season for a 250,000-BBL/d pipeline from Weld County, Colorado, to Cushing, dubbed Rockies South. However, Rockies South has since been canceled, and Saddle Butte has announced its intent to jointly develop the 400,000-BBL/d Saddlehorn pipeline with Magellan Midstream Partners LP (NYSE:MMP) (Tulsa, Oklahoma).
A relative newcomer to the pipeline business is Rimrock Midstream (Dallas, Texas), which is developing another Colorado-to-Cushing pipeline--dubbed the Grand Mesa Pipeline--in conjunction with NGL Energy Partners LP (NYSE:NGL) (Tulsa, Oklahoma). Grand Mesa and Saddlehorn are both expected to be put into service in 2016, providing more than 500,000 BBL/d of Colorado-to-Cushing takeaway capacity.
View Project Report - 300189357
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
