Tallgrass Energy, LP’s (TGE) proposed Seahorse Pipeline is a few steps closer to reality as the midstream operator has secured an agreement with a third party that could be an anchor shipper and equity partner in the crude oil project, the midstream company said Monday.

The proposed 700-mile, 800,000 b/d Seahorse would carry crude oil from the Cushing hub in Oklahoma to the St. James, LA, refining complex and TGE’s planned Plaquemines Liquids Terminal (PLT) in Louisiana.

“The Seahorse agreement provides strong proof of concept for our pipeline project,” said TGE COO Bill Moler. “The market is excited about the versatility of Seahorse, which has multiple market options, including refinery demand in the St. James area and substantial export capability.”

An open season for Seahorse that was launched in August was due to run through Oct. 1, however, TGE then extended the open season first to Nov. 15 and most recently to Jan. 15. On an Oct. 31 call to discuss quarterly earnings, Moler said TGE had signed “between 40 and 50” confidentiality agreements for Seahorse.

“As with most projects of this size and scale, the process can and will be iterative when large commitments and long contract tenders are being contemplated,” he said.

Based on the level of interest TGE has received to-date and the “productive conversations” it is having, Moler said the company was “extremely optimistic” that the project would be commercialized in the near future. “While project economics improve notably at higher volumes, we currently believe the project will be accretive between 300,000 and 400,000 b/d of commitments.”

Meanwhile, TGE affiliate Tallgrass Pony Express Pipeline, LLC, will gauge shipper interest beginning Nov. 30 for crude oil transportation under a joint tariff between the Pony Express and Seahorse pipelines from Guernsey, WY, and Denver-Julesburg (DJ) Basin origin points to the St. James refinery complex and PLT.

Already, continued growth in the Powder River, DJ and Bakken producing regions has prompted TGE to carry out pump optimization projects to expand Pony Express capacity to carry up to 400,000 b/d by the end of the year. The midstreamer owns 98% of the pipeline. For November, Pony Express received record nominations in excess of 420,000 b/d, and management said it expected to move in excess of 365,000 b/d.

TGE also is in the middle of another open season running through Jan. 18 seeking shipper commitments for crude transportation service from Guernsey to refinery delivery points along the Pony Express system and to Cushing. Based on commitments received, capacity on the pipeline could be expanded up to an additional 300,000 b/d beyond what is expected once the pump optimization projects are completed. The expansion is expected to be staged over the next two years, with full-in service in 3Q2020.

In addition to the third-party agreement for the Seahorse project, TGE said it acquired more than 600 acres of land along the Mississippi River about 30 miles south of New Orleans that will serve as the site for PLT. The $30 million land acquisition was pursuant to an agreement between PLT and the Plaquemines Port and Harbor Terminal District.

PLT and the Plaquemines Port will work collaboratively to permit and construct the terminal, TGE said. As part of the transaction, the Plaquemines Port received a 50-acre tract that will serve as a conservation easement adjacent to the historic community of Ironton, and an additional portion of the site will be made available for the Mid-Barataria Sediment Diversion project, a critical restoration project that is part of Louisiana’s Master Plan to create a more sustainable coast.

“We are committed to being a good neighbor, and we demonstrated that with this land transaction that represents a win for all parties,” Moler said.

Plaquemines Port executive director Sandy Sanders echoed that sentiment, citing the expected jobs that will come along with the project. “Our board was quick to offer support to PLT because it is consistent with the Plaquemines Port’s vision to attract and enable projects that contribute to the economic well-being of Plaquemines Parish.”

When complete, PLT is expected to offer up to 20 million barrels of storage for both crude oil and refined products and export facilities capable of loading Suezmax and very large crude carriers vessels for international delivery.