SemGroup Corp. and DCP Midstream LP launched an open season for the proposed Gladiator Pipeline, a converted pipeline that would transport light crude from the Cushing hub in Oklahoma to Houston and give producers in the Midcontinent and the Denver-Julesburg (DJ) Basin access to Gulf Coast markets.
Gladiator would create new crude oil capacity through the conversion of the existing Southern Hills Pipeline to crude oil service. It is expected to have 300,000 b/d of capacity and transport segregated, light batches of crude oil. Tulsa-based SemGroup and Denver-based DCP said pending sufficient binding commitments and following potential construction of new natural gas liquids (NGL) capacity by DCP, Gladiator may be operational by 3Q2020.
Potential shippers must submit binding commitments by 5 p.m. CT on January 31, 2019.
The project would originate at SemGroup's terminal at Cushing and end at its Moore Road junction in Houston, and would provide potential shippers with operational storage in Cushing and Houston. SemGroup added that proprietary storage may also be separately contracted for at its Cushing terminal and its Houston Fuel Oil Terminal Co. (HFOTCO) terminal.
Customers in the DJ Basin would gain access to the Gulf Coast through the existing White Cliffs Pipeline, which is operated by Rose Rock Midstream, a SemGroup subsidiary, and terminates at Cushing.
"We look forward to offering our DJ Basin customers an additional outlet for neat crude oil service out of the Cushing market with SemGroup," said DCP Commercial President Don Baldridge. "This opportunity allows us to potentially leverage a part of our Southern Hills' existing pipeline for our DJ and Midcontinent producers' benefit, while continuing to grow our [natural gas liquids] capacity in the region through additional Southern Hills pipeline looping projects."
SemGroup's David Minielly, vice president for crude operations, added that Gladiator would "offer customers seamless connectivity from the Rockies and Midcontinent to a vast network of marketing options," including the HFOTCO terminal. "Our ability to deliver neat light batches from Cushing to Houston provides shippers an advantage."
Prospective shippers should contact Grant Najera, Director of Commercial - Pipelines for SemGroup, at 918-524-8525 or firstname.lastname@example.org, and Nick Dark, Commercial Asset Manager for SemGroup at 918-524-7311 or email@example.com. At DCP Midstream, potential shippers should contact Brittany Wright, Business Development Manager, at 713-735-3657 or firstname.lastname@example.org.
Gladiator is the latest of several recent pipeline projects to connect Cushing to the Gulf Coast.
Last month, Tallgrass Energy LP signed a potential anchor shipper for its proposed 800,000 b/d Seahorse Pipeline, which would terminate at its refining complex in St. James, LA, and the planned Plaquemines Liquids Terminal in Louisiana. Meanwhile, Phillips 66 launched a binding open season for its proposed 400,000 b/d Red Oak pipeline, which would move crude from Cushing to Houston and Beaumont and Corpus Christi, TX.