Tallgrass Energy LP is gauging interest in capacity to ship crude from the Powder River Basin (PRB) to Cushing, OK, via the Pony Express and Iron Horse pipelines.
The open season, which no end date has been provided, is under a joint tariff between Pony Express and Iron Horse, an 80-mile, 16-inch diameter pipeline jointly owned by Tallgrass and Silver Creek Midstream LLC. Iron Horse can carry up to 200,000 b/d from Silver Creek’s Pronghorn station in Converse County, WY, to its Guernsey Terminal in Platte County, where it connects with Pony Express. The 830-mile Pony Express then carries about 400,000 b/d to Oklahoma, including three refineries on the route in Kansas and Oklahoma in 22- and 24-inch diameter pipe.
“We expect near-term production growth in the Powder River Basin, as well as additional production from the Bakken that makes its way to Guernsey,” Tallgrass’ Kyle Quackenbush, vice president of crude oil pipelines, told NGI’s Shale Daily. “Pony Express Pipeline is uniquely able to provide additional capacity out of Guernsey in the next several months.”
Pony Express plans to continue to evaluate long-term expansion opportunities as those basins develop, he said.
The offering coincides with an expansion of Pony Express capacity. Tallgrass COO William Moler said during the 2Q2019 earnings conference call that the expansion to bring capacity up to 420,000 b/d was on track to be completed during the summer. The Iron Horse pipeline was placed into service over the summer with an initial capacity of 100,000 b/d.
Demand for Pony Express crude capacity has been gaining momentum with the launch of other infrastructure expansions designed to alleviate takeaway constraints in the Denver-Julesburg Basin and the PRB. In mid-September, DJ South Gathering LLC launched a supplemental binding open season for a crude pipeline system that would be built in Colorado and connected to Pony Express, as well as the Saddlehorn and White Cliffs interstate pipelines.