DENVER—Crude oil delivery and exploration logistics for the Rockies is the name of the game for Tallgrass Energy Partners LP, according to Jeff Nelson, vice president and general manager of water, who spoke recently at Hart Energy’s DUG Rockies conference at the Colorado Convention Center.
The Lakewood, Colo.-based company, which operates in 10 states, holds 50% ownership in the REX Pipeline and 98% ownership in the Pony Express Pipeline. Tallgrass Energy Partners also own BNN Water Solutions with 92%.
“We have a Federal Energy Regulatory Commission [FERC]-regulated crude pipeline that runs from Guernsey, Wyo., to a terminal in Cushing, Okla. Our supply connections are to the Bakken and we have local receipt points to the DJ Basin and Powder River Basin,” Nelson said.
Tallgrass also has two FERC-regulated gas pipelines and storage systems, Tallgrass Interstate Gas Transmission (TIGT) and Trailblazer. “These two gas pipelines comprise about 5,000 miles and have a transportation design capacity of almost 2 million cubic feet per day with about 72% of transportation already under firm contract.”
The 764-mile Pony Express Pipeline carries crude from Guernsey, Wyo., to Cushing, Okla., with connections throughout the Rockies. The pipeline is designed to handle about 320,000 barrels per day (bbl/d). Over the last few months, according to Nelson, the company has been averaging about 288Mbbl/d.
Tallgrass also has processing and treatment plants near Douglas and Casper, Wyo., with a 3,500 bbl/d fractionator at the Casper plant. To the south in Weld County, Colo., there is a NGL takeaway plant running from the Redtail processing plant to the Overland Pass Pipeline.
“Our wall-to-wall gas pipeline, REX, recently started flowing gas in our Zone 3 in June of 2014. Zone 3 has an east-to-west capacity of 1.8 billion cubic feet per day [Bcf/d] and when the REX Zone 3 Capacity Enhancement project goes into service in the fourth quarter of 2016, that capacity will increase to about 2.6 Bcf/d,” Nelson said. “Today we could have it flowing both directions, east-to-west and west-to-east, running flat out at 1.8 Bcf.”
In Colorado, Tallgrass’ BNN Water Solutions division provides Rockies water sourcing and gathering, pipeline transport, storage and disposal with more than 90 miles of permanent pipelines that can handle up to 35 Mbbl/d of saltwater disposal capacity, 55 Mbbl/d of fresh water supply, 10 Mbbl/d of recycle capacity and 2.4 MMbbl/d of fresh water storage Nelson said.
In the current market, Nelson said Tallgrass wants to acquire noncore assets from E&Ps and expand its BNN water service to build infrastructure and commercially ship water gathering and disposal.
Meanwhile, the company’s terminal group has a terminal at Sterling, Colo., with 1.3 MMbbl of operational storage where the Guernsey to Sterling and Northeast Colorado Lateral segments of the Pony Express Pipeline intersect.
In third-quarter 2016, Tallgrass is expected to finish the Buckingham terminal, which is off Colorado’s Highway 14 in Weld County. Recently, the company acquired a 20% interest in the Deeprock Development Cushing terminal in Oklahoma, which has 2.25 MMbbl of capacity.
Larry Prado can be reached at firstname.lastname@example.org
Political swing states are among those hardest hit as oil and gas employment continues to fall, analyst says.
Chesapeake Energy separately said in a filing it plans to operate six to eight drilling rigs for the next two years, about half the 14 rigs active on average in the first quarter, as it battles a historic downturn in oil prices.
Even for the leanest, meanest oil and gas producer sitting on the best assets in the land, fate hinges on the nature of the recovery.