Tallgrass Energy LP, Leawood, Kan., and Silver Creek Midstream LLC, Irving, Tex., will expand their Powder River basin joint venture to own the Iron Horse Pipeline, the Powder River Express Pipeline (PREP), and crude oil terminal facilities in Guernsey, Wyo. Tallgrass will operate Powder River Gateway LLC with 51%. Silver Creek will own 49%.
Both Iron Horse and PREP will transport crude produced in the PRB from Silver Creek’s Pronghorn Terminal to Guernsey, Wyo. where the crude oil has access to Tallgrass' Pony Express crude pipeline system and two other existing takeaway pipelines.
Iron Horse is a joint venture of Tallgrass and Silver Creek formed to transport crude oil from the PRB to the Guernsey oil hub (OGJ Online, Feb. 8, 2018). The 80-mile, 16-in. pipeline currently under construction will have an initial capacity of 100,000 b/d and is expandable to 200,000 b/d. It is expected to be in-service in first-quarter 2019. PREP is a 70-mile, 12-in. crude pipeline with a current capacity of 90,000 b/d expandable to 125,000 b/d. The crude oil terminal facilities in Guernsey collectively own more than 340 acres and include 370,000 bbl of crude storage currently in-service and, once fully constructed, will include more than 1 million bbl of storage. Powder River Gateway has existing interconnections to Pony Express, two other takeaway pipeline connections, and can access any other current or future markets at Guernsey.
Combining its existing system with its recent acquisition of additional PRB oil assets, Silver Creek will own and operate 120 miles of existing pipeline with over 330,000 acres dedicated from basin producers (OGJ Online, Oct. 11, 2018).
Tallgrass, which owns and operates Pony Express and is developing both the Seahorse Pipeline and Plaquemines Liquids Terminal projects, provides downstream market access for PRB producers.
The joint venture intends to create joint tariffs with Pony Express and Seahorse Pipeline, providing Iron Horse and PREP shippers transportation from Silver Creek’s Pronghorn Terminal to Cushing, Okla., St. James, La., export markets through Plaquemines Liquids Terminal, and more than 3 million b/d of refining demand directly connected to Pony Express or Seahorse.
Additionally, Tallgrass is pursuing expansion projects on Pony Express over the next few years, with the initial pump upgrades coming online this year. Pony Express plans to launch an open season for additional expansion capacity out of Powder River Gateway’s Guernsey facility in November.
