Magellan Midstream Partners and Plains All American Pipeline LP reported that a wholly owned subsidiary of Anadarko Petroleum Corp. has exercised its option to purchase a 20% equity interest in Saddlehorn Pipeline Co. As a result of the announcement, Saddlehorn’s equity ownership would be Magellan 40%, PAA 40%, and Anadarko 20%.
Saddlehorn is a limited liability company that will construct, own, and operate the 20-in., 550-mile Saddlehorn pipeline system, which will transport as much as 400,000 b/d of various grades of crude oil from the DJ basin—and potentially the broader Rocky Mountain area resource plays—to storage facilities in Cushing, Okla., owned by Magellan and APP (OGJ Online, Feb. 27, 2015). The initial capacity of the Saddlehorn system is expected to be closer to 200,000 b/d.
An extension to Carr, Colo., also is under consideration for connection to existing crude oil assets owned by APP in that region. This lateral is being designed to provide additional shippers with flexible options and streamlined access into the Saddlehorn system.
The project is currently estimated to cost $800-850 million. Magellan will serve as construction manager and pipeline operator of the system, which subject to receipt of necessary permits and regulatory approvals, is expected to be operational by mid-2016.
