Magellan Midstream Partners and Plains All American Pipeline, L.P. announced today that a wholly owned subsidiary of Anadarko Petroleum Corporation has exercised its option to purchase a 20% equity interest in Saddlehorn Pipeline Company. As a result of today's announcement, the equity ownership in Saddlehorn will be 40% Magellan, 40% Plains and 20% Anadarko.
Saddlehorn is a limited liability company that will construct, own and operate the Saddlehorn pipeline, an approximately 550 mile pipeline that will transport various grades of crude oil from the DJ Basin, and potentially the broader Rocky Mountain area resource plays, to storage facilities in Cushing, OK owned by Magellan and Plains. The 20 in. pipeline will have an ultimate capacity to transport up to 400 000 bpd, but the initial capacity of the Saddlehorn pipeline is expected to be closer to 200 000 bpd.
An extension to Carr, CO is also under consideration for connection to existing crude oil assets owned by Plains in that region. This lateral is being designed to provide additional shippers with flexible options and streamlined access into the Saddlehorn system.
"Magellan and Plains are pleased to have Anadarko as a partner in the Saddlehorn pipeline," said Michael Mears, Magellan's Chief Executive Officer and Greg L. Armstrong, Chairman and Chief Executive Officer of Plains All American. "Anadarko is a committed shipper and has a significant production presence in this region, adding further value to the pipeline project to deliver crude oil to the Cushing hub."
The project is currently estimated to cost between US$800 million and US$850 million. Magellan will serve as construction manager and pipeline operator of the Saddlehorn system. Subject to receipt of necessary permits and regulatory approvals, the Saddlehorn pipeline is expected to be operational during mid-2016.
Adapted from press release by Hannah Priestley-Eaton