HOUSTON (Reuters) - Tallgrass Energy Partners LP (N:TGE) and Kinder Morgan Inc (N:KMI) on Tuesday agreed to lift crude transport capacity from Wyoming and Colorado to the U.S. oil storage hub in Cushing, Oklahoma and other markets.
The project would combine Tallgrass's Pony Express pipeline and portions of Kinder's Wyoming Interstate Company and Cheyenne Plains Gas pipeline running from the Powder River and Denver-Julesburg basins to the companies' Deeprock terminal in Cushing.
The companies also agreed to build an additional 200 miles (322 km) of new pipeline, convert natural gas takeaway capacity to oil and add capacity to the Williston Basin in North Dakota and parts of Western Canada.
The combined system would carry 800,000 barrels per day (bpd) of light crude and 150,000 bpd of heavy crude to the terminal, beginning service in the second half of 2020.
From Cushing, shippers could send crude to U.S. Gulf Coast markets through Tallgrass's planned Seahorse pipeline, the companies said. Tallgrass's open season on the Seahorse, originally set to conclude on Friday, was extended to Feb. 28 last week.
"Shippers benefit by gaining access to a pipeline system that can source from multiple basins and access numerous demand markets," Tallgrass Chief Operating Officer Bill Moler said in a statement.