New Partner Joins Saddlehorn

Baker Hughes

A wholly owned subsidiary of Anadarko Petroleum Corp. has exercised its option to purchase a 20% equity interest in Saddlehorn Pipeline Co., resulting in the equity ownership in Saddlehorn at 40% Magellan Midstream Partners, 40% Plains All American Pipeline 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 Cushing, Okla.

The 20-inch pipeline will have an ultimate capacity to transport up to 400,000 barrels per day (bpd), but the initial capacity of the pipeline is expected to be closer to 200,000 bpd.

An extension to Carr, Colo., is also under consideration for connection to existing crude oil assets owned by Plains All American in that region. That lateral is being designed to provide additional shippers with flexible options and streamlined access into the Saddlehorn system, the companies said.

“Magellan and Plains are pleased to have Anadarko as a partner in the Saddlehorn pipeline,” Michael Mears, CEO, Magellan, and Greg Armstrong, CEO, Plains All American, said in a joint statement. “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 $800 million and $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.

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