SemGroup, Gavillon buy out Chesapeake stake in oil pipeline
BY ROD WALTON World Staff Writer
Thursday, October 11, 2012
10/11/12 at 2:34 AM
Read more stories on SemGroup
SemGroup Corp. and partner Gavillon LLC have bought out Chesapeake Energy Corp.'s 50 percent stake in the Glass Mountain Pipeline project to bring oil from the Mississippian Lime to the Cushing crude storage hub, Tulsa-based SemGroup announced Wednesday.
The revamped partnership gives both SemGroup and Gavillon 50 percent each in the 210-mile pipeline. Glass Mountain is expected to be completed by next fall.
The project originally was announced in May as a joint venture between Oklahoma City-based Chesapeake Energy, Omaha, Neb.-based trading firm Gavillon and SemGroup. SemGroup's spinoff, Rose Rock Midstream Partners LP, will operate the pipeline.
Glass Mountain Pipeline will include two laterals, one originating near Alva in Woods County and the other near Arnett in Ellis County. The laterals will intersect near Cleo Springs and continue east to Cushing.
The pipeline's initial capacity is expected to be about 140,000 barrels per day with 440,000 barrels of intermediate storage, according to reports. Chesapeake will maintain its long-term transportation agreement to move its crude oil production on the system, SemGroup said.
The joint SemGroup-Gavillon venture also will own 1 million barrels of storage capacity at the Cushing hub.
The Mississippi Lime is an oil-rich, historically developed limestone formation in northern Oklahoma and southern Kansas. Horizontal drilling has reopened the fields to many companies, including Chesapeake, Devon Energy Corp. of Oklahoma City and Tulsa-based Eagle Energy Co.
SemGroup has not disclosed a dollar amount on the Glass Mountain Pipeline construction.
Original Print Headline: SemGroup, Gavillon buy out pipeline
Rod Walton 918-581-8457
rod.walton@tulsaworld.com
Associated Images:
|
