40 Miles from Denver, Part 3 - Crude Quality Drives Build-Out of Taproot's D-J Basin Gathering System

Private equity is playing a critically important role in the build-out of crude oil gathering systems in the Denver-Julesburg (D-J) Basin, where rising production volumes — and the expectation of further growth, especially in and around Weld County, CO — are spurring a number of major projects. For proof, you need look no further than ARB Midstream, which, with backing from Ball Ventures’ BV Natural Resources, has developed the largest privately held crude transportation and storage network in the D-J through a combination of acquisitions and new construction. Producers have dedicated a quarter of a million acres to it. Today, we continue a series on crude-related infrastructure in the D-J with a look at ARB Midstream’s fast-expanding asset base there.

The Denver-Julesburg Basin in northeastern Colorado and southeastern Wyoming has been producing crude oil for many decades now, but there were only a few crude gathering systems there until just the past three or four years, which were marked by a rapid ramp-up in production associated with the Shale Revolution. The development of these systems was spurred by producers’ desire to more efficiently and cost-effectively transport increasing volumes of crude from their new horizontal wells to new and expanded takeaway pipelines. The gathering systems have been built and added to over time by a combination of entities –– producers themselves, midstream affiliates of producers, and independent midstream companies, many of them backed by private equity. Today, we discuss highlights from our new Drill Down Report on D-J Basin crude oil gathering systems.

Transporting crude oil from the lease to refineries and export docks is like a long-distance relay race. The crude oil gathered from several wells is handed off to shuttle or takeaway pipelines, which then pass it on to regional crude hubs like Cushing, OK — from the hubs, crude is transferred to still other pipes. To get the relay going, the developers of crude gathering systems work closely with their takeaway pipeline counterparts to figure out the most efficient way to effect the first baton pass. Today, we continue our series on crude-related infrastructure in the Rockies’ Denver-Julesburg (D-J) Basin with a look at Outrigger Energy’s existing and planned gathering systems, and their connections to Tallgrass Energy’s still-expanding Pony Express takeaway pipeline.