Crude oil and associated gas production volumes from the Denver-Julesburg (DJ) play in the Niobrara Shale have been climbing in recent months, and drilling activity suggests more growth is on the way. In response, Tallgrass Energy Partners last month proposed two related projects — the Cheyenne Connector pipeline and REX Cheyenne Hub Enhancement — to increase capacity and liquidity at the Cheyenne Hub, a key trading and pricing location for the DJ basin. The projects potentially would push more gas onto Tallgrass’s bidirectional, cross-country Rockies Express Pipeline (REX) east, in direct competition with other growing supply regions. In today’s blog, we take a closer look at Tallgrass’s plans to increase takeaway capacity out of the DJ basin.
Through the first half of the 2010s, oil production from the Niobrara Shale in Colorado and Wyoming — including the Denver Julesburg (DJ) and Powder River Basin (PRB) plays — rose rapidly. As we covered in our blogs Hey Mr. DJ, Keep Playing That Song, Part 1 and Part 2, by 2014, competition for existing oil pipeline capacity in the region was intensifying and it was clear that more capacity would be needed if the infrastructure in the region was to support more production growth. After oil prices crashed in late 2014, production went into decline as drilling activity was slashed. But new oil pipeline capacity — through a combination of acquisitions, conversions, and new-builds — was already on its way. We detailed this build-out in Colorado (G)Oil, including Tallgrass’s Pony Express Pipeline (see This Pony Knows More Than One Trick).
RBN Energy’s South Texas Energy Infrastructure Map brings together all the pieces of the critical and complex puzzle of the greater Corpus Christi region. Spanning from Point Comfort, TX to Corpus Christ, TX and south of the Agua Dulce natural gas hub, the map details the processing, transportation and export facilities in RBN Energy’s classic clear, concise and easy to comprehend style.
Now, in 2017, with oil prices ambling above $50/bbl, the rig count in the DJ has doubled in the past year, and crude oil production has been growing modestly in recent months. Most of the activity in the play is concentrated in super-hot Weld County, CO, where 23 of the DJ Basin’s 26 active rigs are operating. In terms of output, data from the Energy Information Administration (EIA) shows oil production in Colorado averaged 342 Mb/d this past July (the latest EIA data available), which is up 17% from the recent low of 292 Mb/d in February 2017, and just under the all-time monthly record of 346 Mb/d (set in August 2015, before the declines took hold). Moreover, with oil pipeline takeaway capacity additions over the past few years, there’s ample room for it to grow further and bring with it more associated gas volumes. There lies the impetus behind Tallgrass’s Cheyenne Connector and REX Cheyenne Hub Enhancement projects.
The REX Cheyenne Hub, located in the heart of the DJ, comprises interconnects of seven pipeline systems that converge in northern Weld County, CO, near the northeastern border of Colorado and Wyoming. Those include Tallgrass’s REX mainline going east and west, Tallgrass Interstate Gas Transmission system (TIGT), Tallgrass’s Trailblazer, Kinder Morgan’s Cheyenne Plains, Colorado Interstate Gas (CIG) and Wyoming Interstate Co. (WIC) pipeline systems, as well as Xcel Energy’s Public Service Co. (PSCO). Historically, REX’s pool point at the Cheyenne Hub has received little to no supply from the DJ, because the interconnecting pipelines all operate at a lower pressure than REX. Tallgrass is looking to change that with its REX Cheyenne Hub Enhancement project, which proposes booster compression and modifications to its header system and interconnects in order to allow bidirectional flow between REX and the third-party pipelines at the hub.
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About the song
“Brand New Day” was written by Sting and appears as the 10th song on Sting’s sixth solo studio album of the same name. Released as a single in September 1999, it went to #2 on the Billboard Adult Alternative and #3 on the Billboard Bubbling Under Hot 100 Singles charts. The song won a Grammy Award for Best Male Pop Vocal Performance in 2000. Stevie Wonder played the harmonica solo on the song. Personnel on the record were: Sting (vocals, bass, Roland VG-8 guitar synthesizer), Kipper (keyboards, drum programming), Jason Rebello (acoustic piano, Claivinet), Don Blackman (Hammond organ), David Hartley (Hammond organ, string arrangements, conductor), Dominic Miller (guitar), B.J. Cole (pedal steel guitar), Vinnie Colaiuta, Manu Katche (drums), Mino Cinelo (percussion), Ettamri Mustapha (darbouka), Branford Marsalis (clarinet), Chris Botti (trumpet), Kathryn Tickell (Northumbrian pipes, fiddle), Stevie Wonder (harmonica), and Farhat Bouallagui (string arrangements).
The album Brand New Day was recorded from June 1998-June 1999 at The Villa Il Palagio in Tuscany; Studio Mega in Paris; Right Track Recording and Avatar Studios in New York City; and Air Lyndhurst Hall in London. Produced by Sting and Kipper, the album was released in September 1999. It went to #9 on the Billboard 200 Albums chart and has been certified 3x Platinum by the Recording Industry Association of America. The LP won a Grammy Award for Best Pop Vocal Album in 2000. Three singles were released from the album.
Sting (Gordon Matthew Thomas Sumner) is an English musician, singer, songwriter and actor. He was the front man, singer and bassist for The Police from 1977 to 1984. He launched his solo career in 1985 with music that includes elements of worldbeat, jazz, reggae, new age and pop. With The Police, he released five studio albums, two live albums, four soundtrack albums, seven compilation albums, one EP and 26 singles. The Police sold more than 100 million records worldwide. As a solo artist Sting has released 15 studio albums, six live albums, seven soundtrack albums, 10 compilation albums, five EPs and 51 singles. He has won 25 American Music Awards, three Brit Awards, one Billboard Music Award, one Golden Globe Award, 18 Grammy Awards, seven Ivor Novello Awards and two MTV Video Music Awards. He is a recipient of Kennedy Center Honors and is a member of the Songwriters Hall of Fame. Sting was inducted into the Rock and Roll Hall of fame as a member of The Police in 2003. He has been a featured player in 18 motion pictures and appeared in several television show. He has also appeared in three Broadway shows. He continues to record and tour.
