crude oil takeaway pipelines

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.

On its surface, the development of small-diameter crude oil gathering pipeline systems in the Permian may seem like a ho-hum topic. In fact, though, these systems are at the heart of critically important strategies to ensure the reliable, low-cost flow of crude to multiple takeaway pipelines out of the basin, and thereby enhance the oil’s value and minimize financial risk. A case in point is the 50-mile-plus, 100-Mb/d-capacity gathering system that a producer/midstreamer joint venture has been building in the Delaware Basin along the Texas/New Mexico line. Today, we continue our series on Permian gathering systems with a look at WPX Energy and Howard Energy Partners’ new pipes in New Mexico’s Eddy County and Texas’s Loving and Reeves counties.