Denver-Julesberg

New crude oil pipelines expected online this fall are set to unlock congestion in the Rockies that has built up over the past three years. During that time, growing volumes of Canadian, Bakken and local production have descended on the Guernsey, WY trading hub that is the regional crude distribution center. The new pipelines will increase takeaway capacity from North Dakota and Montana to Cushing via Guernsey. They will also make room for more Canadian barrels travelling to market through the Rockies and for rising local production. Today in the first of a two part series we look at the existing and new pipeline infrastructure into and out of Guernsey.

January 2013 oil production from the Denver-Julesburg and Powder River Basin Niobrara Shale plays in Colorado and Wyoming was 170 Mb/d (Bentek estimate). Operators in the Niobrara have been running hot and cold on the play ever since a gusher in Weld County, CO hit the headlines in October 2009 by producing 550 b/d in its first ninety days. Some like Chesapeake have sold assets; others like Noble Energy expect their oil production to increase significantly in 2013. Today we check out the current sentiment on this Rockies play.