Tallgrass Energy and Kinder Morgan announced an agreement on Tuesday to jointly develop a solution that would increase existing crude oil takeaway capacity in the growing Powder River and Denver- Julesburg basins while adding incremental capacity to the Williston Basin and portions of Western Canada.
The proposed venture would include both existing and newly constructed assets. Tallgrass would contribute its Pony Express Pipeline System while Kinder Morgan would contribute portions of its Wyoming intrastate Company and Cheyenne Plains Gas Pipeline. The company then intends on beginning the process of abandonment and conversion of those assets to crude oil service.
200 miles of new pipeline will also need to be constructed to provide crude oil deliveries into Cushing, Okla.
The combined project is expected to provide initial service as early as the second half of 2020, however completion of the transaction between Tallgrass and Kinder Morgan remains subject to conditions such as receipt of applicable state and federal regulatory approvals, among other items.