Tallgrass Energy Partners, Leawood, Kan., and Silver Creek Midstream LLC, Irving, Tex., will jointly develop a crude oil pipeline for Powder River basin production in Wyoming.
The 80-mile, 16-in. Iron Horse Pipeline will connect a gathering system and terminal in Converse County with a terminal Tallgrass is building at Guernsey in Platte County.
About half the pipeline will be new. The other half will be converted gas pipeline.
Tallgrass has agreed to contribute the gas-conversion segment, between Labonte and Guernsey, now owned by Tallgrass Interstate Gas Transmission LLC.
It operates a crude line connect to the Guernsey terminal, Pony Express.
In conjunction with formation of the joint venture, Tallgrass has agreed to sell its 50-mile Powder River basin gathering system to Silver Creek, which plans further construction.
The acquired and expanded gathering system will feed the Silver Creek Midway Terminal, which will deliver crude into Iron Horse.
The pipeline will have initial capacity of 100,000 b/d of crude and can be expanded.
Tallgrass will operate and own 75% of the system. Silver Creek will own the remainder.
