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Genesis open season to support new crude gathering system

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World Pipelines,

Genesis Energy, L.P. has announced it has launched a binding open season to secure long-term commitments to support a new gathering system to connect crude oil production to its existing Powder River basin pipeline. The Powder River basin pipeline, which is wholly owned and operated by subsidiaries of Genesis, provides producers in Wyoming’s emerging Powder River basin access to multiple attractive markets, including additional downstream markets at Guernsey (Wyoming), regional refineries and/or west, east and gulf coast markets via the Pronghorn Rail loading terminal directly connected to both the Union Pacific and BNSF railroads.

The gathering system is supported by a new contract with one of the leading operators in the Powder River basin. The operator will dedicate approximately 150 000 acres to the gathering system and the Powder River basin pipeline for a period of 10 years. Additionally, the operator has extended the term of its existing contracts, in which it previously dedicated approximately 150 000 acres to the Powder River basin pipeline, for a period of 10 years. Production from the previously dedicated acreage is currently gathered by a third party.

“Our proposed gathering system will enhance our connectivity directly to well pads, thus eliminating the need for trucking and provide a seamless wellhead to market pipeline solution. We are excited to expand our relationship with one of the leading operators in the basin, which now has made long-term commitments of the production from approximately 300 000 acres for downstream transportation on our existing infrastructure,” said Grant Sims, CEO of Genesis. “The basin continues to see increasing drilling activity and our existing Powder River basin pipeline is well positioned to provide reliable deliveries to multiple attractive downstream markets.”

The pipeline

The Powder River basin pipeline includes approximately 140 miles of transmission pipeline spanning portions of Campbell, Converse, Niobrara and Platte counties. Subsidiaries of Genesis also own over 300 miles of legacy low pressure crude oil gathering pipelines in Converse and Niobrara counties, as well as four truck and storage terminals near the Wyoming towns of Wright, Bill, Douglas and Guernsey, with over 800 000 bbls of storage capacity currently in service or under construction. Genesis also has permits in hand to expand its storage capacity by over 1 million bbls with additional tankage in Campbell, Converse and Platte counties.

Open season information

The open season commenced on 27 November 2017 at 8:00 a.m. CST and will end on 22 December 2017 at 5:00 p.m. CST. Existing shippers with effective acreage dedication transportation services agreements (TSA) with Powder River Crude Services, LLC and Powder River Express, LLC will have the option to participate in the open season for the purpose of amending their existing TSAs to add additional acreage to be dedicated to the gathering system. To be eligible for this option, shippers must extend the primary term of the existing Powder River basin pipeline TSAs commensurate with the term of the gathering agreement.

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