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Tallgrass offers crude storage after storm

06 Sep 2017 21:12 (+01:00 GMT)
Tallgrass offers crude storage after storm

Houston, 6 September (Argus) — Tallgrass Energy will allow up to 600,000 bl of committed volume in September on the Pony Express pipeline to be stored in the short term as "working inventory" amid uncertainty of oil markets in the aftermath of Hurricane Harvey.

Up to 200,000 bl of Bakken, 300,000 bl of Niobrara and 100,000 bl of Mixed Sweet (MXS) previously scheduled for delivery to Cushing, Oklahoma, in September can be shipped to the Deeprock South terminal for return in October, Tallgrass said late last week in a notice to shippers.

Eligible shippers can submit nominations until 5:00pm ET today, listing requested volume, grade and origin of the crude nominated. Final allocations will be awarded by the end of Friday.

The company in early August acquired Outrigger Energy's crude gathering system in the Powder River basin and plans to convert an underutilized gas segment owned by subsidiary Tallgrass Interstate Gas Transmission from Labonte, Wyoming, to Guernsey into a crude transportation line. Tallgrass will construct a new pipeline from Labonte to the Outrigger system and add laterals into other producing areas of Powder River to provide direct access from the gathering system to Pony Express.