In conjunction with Bonanza Creek’s dedication of nearly 70,000 gross acres (subject to Bonanza Creek’s pre-existing dedications), Taproot will extend its existing multi-service midstream system (the “Baja System”) approximately 35 miles south (the “Rattlesnake Extension”) to transport Bonanza Creek’s crude oil to Taproot’s Baja System for re-delivery at Tallgrass Energy Partners’ (NYSE: TGE) Buckingham Terminal (the “Buckingham Terminal”), with ultimate delivery to Cushing
Image: Taproot Energy Partners executes long-term crude oil transportation agreement with Bonanza Creek Energy. Photo: courtesy of rawpixel from Pixabay.
Taproot Energy Partners, LLC announced today that its affiliate, Taproot Rockies Midstream, LLC (“Taproot”) has secured a long-term acreage dedication for crude oil transportation from Bonanza Creek Energy Operating Company, LLC, a subsidiary of Bonanza Creek Energy, Inc., a publicly traded crude oil and natural gas producer with a substantial acreage position concentrated in rural, unincorporated Weld County, Colorado within the DJ Basin.
In conjunction with Bonanza Creek’s dedication of nearly 70,000 gross acres (subject to Bonanza Creek’s pre-existing dedications), Taproot will extend its existing multi-service midstream system (the “Baja System”) approximately 35 miles south (the “Rattlesnake Extension”) to transport Bonanza Creek’s crude oil to Taproot’s Baja System for re-delivery at Tallgrass Energy Partners’ (NYSE: TGE) Buckingham Terminal (the “Buckingham Terminal”), with ultimate delivery to Cushing.
Delivery to the Buckingham Terminal is expected to provide shipper customers premium pricing for “Niobrara–spec” crude oil barrels (42-degree gravity and below). The Bonanza Creek commercial agreement increases the total acreage dedicated to Taproot’s Baja System to nearly 175,000 gross acres. In addition to the Rattlesnake Extension, Taproot also intends to construct a truck unloading and storage facility strategically located to provide its producer and marketing customers with a premium crude oil delivery point in Weld County.
“The Rattlesnake Extension is a transformational project for Taproot, creating the opportunity to expand our existing Baja System and become the first independent pipeline solution in the prolific northeast Wattenberg area to provide producers with direct pipeline access to the Buckingham Terminal. Taproot’s ability to transport crude oil to what is currently a premium market at the Buckingham Terminal creates opportunities to attract additional barrels to our expanded pipeline infrastructure. The Rattlesnake Extension strategically positions Taproot for continued growth of our pipeline assets, as our company’s business development efforts attract additional acreage dedications to the Taproot pipeline,” said Kevin Sullivan, Taproot CEO.
“Taproot looks forward to supporting Bonanza Creek’s planned growth and expansion in the core of the northeast Wattenberg over the term of the agreement,” said Rod Donovan, Taproot COO. “The in-service date for the expansion project is expected to be in the second quarter of 2020.”
Source: Company Press Release