Anadarko Unit Exercises Option To Buy 20% Equity Interest In Saddlehorn Pipeline

(RTTNews) - Magellan Midstream Partners (MMP) and Plains All American Pipeline, L.P. (PAA) Wednesday said that a wholly owned subsidiary of Anadarko Petroleum Corp. (APC) has exercised its option to purchase a 20 percent equity interest in Saddlehorn Pipeline Co.

As a result, the equity ownership in Saddlehorn will be 40 percent Magellan, 40 percent Plains and 20 percent Anadarko.

Saddlehorn is a limited liability company that will construct, own and operate the Saddlehorn pipeline, a 550-mile pipeline that will transport various grades of crude oil from the DJ Basin, and potentially the broader Rocky Mountain area resource plays, to storage facilities in Cushing, OK owned by Magellan and Plains.

The 20-inch pipeline will have an ultimate capacity to transport up to 400,000 barrels per day or bpd, but its initial capacity is expected to be closer to 200,000 bpd.

The project is currently estimated to cost between $800 million and $850 million. Magellan will serve as construction manager and pipeline operator of the Saddlehorn system. The Saddlehorn pipeline is expected to be operational during mid-2016.