JP Energy Development, an affiliate of JP Energy Partners, has signed a 15-year agreement with Tug Hill Operating to transport crude oil from south-central Kansas to Cushing, Okla., via the Kansas Express, a new interstate crude oil pipeline. Tug Hill Operating, focused primarily on the Mississippian Lime play in Kansas, will dedicate 600,000 acres to JP Energy Development to move oil to market. The Kansas Express will be the second pipeline in the Mississippian Lime play for JP Energy Development. The new pipeline will have capacity to take on additional producers.
“The new pipeline provides Tug Hill Operating access to the Cushing market and limits the number of trucks on Kansas roads”
“This is a significant development for oil producers in northern Oklahoma and Kansas who will have additional means to move their product to market quickly and efficiently,” stated J. Patrick Barley, president and chief executive officer, JP Energy Partners. “JP Energy Development can now expand our presence in the Mississippian Lime play in partnership with Tug Hill Operating, whose management and owners have an extremely successful track record of developing oil and gas assets in the U.S.”
The new Kansas Express pipeline moves crude oil to Cushing. Existing crude pipeline infrastructure in Kansas does not accommodate near- or long-term oil production from the Mississippian Lime play to Oklahoma without extensive trucking.
“The new pipeline provides Tug Hill Operating access to the Cushing market and limits the number of trucks on Kansas roads,” stated Michael Radler, president and chief executive officer, Tug Hill Operating. “JP Energy Development has a proven track record of reliable service and a focus on customers that is attractive to Tug Hill Operating. They are our preferred pipeline company, and we hope other Kansas producers will find opportunities to use them as well.”
JP Energy Development plans to commence an open season in the coming weeks seeking additional producer commitments, with a plan to begin construction on the first phase of the Kansas Express in the first quarter of this year. The final design capacity of the pipeline will be determined after the completion of the open-season process for all prospective shippers in Kansas. Initially, the Kansas Express pipeline is expected to be approximately 12 inches in diameter and is expected to be in service by January 2014. Future phases of the project are expected to extend the pipeline north to Gove County, Kan. and east to Kingman County, Kan.
Source: Business Wire
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