Joint venture will build 210-mile crude line

SemGroup Corporation, Gavilon Midstream Energy LLC, a subsidiary of The Gavilon Group LLC, and an affiliate of Chesapeake Energy Corporation announced plans to form a joint venture that will construct a 210-mile pipeline in western and north central Oklahoma which will deliver crude oil to a 1 MMbbl storage facility in Cushing, OK.

The pipeline and storage facility will meet growing midstream requirements resulting from the burgeoning drilling activity in western Oklahoma and the Mississippi Lime play.

The pipeline will consist of two laterals, one originating near Alva in Woods County, OK, and the other near Arnett in Ellis County, OK. The laterals will intersect near Cleo Springs in Major County, OK, where the pipeline will increase in diameter and continue east to storage at Cushing. The pipeline will have an initial capacity of 140,000 bpd, and following the addition of more horsepower, a maximum operating capacity of 180,000 bpd. Construction of the pipeline is planned to begin in July 2012, and it is expected to begin service in the third quarter of 2013.

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