The main focus of this video is a deep dive into the Pony Express Pipeline, which has a complex history that began with its partial conversion from a natural gas pipeline in 2014. Initially, it consisted of a 20-inch segment from Guernsey, WY, to Sterling, CO, a 22-inch section to Natoma, KS, and a new 24-inch pipeline to Cushing, OK, resulting in capacity telescoping issues. To address this, Pony Express expanded with supply laterals, such as the Northeast Colorado Lateral and, later, the Hereford, Carpenter, and Platteville laterals, to pull more barrels from the DJ Basin. Despite these efforts, the pipeline faced overcapacity in the region due to competition from pipelines like Saddlehorn and Grand Mesa, leading to a significant tariff drop in 2019/2020 after the initial five-year agreements expired.
In 2021, an expansion featuring a new 24-inch pipeline from Guernsey, WY, to Buckingham, CO, alleviated a major bottleneck in the Pony Express mainline. This new line boosted capacity, which is now allocated to a new leasing entity called Seahorse Pipeline. The current capacity of the Pony Express mainline is estimated at around 400,000 barrels per day without drag-reducing agents (DRAs), or up to 500,000 barrels per day with DRAs, though low tariffs make the use of DRAs less economical. Pony Express’s strategic expansions are particularly intriguing when viewed alongside Bridger’s. Both pipelines appear to have bottlenecks that, if resolved, could unlock a significant amount of additional capacity.
Looking ahead, Part Three of the series will explore the competitive dynamics between the Bridger-Pony Express joint tariff and the Dakota Access Pipeline, focusing on rates and delivery market advantages.
0:00 Introduction and Beta Testing
1:09 Review of Bridger Pipeline from Part One
3:10 Pony Express Pipeline Introduction
4:07 Pony Express Initial Build
6:10 Pipeline Capacity Overbuild
9:25 Supply Lateral Build
11:05 New 24-inch Pipeline
14:29 Seahorse Pipeline
17:15 Year 2019 Tariff Cliffs
20:20 Summary/Conclusion
21:35 Part 3 Preview
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