A venture between SemGroup Corp. (>> SemGroup Corp), Gavilon Midstream Energy LLC and a Chesapeake Energy Corp. (>> Chesapeake Energy Corporation) affiliate plans to build a 210-mile pipeline in western and north central Oklahoma to deliver crude oil to a storage facility in Cushing, Okla.
The pipeline will have an initial capacity of 140,000 barrels per day and could have a maximum operating capacity of 180,000 barrels per day with the addition of more horsepower.
Construction should begin in July and service is expected to start in the third quarter of 2013.
Financial terms weren't disclosed.
SemGroup provides midstream services and Chesapeake produces oil and natural gas. Gavilon Midstream is a unit of Gavilon Group LLC, a commodity-management firm.
Plains All American Pipeline LP (>> Plains All American Pipeline, L.P.) in October publicly announced its unsolicited offer to buy SemGroup for $1 billion public after SemGroup rejected the bid. SemGroup has since adopted a poison pill with a 10% trigger to guard against hostile takeover attempts.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283; [email protected]