Several pipelines traverse the Niobrara play, but only one is a major oil system. In Colorado's D-J Basin, SemGroup Inc.'s much anticipated 526-mile, 12-inch-diameter White Cliffs pipeline now provides about 30,000 barrels of oil take-away from the area into the oil hub at Cushing, Oklahoma.

A year ago, Noble Energy and Anadarko were enthusiastic about hooking up to the system. Both operators subscribed to 10,000 barrels daily.

"There have been times when we had to shut in wells up to a week at a time because the area lacked sufficient refining capacity," says Anadarko's facilities engineer Joe Aucoin, from his office at the White Cliffs' connect near Plattesville. "It's huge for us."

At the time, price realizations in the field were expected to improve by as much as $6 per barrel, thanks to cost efficiencies from the new pipeline, according to Anadarko. Field-wide, savings are a potential $65 million per year at the pipeline's capacity, according to Wood Mackenzie.

White Cliffs will not only provide producers such as Anadarko and Noble Energy with access to more markets and potentially higher prices for their crude, but also nearby oil-polishing facilities see reduced costs that were previously incurred in hot-oiling processes at the individual lease sites.

Other benefits of the pipeline include reduced air emissions from truck traffic, which used to be the transportation mode for take-away from the play, and an onsite centralized truck facility.

The common carrier originates in Platteville, Colorado, northeast of Denver, and terminates at SemCrude's storage facility in Cushing. It has 100,000 barrels of crude oil storage in Platteville, adjacent to SemCrude's 10-bay truck-unloading facility with 20,000 barrels of crude oil storage.

White Cliffs is the only line connecting the DJ Basin directly to Cushing. Despite its single-pump stations design, the pipeline is expandable to 50,000 barrels per day. White Cliffs is a major asset for SemGroup, the company that recently emerged from reorganization brought about by its 2009 Chapter 11 bankruptcy.

Operators were also anticipating significant increased take-away capacity for natural gas liquids (NGLs). The DJ Basin Lateral Pipeline, which began operations in March 2009, is a 125-mile NGL line connecting the DJ Basin with the Overland Pass Pipeline.

The 760-mile Overland line can transport 110,000 barrels of NGLs per day. It runs from Opal, Wyoming, to Conway, Kansas.

The pipeline's capacity is 55,000 barrels per day from existing gas processing facilities in the DJ Basin. Such gas processing facilities include DCP Midstream's Lucerne and Mewborne plants.

Additionally, DCP's Platteville and Greeley facilities are connected to Mewborne. Increasing NGL production in the Rocky Mountain region correlates with increasing gas development.

"With the Overland and DJ Lateral in place, take-away constraints are lifting for producers," says Roz Elliot, director of public affairs for DCP Midstream, Denver.

The new capacity provides a valuable additional outlet for NGLs from the field, agrees Ben MacFarlane, NGLs analyst with Bentek Energy.

Previously, the field's NGLs had to travel on the Phillips Petroleum line down to Borger, Texas, or be trucked to alternative markets in Kansas.

Continue reading the full article on Hart's Unconventional Gas Center.

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