A pipeline to ship Colorado crude oil to Oklahoma will proceed despite the financial problems of its developer, SemGroup LP.
A federal bankruptcy-court judge this week approved an agreement between a unit of Tulsa, Okla.-based SemGroup and two other companies that will allow work to continue on the 524-mile White Cliffs pipeline.
The 12-inch line, originating in Platteville, will move oil from eastern Colorado and other Rocky Mountain locations to storage terminals in Cushing, Okla.
Building the pipeline is “incredibly important” for Rocky Mountain oil producers because of a current shortage of shipping capacity, said Tad True, vice president of Casper-based Bridger Pipeline LLC.
“We have so much oil production coming on line, and there are no routes to ship it out,” he said.
SemGroup filed last week for bankruptcy protection, citing a severe liquidity crisis after incurring at least $2.4 billion in energy-trading losses.
Lender General Electric Capital then filed suit, alleging that SemGroup subsidiary SemCrude siphoned $54 million out of a loan fund for the pipeline into the parent company’s cash-starved operations.
The bankruptcy court ordered SemCrude to open all books, permits and contracts involving the pipeline and to not pay expenses or buy and sell any assets without approval from PE-Pipeline Services, a partner in the project.
Steve Raabe: 303-954-1948 or sraabe@denverpost.com
