TULSA, Okla.--(BUSINESS WIRE)-- A subsidiary of SemGroup(R) Corporation (NYSE:SEMG), an affiliate of Chesapeake Energy Corporation (NYSE:CHK), and Gavilon, LLC, today announced the formation of Glass Mountain Pipeline LLC and the signing of definitive agreements to build the previously announced 210-mile crude oil pipeline. Construction of the pipeline is expected to begin this summer and be commissioned in the fall of 2013.
The new pipeline, constructed by SemGroup, will have an initial capacity of approximately 140,000 barrels per day and 440,000 barrels of intermediate storage. The pipeline will consist of two laterals. One lateral will originate near the town of Alva in Woods County, Oklahoma. The second lateral will originate near the town of Arnett in Ellis County, Oklahoma. The pipeline will increase in diameter where the laterals intersect near Cleo Springs in Major County, Oklahoma and continue east to Cushing, Oklahoma. The pipeline will terminate at Gavilon's Cushing facility, where the joint venture will own one million barrels of crude oil storage. Following pipeline construction, Rose Rock Midstream, LP (NYSE:RRMS), SemGroup's master limited partnership, will serve as the pipeline operator.
Chesapeake Energy has entered into a long-term transportation agreement with Glass Mountain Pipeline to provide the economic incentive to construct the pipeline. The pipeline system is expected to meet growing and diverse midstream requirements resulting from the drilling activity in western Oklahoma and the Mississippi Lime play.