TULSA — Increased production of crude oil and natural gas in the Mid-Continent region is helping SemGroup Corp. fill its pipelines and storage tanks, pushing the company to the No. 9 position on this year's Oklahoma Inc. list.
SemGroup also is beginning to see the benefits of spinning off a master limited partnership, Rose Rock Midstream LP, in an initial public offering at the end of 2011. Rose Rock is a crude oil pipeline and storage partnership that has about 7 million barrels of oil storage in Cushing. SemGroup owns 57 percent of the partnership.
SemGroup describes its assets as being in the “liquids fairway” of the Mid-Continent, an area stretching from western Alberta, Canada, through the central United States to Texas. It includes storage and pipelines in what SemGroup calls “celebrity plays” in North Dakota, Colorado, Kansas and Oklahoma.
“SemGroup's facilities are strategically located in these celebrity plays, and we have been actively growing our infrastructure to support the increasing oil and gas production in the United States and Canada,” said Norm Szydlowski, president and chief executive officer.
The company also has asphalt terminals in Mexico and storage tanks in the United Kingdom. SemGroup and Rose Rock combined have 700 employees worldwide, including more than 150 employees in Oklahoma.
Cushing, the “pipeline crossroads of the world,” is a top focus for SemGroup and Rose Rock. SemGroup recently partnered with Chesapeake Energy Corp. and Gavilon on the planned Glass Mountain Pipeline, which will deliver oil from western Oklahoma to Cushing and be operational by the end of 2013. The company also partnered with producers in Colorado to expand its White Cliffs Pipeline from eastern Colorado to Cushing.
“SemGroup's role as a midstream company is to connect the producers of oil and gas with the end users,” Szydlowski said. “We partner with exploration and production companies to identify areas where expanded or new infrastructure is needed. ... It's an exciting time for companies like ours — matching infrastructure capacity with the country's growing oil and gas production.”
In the last 15 months, SemGroup has doubled its gas processing capacity in northern Oklahoma and plans to add more capacity in 2013. The company's SemGas unit has three gas processing plants and 800 miles of gathering pipelines that serve the Mississippi Lime and Granite Wash plays.
Meanwhile, SemGroup, like other energy companies, is mindful of regulatory initiatives and its effect on the communities where it operates.
“We know that we operate at the license of the communities where our operations are located,” Szydlowski said.
“Being appropriately protective of people and the environment is a basic tenet for us. No one is perfect. But, designing oil and gas infrastructure and operating it safely can be done and has a long track record of successful performance.”
SemGroup's facilities are strategically located in these celebrity plays, and we have been actively growing our infrastructure to support the increasing oil and gas production in the United States and Canada.”