The Daley Note

Small WY Town Carries Big Weight in Crude Logistics

Written by Kristy Oleszek | Nov 7, 2024 1:00:00 PM

Located in southwestern Wyoming, the small town of Guernsey (population ~1,500) is easily missed on a map. Yet Guernsey has outsized importance in crude oil markets, serving as a logistics hub for moving barrels through the Rocky Mountain region.

Guernsey is a key market center in East Daley Analytics’ Crude Hub Model. The town’s strategic location connects multiple grades of crude, including heavy sour varieties like Western Canadian Select (WCS), WY General Sour from the Powder River Basin, and WY Asphalt Sour from the Big Horn Basin. The Guernsey market also includes sweet grades such as Syncrude from Western Canada, Light Sweet Bakken, and Light Sweet Guernsey.

Nearby Casper, WY is another significant point in the regional crude network, serving as the intersection for several sour crude streams. Enbridge’s (ENB) Express Pipeline transports WCS and Syncrude, while the Red Butte Pipeline carries WY Asphalt Sour and the Powder River’s WY General Sour to Casper. Light Sweet Bakken barrels reach the Guernsey market via Kinder Morgan’s (KMI) Double H and True Companies' Bridger/Belle Fourche pipelines.

Salt Lake City, UT is a major market for Guernsey crude. The city is home to five refineries: Chevron (55 Mb/d), Marathon (66 Mb/d), Big West (35 Mb/d), HF Sinclair (45 Mb/d) and Silver Eagle (15 Mb/d). These refineries are supplied from Guernsey by the SLC Core and Frontier Aspen pipelines, as well as local production from the Piceance and Uinta basins. Additionally, HF Sinclair operates a dedicated pipeline (75 Mb/d capacity) from Casper to its Sinclair refinery.

Along with Salt Lake City, Guernsey is a key supply source for other markets. A breakdown is shown in the figure from Crude Hub Model data. The Suncor Pipeline transports crude from Guernsey to the Commerce City refinery in Colorado. The Platte Pipeline moves crude from Guernsey to CHS’s McPherson and HF Sinclair’s El Dorado refineries in Kansas, then on to the Wood River market. After meeting refinery demand, additional barrels from the Guernsey market are directed through the Denver-Julesburg Basin to Cushing. See East Daley’s Crude Hub Model to learn more. – Kristy Oleszek Tickers: ENB, KMI.

 

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