Rangeland Energy may have been early to the local crude-by-rail transport game with the Rangeland Integrated Oil system near Loving, N.M., where construction began in May, but other operators have realized there’s still plenty of crude to go around in The Land of Enchantment.
According to the U.S. Energy Information Administration, monthly crude production from New Mexico was up more than 1.5 million barrels (MMbbl) to 10.281 MMbbl in July compared to the previous year, and all of that oil has to get to market somehow.
First, NGL Energy Partners LP announced plans to construct a new crude oil transloading facility serving the San Juan Basin, near Albuquerque, N.M. NGL acquired 256 acres in the area and plans to build the terminal there. According to the company’s statement, the planned facility will feature multiple inbound truck unloading bays, more than 240,000 bbl of storage capacity and an initial outbound capacity of at least two unit trains per week. The terminal will connect with BNSF Railway Co.’s transcontinental mainline for delivery to multiple U.S. markets. The facility has an expected in-service date in third-quarter 2015.
NuDevco Midstream Development LLC, sponsor of Houston-based Marlin Midstream Partners LP, also announced plans to develop a crude oil logistics site in the state to serve the western Permian Basin. The company purchased land in Eunice, N.M., for a crude oil terminalling site. It plans to develop the land to accommodate additional rail space and tank storage. Currently, the site includes rail spurs and truck siting, and the company is purchasing rail cars, crude oil trucks, stabilizer tower units and storage tanks.
Union Pacific also announced plans for a new classification yard in the neighboring state of Texas, in Robertson County near Hearne. The facility will sort rail cars by destination on separate tracks from inbound trains to create multiple outbound trains, which will then be fueled and inspected by a mechanical crew before departing to local and regional destinations.
It seems midstream and rail companies alike are betting on the U.S. crude-by-rail industry thriving in the near future.
Caryn Livingston can be reached at clivingston@hartenergy.com or 713-260-6433.
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