Rangeland Energy secured $300 million in equity from private-equity firm EnCap Flatrock Midstream to support Rangeland Energy III LLC, which will support North American midstream opportunities, Rangeland said Aug. 4. Rangeland’s management also contributed to the commitment, the company added.
This is the third commitment EnCap has made to a Rangeland company, bringing the total to more than $600 million since Rangeland’s formation in late 2009.
“We are excited to expand our ability to serve the oil and gas industry by broadening our longstanding relationship with EnCap Flatrock Midstream and expanding our management team. We look forward to building on the success we have had in the Bakken Shale and the Delaware Basin as we continue developing midstream infrastructure that services the needs of oil and gas producers, marketers and refiners,” said Chris Keene, president and CEO of Rangeland II and Rangeland III.
Currently, Rangeland Energy II LLC operates in the Delaware Basin portion of the Permian Basin. It will continue constructing, operating and expanding its RIO System, which provides midstream and logistics services to New Mexico and West Texas crude oil and condensate producers. Rangeland II was formed in early 2013 with an initial $200 million equity commitment from EnCap and Rangeland’s founders.
Construction at the RIO Hub began in July. The 300-acre rail facility near Loving, N.M., is in the center of the basin’s drilling and production. The terminal serves outbound crude oil and condensate and inbound frack sand, the company added. Unit train loading, silo storage and truck loading are available. To date, 14 unit trains and additional rail cars have been received, and about 175,000 tonnes of frack sand have been distributed.
In July, there were 26,000 tonnes of silo storage capacity. The company said volumes will increase in the coming months, and so it plans to expand the hub to handle more than 1 million tonnes/year of frack sand. Truck unloading facilities installation, tankage and storage services and rail and pipeline connectivity are being worked on, the company added.
RIO Pipeline is now being built. It begins at the RIO State Line Terminal near Mentone, Texas. It will end at the RIO Midland Terminal, which will connect to terminals and interstate pipelines serving Cushing, Okla., and Gulf Coast markets.
Contracts have been drawn up with four shippers. The pipeline and terminals are scheduled to be in service in May 2016. The pipeline’s capacity will handle more than 85,000 barrels per day.
Rangeland Energy is based in Sugar Land, Texas.
EnCap Flatrock Midstream is based in San Antonio.
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