With oil and gas production increasing at a steady click, there is a greater need for transportation options. Pipelines are always a reliable solution, but with the cost associated with construction time, rail looks attractive.
Murex LLC and Cetane Energy LLC, which previously constructed the Cetane crude oil transloading facility in the Permian basin, completed a unit train expansion project at the facility in Carlsbad, New Mexico, in December. The completion of the project now allows the Cetane terminal to load unit trains of 120 rail cars.
During the past year, Murex and Cetane have added 40,000 barrels (bbl.) of crude oil storage capacity, 12 tank truck offload stations capable of unloading trucks in less than 30 minutes, custody transfer units throughout the facility and more than 18,000 feet of track to allow for the loading of unit trains. The pair also has future expansions planned that will include pipeline gathering infrastructure for delivery of crude into the terminal directly from local producers, as well as additional storage capacity.
Another project that started operations in January was the Southton Rail Yard in San Antonio. The 320-acre site features more than 25,000 feet of newly laid track that will serve the Eagle Ford area. The facility has a 1.5-mile loop track completed and work continues on construction of the eight storage silos that will be on-site. Lead tenant Santrol has already started frac sand deliveries to the facility that eventually will serve mainly unit trains. Other construction projects in the works include Plains All American Pipeline LP’s fractionator in La Salle County, Texas. The company will also be expanding its existing condensate stabilization facility in the Eagle Ford. The new fractionator will have a capacity of 15,000 bbl. per day of Y-grade (mixed natural gas liquids) and off-spec Y-grade product. The new fractionator, condensate stabilization expansion and related infrastructure enhancements are expected to require a total investment of approximately $120 million and are expected to be in service in second-quarter 2015.
Canyon Midstream Partners LLC has also commenced development of the James Lake System in the Permian basin. The system will include a 70 million cubic feet per day cryogenic plant in Ector County, Texas, and 40 miles of high-pressure gathering trunklines and three compressor stations. The project broke ground in January and is slated for a fourth-quarter completion.