April 11, 2011 [OPIS] - New York-listed Genesis Energy LP said on Monday that it has entered into several agreements and commenced work to expand its crude oil pipeline and terminaling capabilities in the upper Texas coast and to expand its refinery services operating footprint with a new sour gas processing facility.
The company is aiming to complete the expansion project and begin crude delivery from Eagle Ford and other Texas production areas to Houston in the fourth quarter. Genesis Energy is a diversified midstream energy master limited partnership headquartered in Houston, Texas.
OPIS notes several logistics companies are competing to complete much-needed crude deliveries via pipelines, rail and barge from the Midwest and West Texas to the U.S. refining hub in the Houston area.
There are at least four crude pipeline projects in progress to bring crude supplies from the landlocked West Texas and Cushing, Okla., areas to the Gulf Coast. This is in addition to a few upcoming rail projects for the same purpose.
Genesis has acquired three above-ground storage tanks, located in Texas City, Texas, representing aggregate capacity of about 230,000 bbl that Genesis will refurbish and convert into crude oil capable tanks. It has also acquired an existing barge dock at the same location, all approximately 1.5 miles from its existing Texas pipeline system.
Genesis also intends to construct a truck station, tankage and possible pipeline interconnects at West Columbia, Texas, to be able to provide incremental transportation service for Eagle Ford and other Texas production through its system to refining markets in the greater Houston/Texas City area as well as markets accessible via barge from the new Texas City terminal.
Once the refurbishment, tie-in and all interconnecting pipe is completed, estimated to be in the fourth quarter of 2011, Genesis will be able to handle about 40,000 b/d of crude oil through the Texas City terminal. In connection with its activities in Texas, Genesis is also constructing interconnecting pipeline and other required facilities to provide transportation services for all of the crude oil production from the Hastings field, near Alvin, Texas, that is in the very early stages of a CO2 tertiary recovery program.
Genesis is also pleased to announce it has entered into agreements and commenced work on a new sour gas processing facility to be installed at Holly Refining and Marketing’s refining complex located in Tulsa, Okla.
The new facility, expected to be completed no later than the fourth quarter of 2012, will remove a portion of the sulfur from the crude oil refined at the complex and result in the potential addition of 24,000 dry standard tons (dst) per year of sodium hydrosulfide (NaHS), the by-product Genesis receives for its sulfur removal services.
