February 28, 2012 [OPIS] - A new rail terminal to service the oil and natural gas industries of the Permian Basin is being developed by Kinder Morgan Energy Partners LP and Martin Midstream Partners LP, the two firms said Monday.
A subsidiary of Watco Companies Inc. will construct and operate the terminal in Pecos, Texas, with the first stage expected to be completed and operational by May. Kinder Morgan holds a preferred equity position in Watco, which is the largest privately held short line railroad company in the U.S.
The facility will offer Permian Basin producers crude oil hauling, storage, transloading and marketing services, as well as access to Light Louisiana Sweet crude oil markets. In addition, the terminal will offer immediate natural gas liquids (NGL) storage, takeaway and fractionation services. Kinder Morgan and Martin Midstream also seek to develop natural gas and crude gathering and processing systems in the area.
In addition, the joint venture has held initial discussions to develop a frac sand unit train terminal to service Reeves County, the companies said in a statement.
Initially, crude oil, NGL, frac sand, pipe, tube, structural steel and other commodities can be railed in and out, and transloaded to trucks for local delivery. Fully developed, the facility will cover 85 acres and be able to support unit trains. Total railcar capacity is anticipated to reach 300 to 600 per day based on demand.
The terminal will be located along the Pecos Valley Southern Railway and adjacent to the Union Pacific mainline into the city of Pecos.
Other rail transload facilities built by Watco and Kinder Morgan in 2011 include those in Dore, N.D.; Stroud, Okla.; Houston and locations in the Eagle Ford Shale area of south Texas.
