March 20, 2013 [OPIS] - Rangeland Energy has agreed to purchase land in southeast New Mexico for the purpose of building a terminal that will handle crude oil, frac sand, pipe and other products used in producing oil and gas, the Sugar Land, Texas-based company said late Monday.
Now in a 90-day feasibility/due diligence period, the oil, gas and natural gas liquids infrastructure company is working with customers to negotiate commercial contracts at the terminal which would be located on 770 acres near Loving, N.M.
Rangeland, backed by private equity commitments from EnCap Flatrock Midstream, expects to invest more than $150 million to construct the terminal and necessary infrastructure, and to put it into service before the end of 2013.
The terminal is to be a full-service facility for crude oil producers and buyers in the Delaware Basin. Rangeland will receive and stage frac sand and pipe for production, while receiving, storing and distributing crude oil from southeast New Mexico and West Texas to downstream markets via pipeline and rail.
The project is the latest in a number of transportation initiatives that seek to capitalize on coastal oil refiners’ desire to replace imported crude with domestic production, as well as the rapid production growth in shale petroleum regions.
Crude oil from southeast New Mexico and West Texas passing through the new terminal is likely to flow by pipeline to Cushing, Okla., and the Gulf Coast, and by rail to the West Coast and the Gulf Coast, a spokeswoman for Rangeland told OPIS.
The terminal will feature truck-to-rail and manifest loading initially, and unit-train facilities later for both outbound shipments of crude oil and inbound shipments of frac sand. BNSF Railways will serve the facility.
In addition, trucks will be able to be loaded with sand at the terminal for distribution to field service companies in the area. The facility will be capable of handling trans-modal rail business for other field materials such as drill pipe.
It’s too early to put a number to the capacity of the planned terminal, the spokeswoman said. However, the COLT facility that Rangeland developed in the Bakken Shale region could be used as a “very general frame of reference,” she said in an e-mailed statement.
At the time of its sale to Inergy Midstream LP, the 550-acre COLT terminal had 720,000 bbl of working capacity tankage, space for more tanks, eight truck bays and two 8,700-foot rail loops to accommodate 120-car unit trains. It could move more than 120,000 b/d of crude oil by rail.
COLT also provides pipeline services through a 21-mile, 70,000-b/d, bidirectional crude oil transmission pipeline. The COLT Connector links the COLT hub to a point of interconnect with a number of existing and planned crude lines at the Dry Fork terminal near the Beaver Lodge/Ramberg junction. That is located eight miles south of Tioga, N.D., including interconnects to the Tesoro and Enbridge pipeline systems. Rangeland built a 120,000-bbl storage tank at Ramberg to facilitate movements.
