NEW YORK Feb 27 Kinder Morgan Energy
Partners said on Monday it was working on a joint
venture on developing a multi-commodity rail service in the west
Texas town of Pecos to serve the resurgent oil and natural gas
industry of the Permian Basin.
The pipeline and terminal giant said that it would work with
Watco, the nation's largest privately held shortline railway,
and Martin Midstream Partners, a smaller master limited
partnership for oil and gas services, to construct project.
Kinder Morgan has a preferred equity stake in Watco.
The first stage, a terminal expected to be operating by May,
will also provide access to the Light Louisiana sweet crude oil
markets which load in St. James, Louisiana.
Crude oil, natural gas liquids, sand used in hydraulic
fracturing, pipes, tubes, structural steel, rig mats and other
supplies can be railed in and out, and transferred to trucks for
delivery to surrounding area.
Once the terminal has been fully developed, it will
encompass approximately 85 acres and will be able to support
unit trains. No time frame was given for when it will be fully
developed but the partners envisage natural gas and crude
gathering and processing systems.
In addition, the partners have held initial discussions to
develop train terminal specializing in fracking sand to service
Reeves County and surrounding counties.
Total railcar capacity is anticipated to be 300 to 600 per
day based on demand. The terminal is strategically located along
the Pecos Valley Southern Railway (PVS) and directly adjacent to
the Union Pacific mainline in Pecos.
The Permian Basin is benefiting from new drilling horizontal
techology, including fracking, used in tight oil formations to
gather oil and gas.