Western Refining Announces Start-Up of Delaware Basin Logistics Project

abarrelfullabarrelfull wrote on 14 Apr 2013 18:40
Tags: n-america pipeline railway refinery usa wnr

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Western Refining, Inc. (NYSE:WNR) announced today the start-up of its Mason Station Crude Oil Terminal in Reeves County, Texas ("Mason Station") which is the first phase of the Company's Delaware Basin Crude Oil Gathering System ("Delaware Basin System"). Mason Station is owned and operated by a subsidiary of the Company. Mason Station includes crude oil storage, truck offloading stations, and a pipeline connection to the Kinder Morgan El Paso crude oil pipeline ("Kinder Morgan Line").

The second phase of the Delaware Basin System includes approximately 50 miles of crude oil gathering lines in Southern New Mexico and West Texas and is expected to be completed during the second quarter of 2013. When completed, phases one and two of the Delaware Basin System will be capable of delivering up to 100,000 barrels per day of shale crude oil to the Kinder Morgan Line for delivery to Western's El Paso refinery. The refinery is currently processing approximately 25,000 barrels per day of the Delaware Basin-sourced crude oil.

Western also announced it is evaluating the feasibility of third and fourth phases for this project. Phase three would connect its Delaware Basin System to its existing 16" TexNew Mex pipeline in Chaves County, New Mexico. This connection would provide additional supply flexibility for new shale crude oil to its El Paso, Texas and Gallup, New Mexico refineries. Phase four includes evaluation of the feasibility of expanding Western's rail capabilities at its Gallup refinery. Currently, the Gallup refinery has capacity to load six tanker rail cars per day which could be expanded to 20 tanker rail cars per day.

Jeff Stevens, President and CEO of Western commented, "We continue to explore all options to expand and enhance our logistics capabilities in the Permian Basin and Four Corners regions. Our unique location and existing infrastructure present us with a number of opportunities to maximize our flexibility to deliver shale crude oil to both our refineries, and potentially others, by capitalizing on the increased crude oil production in these regions."

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