Fairway Energy Partners has secured funding for the first phase of a storage terminal and pipeline project in Houston, Texas.
Fairway plans to use the capital from a private equity offering to convert three existing underground storage caverns at the Pierce Junction Salt Dome in south Houston into a crude oil storage service. Additionally, it also plans to build out all of the requisite pipelines, brine ponds, interconnects and pumping capacity to put the facility in commercial service.
The first phase is expected to be complete and in service by the end of 2016 and has been designed to allow for storage of three segregations of crude oil for a total capacity of approximately 10 million barrels.
Fairway has expansion rights to a total of 20 million barrels at Pierce Junction. Following completion of the first phase, the company intends to take the project to its full capacity during a second phase of the project. Fairway has secured the exclusive right to store crude oil on the Pierce Junction Salt Dome.
Two separate bi-directional 24-inch pipelines are also being built which will connect the facility to the existing Houston area crude oil grid, adding more than one million barrels per day of pipeline receipt and delivery capability in the marketplace.
They will cover 21 miles to connect the facility to the Genoa Junction and Speed Junction hubs allowing Fairway to provide receipt capability from the Permian and Eagle Ford Basins, the Mid-Continent and Canadian regions as well as the Gulf of Mexico.
The hubs provide downstream connectivity to terminals, refineries and water outlets located in the Houston Ship Channel, Texas City and Beaumont/Port Arthur market areas.
Chris Hilgert, Fairway CEO says: ‘This project will serve the growing crude oil storage needs driven by the significant delivery of new pipeline-delivered crude oil into and through the Houston market. We are offering a new, low-cost option to the market as a fee for service based provider.
‘We do not intend to take title to the crude oil that we will handle and store, nor will we trade crude oil.’