A joint venture has been formed between Velocity Midstream Partners and a subsidiary of CVR Refining for a crude oil pipeline and storage terminal project.
The project will directly link the assets to the fairway of the South Central Oklahoma Oil Province (SCOOP) to CVR Refining’s Wynnewood, Oklahoma refinery.
CVR Refining will hold a 40% stake in the venture – Velocity Pipeline Partners – and it will contract with VPP for transportation services.
Velocity will act as a manager of the joint venture and operate the pipelines following the completion of the pipeline’s construction.
Velocity’s new crude oil project provides the Wynnewood refinery with direct pipeline access to SCOOP production.
The new pipeline also enables producers in the SCOOP to segregate their heavier crude barrels, produced from the Springer and Woodford oil formations, from their lighter barrels, produced from the Woodford condensate formation.
Once completed, the addition of Velocity’s VPP pipeline and crude oil loop will allow producers to gather and transport crude oil and condensate from points in Grady, Stephens, Garvin, McClain and Carter counties to both the Wynnewood refinery and Cushing.
Rick Wilkerson, Velocity’s chief executive officer, says: ‘The Woodford and Springer crude is attractive to Midcontinent refiners and, coupled with the reduction in crude transportation costs, provides the producers in SCOOP with very strong and reliable markets.’