Tuesday, June 28, 2011

NuStar and Velocity to develop pipeline for Eagle Ford Shale condensate

SAN ANTONIO, Texas - NuStar Logistics, L.P. and Velocity Midstream Partners announced on June 27 that they have signed a letter of intent to develop a joint pipeline solution to transport west Eagle Ford Shale condensate from Velocity's Gardendale Hub to NuStar's North Beach Corpus Christi, Texas, terminal facility.

Velocity will build and operate a new 70-mile, 12-inch pipeline with the capacity to move over 100,000 barrels per day (b/d) of condensate from Gardendale to Oakville, Texas.

Velocity's 12-inch pipeline will interconnect with NuStar's new Oakville Storage Facility near Three Rivers, Texas. This storage facility will be connected to NuStar's existing 16-inch pipeline, which has the capacity to transport approximately 200,000 b/d of crude and condensate into NuStar's Corpus Christi North Beach Terminal.


The North Beach terminal has approximately two million barrels of storage capacity, large-scale marine loading facilities, and access to several Corpus Christi refinery markets. NuStar also has a land lease option for 15 acres contiguous to the existing property, which will provide terminal expansion capabilities.

Velocity is currently constructing 65 miles of pipeline and 150,000 barrels of storage to transport condensate to Velocity's Gardendale Terminal for producers, including Shell E&P, Chesapeake, SM Energy and Rosetta Resources.

The addition of the NuStar partnership allows Velocity to quickly offer these and other producers a downstream solution to transport condensate from the Gardendale Terminal to end markets with strong purchaser demand. Construction of Velocity's 12-inch pipeline and NuStar's Three Rivers storage facility will begin this summer and the system is expected to be in service by April of 2012.

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