Kinder Morgan Energy Partners, L.P. (NYSE: KMP) and Martin Midstream
Partners L.P. (NASDAQ: MMLP) today announced a new joint venture, Pecos
Valley Producer Services LLC, to develop a multi-commodity rail terminal
in Pecos, Texas. The new terminal will serve the growing oil and natural
gas industries in the Permian Basin. The facility will be constructed
and operated by a subsidiary of Watco Companies, Inc., the largest
privately held short line railroad company in the United States. KMP
holds a preferred equity position in Watco.
The terminal will offer a variety of services to producers in the
Permian Basin including crude oil hauling, storage, transloading and
marketing. It will also provide producers access to light Louisiana
sweet crude oil markets. Kinder Morgan and Martin Midstream Partners
will offer immediate NGL storage, takeaway, and fractionation services,
and seek to develop natural gas and crude gathering and processing
systems within the area. Additionally, the joint venture has held
initial discussions to develop a frac sand unit train terminal to
service Reeves County and surrounding counties.
The first stage of the terminal is expected to be completed and
operational by May 2012. Crude oil, natural gas liquids, frac sand,
pipe, tube, structural steel, rig mats and other commodities can be
railed in and out, and transloaded to truck for delivery to the
surrounding area. Once the terminal has been fully developed, it will
encompass approximately 85 acres and will be able to support unit
trains. 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 the city of Pecos, and will offer scalability and
convenience for local area producers.
Once fully operational, the terminal will create up to 45 new jobs. Bill
Oglesby, executive director of the Pecos Economic Development
Corporation, said, "We welcome Kinder Morgan and Martin Midstream's
announcement of this rail terminal in Pecos. This is a significant step
for Pecos and Reeves County, and the development of our oil and gas
resources."
Duane Kokinda, president of Kinder Morgan Texas Pipeline LLC, said, "KMP
is excited for the opportunity to join with Martin Midstream and Watco
to develop this opportunity in the Permian Basin.