Rangeland Energy Enters into Agreement with Delek US for the Transportation of Crude Oil on Rangeland’s RIO Pipeline
Rangeland
Energy announced today that the company has executed a long-term
agreement with a subsidiary of Delek
US Holdings, Inc. (NYSE: DK) (“Delek US”) to be an anchor shipper of
crude oil on the Rangeland Integrated Oil Pipeline (“RIO Pipeline”),
which will connect production from the Delaware Basin to the crude oil
market center in Midland, Texas. Delek
Logistics Partners LP (NYSE: DKL) (“Delek Logistics”), Delek US’
logistics arm, will own 33 percent of the RIO Pipeline and supporting
terminals. Delek US is a diversified downstream energy company with
assets in petroleum refining, logistics and convenience store retailing.
The RIO Pipeline
Construction of the 107-mile pipeline is expected to begin in the second
quarter of this year. Rangeland will also construct a terminal at each
end of the pipeline. The pipeline will originate at the RIO State Line
Terminal, which will serve as a crude oil gathering hub at the Texas-New
Mexico border with storage tanks and truck unloading facilities. The
pipeline will terminate at the RIO Midland Terminal, where there will be
storage tanks and connections to various terminals and interstate
pipelines to Cushing and Gulf Coast markets. Rangeland expects the
pipeline and the two terminals to come into service in the first half of
2016. The RIO Pipeline will have an initial capacity of 55,000 barrels
per day and an expanded capacity of 85,000 barrels per day or more,
depending on the number of additional pump stations ultimately
constructed.
The RIO System
The RIO Pipeline is part of the RIO System, a multipart system designed
to provide crude oil producers, refiners and marketers with pipeline,
rail and other logistics services to support regional production and
downstream transportation of crude oil and condensate. The system’s rail
facility is known as the RIO Hub and is located near Loving, New Mexico.
The RIO Hub began operations in November 2014 and provides Halliburton
(NYSE: HAL) and other customers with inbound frac sand services
including unloading, storage and truck loading. As demand increases, the
RIO Hub will also offer storage, loading and outbound rail service for
crude oil. Ultimately, an additional 30-mile pipeline will connect the
RIO Hub to the State Line Terminal.
CEO Perspective
“Our goal is to give great customers like Delek US the ability to
effectively manage crude oil supplies by providing cost-effective
transportation to points of liquidity and connectivity to multiple
downstream markets,” said Rangeland President and CEO Christopher
W. Keene. “We have been pleased with customer interest in the RIO
System, primarily driven by the region’s production potential. Delek US
is a well-respected refining and logistics company that has a strong,
strategic presence in the region and is a great fit for the RIO System.
The addition of an anchor shipper is a significant milestone in the
ongoing expansion of the RIO System. We are excited to begin
construction of the RIO Pipeline and look forward to working with Delek
US to facilitate the transportation of crude oil from the Delaware Basin
to its refineries and other potential markets.”
About Rangeland Energy, LLC
Headquartered in Sugar Land, Texas, Rangeland Energy was formed in 2009
to focus on developing, acquiring, owning and operating midstream
assets. The company’s primary focus has been in shale producing areas
experiencing rapid growth. The Rangeland team represents more than 150
years of combined midstream experience and is backed by an equity
commitment from EnCap Flatrock Midstream. www.rangelandenergy.com.
About Delek Logistics Partners, LP
Delek Logistics Partners, LP, headquartered in Brentwood, Tennessee, is
a growth-oriented master limited partnership formed by Delek US
Holdings, Inc. (NYSE: DK) to own, operate, acquire and construct crude
oil and refined products logistics and marketing assets.
About Delek US Holdings, Inc.
Delek US Holdings, Inc. is a diversified downstream energy company with
assets in petroleum refining, logistics and convenience store retailing.
The refining segment consists of refineries operated in Tyler, Texas,
and El Dorado, Arkansas, with a combined nameplate production capacity
of 140,000 barrels per day. Delek US Holdings, Inc. and its affiliates
also own approximately 62 percent (including the 2 percent general
partner interest) of Delek Logistics Partners, LP. Delek Logistics
Partners, LP (NYSE: DKL) is a growth-oriented master limited partnership
focused on owning and operating midstream energy infrastructure assets.
The retail segment markets motor fuel and convenience merchandise
through a network of approximately 365 company-operated convenience
store locations operated under the MAPCO Express®, MAPCO Mart®, East
Coast®, Fast Food and Fuel™, Favorite Markets®, Delta Express® and
Discount Food Mart™ brand names.
About EnCap Flatrock Midstream
EnCap Flatrock Midstream provides value-added private equity capital to
proven management teams focused on midstream infrastructure
opportunities across North America. The firm was formed in 2008 by a
partnership between EnCap
Investments L.P. and Flatrock Energy Advisors. Based in San Antonio
with offices in Oklahoma City and Houston, EnCap Flatrock is led by
Managing Partners William D. Waldrip, Dennis F. Jaggi and William R.
Lemmons Jr. The firm manages investment commitments of nearly $6 billion
from a broad group of institutional investors. EnCap Flatrock is
currently making commitments to new management teams from EFM Fund III,
a $3 billion fund. www.efmidstream.com.
Copyright Business Wire 2015