Velocity Midstream Partners announced that it has completed the construction of a 45 mile, 12 in. crude oil pipeline loop of its existing condensate pipeline through the fairway of the South Central Oklahoma Oil Province (SCOOP).
The crude oil loop project is supported by expanded commitments from Continental Resources Inc., an Oklahoma City-based exploration and production company, and CVR Refining. Velocity also announced that it has started construction of a 22 mile, 12 in. crude oil pipeline extension linking the core of the Merge play to its SCOOP pipeline assets. The Merge pipeline will be placed into operation in April 2018. Along with these new pipelines, Velocity also announced the completion of a joint tariff agreement with Plains All American Pipeline (PAA), providing storage and segregated, batched crude transportation to PAA's Cushing terminal.
In addition to the new pipeline projects and transportation arrangements, Velocity has acquired 100% ownership of all of the truck unloading terminals along its pipelines and has expanded and added terminals to provide attractive locations for SCOOP and Merge producers. Upon completion of its Merge terminal just west of Tuttle, Oklahoma, Velocity will have six unloading terminals operating 24/7 across the two plays with segregated unloading and storage for crude oil and condensate. Velocity is in discussions with producers to construct an additional 15 mile pipeline extension and a new terminal in central Canadian County.
Velocity's system is now comprised of 125 miles of pipeline capable of flowing 250 000 bpd, along with 395 000 bbls of storage and 26 truck unloading bays capable of unloading greater than 100 000 bpd. The new crude oil pipeline enables producers in the SCOOP and Merge to segregate their heavier crude barrels produced from the Springer, Sycamore, Meramec and Woodford oil formations from the lighter barrels being produced from the Woodford condensate formation. These segregated pipelines allow Velocity to transport different quality ‘neat barrels’ from the wellhead to premium markets, thereby preserving the best possible pricing for its producer clients.
Velocity's crude and condensate pipelines lie through the core of the SCOOP and Merge plays, allowing Velocity to provide cost effective gathering solutions to producers regardless of crude gravity. Velocity's pipeline corridor is within 10 miles of more than 20 active producers controlling over 1 million proved gross acres of stacked pay from the Woodford, Springer, Sycamore and Meramec formations. Velocity has engineered a condensate stabilisation facility with plans for construction this spring to insure producers are able to continually meet the RVP specifications of downstream pipelines and Cushing purchasers.
"Velocity appreciates the continued support of Continental Resources and is honored to be working with CVR and PAA to deliver strong, reliable markets to our producer clients in the SCOOP and Merge. CVR is a highly successful downstream entity with vast expertise in refining and logistics," said Rick Wilkerson, Velocity's Chief Executive Officer. "Further, PAA is the premier crude oil transportation and terminal operator of barrels destined for Cushing, and we are proud to be partnered with them to provide a complete well-to-market transportation solution. The attractiveness of Woodford, Springer, Meramec and Sycamore crude to mid-continent refiners like CVR, coupled with the reduction in crude gathering and transportation costs, provides the producers in the SCOOP and Merge with the mid-continent's preeminent market options."
Dave Lamp, Chief Executive Officer or CVR stated: “As a part of CVR's continued focus on expanding its logistics business, we are pleased with our partnership with Velocity and its ability to complete the fully envisioned crude oil pipeline project. Velocity has a proven track record of developing, constructing, and operating high quality midstream assets and gathering systems."
Read the article online at: https://www.worldpipelines.com/business-news/07032018/velocity-midstream-partners-has-completed-its-crude-oil-pipeline-loop/