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Medallion Continues to Expand Crude Pipeline System

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About a week after launching an open season for the Midland and Martin laterals, Medallion Pipeline Co. LLC completed two other open seasons for projects expand the company’s crude oil pipeline system. With the addition of these projects, Medallion’s operations will consist of approximately 380 miles of pipeline facilities to provide shippers with significant flexibility to move crude oil production in the Midland, Texas, region to multiple markets via multiple transportation routes.

The Medallion Midstream LLC subsidiary announced April 27 the successful closing of the binding open season for its proposed crude oil pipeline extension, the Crane Extension, as well as the capacity expansion of its existing Midkiff Lateral pipeline, (aka the “Midkiff Expansion”).

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As a result of the open season, Medallion has executed a long-term agreement that provides a capacity commitment sufficient to move forward with the Crane Extension and the Midkiff Expansion projects on a schedule that is expected to place the combined project in service during the second quarter of 2016.

The Crane Extension will extend approximately 25 miles southwest from the existing Midkiff Station in Upton County, Texas, to an interconnection with Magellan Midstream Partners’ Longhorn Pipeline at the Crane Station in eastern Crane County, Texas. The Crane Extension will have a capacity of approximately 100,000 barrels per day (bpd) and will be capable of providing bi-directional services.

As an integrated part of the overall project, the Midkiff Expansion will expand the current 75,000 bpd capacity of the Midkiff Lateral by approximately 25,000 bpd. As part of the Midkiff Expansion, the existing Midkiff Lateral will be reconfigured for bi-directional operations.

“The successful close of the Crane Extension and Midkiff Lateral Expansion Open Season typifies Medallion’s goal of providing the best service and greatest optionality for crude oil producers in the Midland Basin,” said Medallion CEO Randy Lentz. “Multiple interconnections offering access to quality markets is the best way to ensure long-term sustainable value for our customers.”

On April 18, Medallion launched the binding open season to solicit long-term commitments from shippers for firm transportation capacity on the Martin and Midland laterals. These projects represent the fifth major expansion of the Irving, Texas-based company’s existing crude oil pipeline system.

The Martin Lateral is a proposed 25,000 bpd crude oil pipeline that will aggregate crude oil from multiple points of origin in Martin County, Texas, and extend in a southeasterly direction to a point of destination at the new Midland Hub in Midland County, Texas.

The Midland Lateral is a proposed bi-directional crude oil pipeline that will commence at the interconnection with the Martin Lateral at the Midland Hub and extend in a southeasterly direction to the existing Garden City Station, where it interconnects with Medallion Pipeline’s existing Wolfcamp Connector mainline, the Reagan Gathering Extension and the Midkiff Lateral. The Midland Lateral is proposed to be capable of transporting 25,000 bpd of crude oil from the Midland Hub to the Garden City Station and 90,000 bpd from the Garden City Station to the Midland Hub.

The open season provides an opportunity for interested shippers to acquire long-term firm capacity, under minimum 10-year term transportation service agreements. The Martin and Midland expansions are expected to commence full commercial operations in the third quarter 2016, although certain segments of the project may begin service on an interim basis on an earlier date.

All open season bids must be submitted to the Medallion by 5 p.m. Central on May 11. Additional information can be found at medallionmidstream.com.

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