Pipeline Co. LLC, a subsidiary of Medallion Midstream LLC, successfully closed the binding open season for its proposed Santa Rita Lateral crude oil pipeline extension, as well as for the capacity expansion of its existing Reagan Gathering Extension pipeline.
The binding open season for the Santa Rita Lateral and the Reagan Expansion commenced on Feb. 11 and closed March 4.
“The Santa Rita Lateral and Reagan Expansion projects will significantly expand and extend Medallion’s footprint in Reagan County,” said Randy Lentz, CEO of Medallion. “Combined with our system currently in service and the previously announced expansion projects that are under construction, the Santa Rita Lateral increases Medallion’s Wolfcamp Connector crude oil gathering system to over 250 miles of pipeline, gathering oil from four of the most active counties for horizontal drilling in the Midland Basin.”
Based on the binding capacity bids received from prospective shippers during the open season, Medallion Pipeline has executed long-term Transportation Service Agreements, which, in the aggregate, provide capacity commitments sufficient to move forward with the construction of the overall Santa Rita Lateral and the Reagan Expansion project. The schedule is expected to place the combined project in-service during the second quarter of 2015, although certain initial segments of the project may commence service on an interim basis as early as March 2015.
The Santa Rita Lateral will extend approximately 55 miles from origin points upstream of the new Santa Rita station, in Reagan County, Texas, to the existing Reagan station, and will be capable of transporting approximately 65,000 barrels per day (bpd) of crude oil for delivery. Adjacent to the proposed Santa Rita station will be truck unloading facilities that will be owned and operated by Medallion’s affiliate, Medallion Crude Oil Logistics, to provide shippers the option to truck crude oil quantities to those facilities for delivery to Medallion at that origin point on the Santa Rita Lateral.
The Reagan Expansion will increase Medallion’s Reagan Gathering Extension pipeline capacity between the Reagan station and Garden City station by 30,000 bpd, from the current 65,000 bpd of capacity to 95,000 bpd.