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Rail Terminal Planned to Serve Texas, New Mexico Producers

Rangeland Energy is buying land near Loving, NM, where it plans to develop a large terminal facility to handle crude oil, frack sand, pipe and other products; plans for a crude oil pipeline to the terminal also are in the works, the company said Monday.

Sugar Land, TX-based Rangeland said it has struck contracts to buy up to 770 acres and expects its terminal to be in service by the end of the year. The planned pipeline system in southern Eddy County, NM, would connect the terminal to existing and planned crude oil pipelines. The terminal is to be a full-service facility for crude oil producers and buyers in the Delaware Basin.

Rangeland plans to receive crude oil produced in southeast New Mexico and West Texas via inbound trucks and gathering pipelines. The terminal will provide crude oil storage and outbound access to existing and planned pipelines. Unit-train loading facilities will allow Rangeland customers to deliver crude to high-value markets across the country that are not currently accessible by pipeline.

Initial rail services are to include transload (truck-to-rail) and manifest rail loading. Rangeland has acquired sufficient acreage to construct facilities to receive frack sand by manifest or unit-trains, to store and stage the sand, and to load trucks for distribution to oil field service companies in the area, the company said. The terminal will also be capable of handling trans-modal rail business for other oil field materials such as drill pipe. The facility will be served by BNSF Railways.

Rangeland developed a similar system in North Dakota. Known as Colt, the system serves as a point of liquidity for Bakken crude oil throughout North American markets by providing customers with storage and connectivity to BNSF and various inbound and outbound pipeline systems. The system was sold to Inergy Midstream LP last December for $425 million (see Shale Daily, Nov. 6, 2012).

"We are excited to begin development of the company's next terminal and play a role in the rapid production growth taking place in southeast New Mexico and West Texas," said Rangeland CEO Chris Keene "Our objective is to draw on our successful track record in North Dakota to provide a one-stop facility that can service drilling activity and market crude oil produced in New Mexico and West Texas."

Rangeland said it expects to invest more than $150 million in the New Mexico terminal and supporting infrastructure. The company is currently working with customers to negotiate and execute commercial contracts at the facility.

Founded in 2009, Rangeland is backed by private equity commitments from EnCap Flatrock Midstream of San Antonio.

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