Proppant provider Hi-Crush Partners LP and ARB Midstream LLC said May 6 that they entered definitive agreements to jointly develop and operate energy rail hubs in the Denver-Julesburg (D-J) Basin and Permian Basin. Each basin will receive one rail hub, they added.
Union Pacific Railroad will provide unit and manifest train capabilities for frack sand proppant and crude oil. Hi-Crush will operate the frack sand terminals at these facilities. The sand is sourced from production facilities in Wisconsin. ARB will operate the crude-by-rail terminals.
In the heart of the D-J Basin, the companies are developing Nicon, a 225-acre site in Weld County, Colo. There will be silo storage capacity for frack sand infrastructure. The crude oil infrastructure will handle multiple grades of oil, initially storing 200,000 barrels (Mbbl), but it can store more than 400Mbbl. Rail-loading capacity will be about 79Mbbl/d of oil, with initial truck unload capacity of 35Mbbl/d.
Nicon is scheduled to be commercially operational in this years’ fourth quarter.
The Permian Gateway energy rail hub would cover 300 acres in Howard County, Texas, near Big Spring, the companies said. ARB entered a definitive agreement to purchase the acreage, and the closing is scheduled for May.
The frack sand infrastructure will include silo storage capacity. Hi-Crush and ARB expect the Permian hub to be commercially operational by early 2016.
Adam Bedard, ARB’s CEO, said the Big Spring region lacks terminal capacity.
Hi-Crush Partners LP is based in Houston.
ARB Midstream LLC is based in Denver.
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