NuStar, Velocity partner to ship Eagle Ford condensate

Christopher E. Smith
OGJ Pipeline Editor

HOUSTON, June 27 -- NuStar Logistics LP and Velocity Midstream Partners have signed a letter of intent to develop a pipeline system transporting west Eagle Ford shale condensate from Velocity's Gardendale hub to NuStar's North Beach Corpus Christi, Tex., terminal facility.

Velocity will build and operate a 70-mile, 12-in. OD pipeline with capacity to move more than 100,000 b/d of condensate from Gardendale to NuStar's new Oakville storage facility near Three Rivers, Tex. This storage facility will in turn be connected to an existing 16-in., 200,000 b/d NuStar pipeline running to its Corpus Christi North Beach Terminal.

The North Beach terminal has roughly 2 million bbl of storage capacity, large-scale marine loading facilities, and access to the Corpus Christi refinery market. NuStar also has a land lease option for 15 acres contiguous to the existing property, suitable for potential expansion.

Velocity is already building 65 miles of pipeline and 150,000 bbl of storage to transport condensate from producers including Shell E&P, Chesapeake, SM Energy, and Rosetta Resources, to its Gardendale terminal (OGJ Online, Dec. 8, 2010). The partnership with NuStar allows for both ready shipment of this production to end users and alleviation of truck-related bottlenecks in current transport schemes, the companies said.

Construction of Velocity's 12-in. pipeline and NuStar's Three Rivers storage facility will begin this summer, the joint venture expecting the system to be in service by April 2012.

Contact Christopher E. Smith at chriss@ogjonline.com.

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