Two partnerships target crude, grain rail facilities

Inergy Midstream L.P. and Enserco Midstream L.L.C. recently formed a joint venture to own and operate a crude oil rail terminal in Douglas County, Wyo.

Inergy Midstream subsidiary Inergy Crude Logistics L.L.C. and Enserco Midstream subsidiary Enserco Powder River Basin L.L.C. each retain a 50 percent interest in Powder River Basin Industrial Complex L.L.C., which owns the Douglas County rail facility. Located in the Niobrara Shale and served by BNSF Railway Co., the facility launched manifest train service in August and is scheduled to start unit train service in first-quarter 2014.

After unit train service begins, Inergy Midstream and Enserco Midstream expect to expand throughput capacity to about 20,000 barrels per day. Throughput capacity can be further increased to up to 60,000 barrels per day as production volumes increase in the Niobrara Shale/Powder River Basin, Inergy Midstream and Enserco Midstream officials said in a press release.

The transaction further expands Inergy Midstream's crude logistics operations into another emerging shale play, they said.

Meanwhile grain cooperative CHS Inc. and oilfield consumables distributor Wildcat Minerals L.L.C. have partnered to develop transload terminals at CHS-owned grain and agronomy facilities nationwide. The partners plan to co-locate multiple Wildcat terminals at existing CHS rail facilities by year's end.

"Given the seasonality of the grain and agronomy seasons, we recognize that our rail terminals can also be utilized to support the explosive growth of the unconventional shale plays throughout our geography in the United States," said Richard Payne, business development manager for CHS' country operations, in a press release.

The partnership further expands Wildcat's terminal network in unconventional oil and gas basins, said Wildcat Minerals Chief Operating Officer Pete Melcher.