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On Sept. 1, Watco Transportation Services L.L.C. will begin operating the Pecos Valley Southern Railroad (PVSR) in west Texas under a long-term lease agreement. The 19-mile short line operates between Saragosa and Pecos, Texas.

PVSR owner Capitol Aggregates historically has operated the short line to serve its sand and gravel quarry located near the end of the line, Watco officials said in a prepared statement. Watco will provide service to the quarry and to other customers of PVSR, which interchanges with Union Pacific Railroad.

In May, Watco began recruiting crude oil customers on the line, which is located in the heart of the Permian Shale Oil basin, Watco officials said. Since then, the company has located three new crude oil shippers and business continues to grow, they said, adding that interest in transloading crude oil and frac sand is high.

“We maxed out the existing loading track infrastructure within the first two weeks of transload operations,” said Allan Roach, Watco’s senior vice president of business development. “Watco has doubled the loading capacity since that time and we have track crews on the ground now working on a project to increase interchange capacity. The line has additional parcels of land for future development, all of which can accommodate unit train loading andor unloading terminals.”

Watco owns and operates 27 short lines in the United States. The company also operates 26 industrial contract switching locations, 16 rail-car repair shops, eight locomotive repair facilities and 23 railroad repair shops; and manages 18 terminal facilities, 10 warehouses and two port operations.