San Antonio-based NuStar Logistics and two subsidiaries of Houston-based EOG Resources Inc. have signed a deal to jointly develop, build and own a new rail facility at NuStar’s crude oil terminal in St. James that will be able to unload 70,000 barrels of oil a day from tank cars.
The total price of the project, which also includes two new storage tanks with a combined capacity of 360,000 barrels, was not disclosed.
“This project will give our customers much greater ability to move and store production from very significant crude discoveries throughout the U.S.,” Curt Anastasio, president and chief executive of NuStar, said in a news release. “Our St. James terminal is ideally situated in a major crude oil hub and has access to all modes of transportation to effectively get the crude to any number of markets. And given EOG’s vast resources and leadership in our industry, they are the ideal partner for us in this effort.”
The St. James terminal can now offload 10,000 to 12,000 barrels of oil from trains each day and the existing rail siding can handle up to 20 cars at a time, according to NuStar spokeswoman Mary Rose Brown.
The new facility will be able to handle at least one train carrying 70,000 barrels of oil each day, Brown said. In addition, the new facility will have a rail siding long enough for another similar-sized train to wait while the first is unloaded.
K. Leonard, a spokeswoman for EOG Resources, said the oil will be transported in tank cars that hold either 680 barrels of oil or 725 barrels of oil. A train carrying 70,000 barrels of oil would be around 100 tank cars long.
The facility will make it easier to move and store crude oil from the Bakken, Eagle Ford and other developing shale plays in the United States, according to NuStar and EOG.
Brown said EOG will own the rail unloading facility, and NuStar will own the storage tanks and the pipeline connecting the rail facility to the St. James terminal.
NuStar will also operate the rail facility, Brown said. The company expects to invest $30 million to $40 million in its part of the new facility.
Leonard said EOG will not be disclosing its investment in the rail facility.
The NuStar terminal, with a capacity of 8 million barrels, is one of the largest in the growing St. James crude oil hub and is connected to onshore and offshore pipelines. The terminal also has marine, truck and rail access.
NuStar and EOG officials said they expect to complete the rail portion of the project during the first three months of 2012. The storage tanks should be complete and in service in May.