From its offices in Sugarland, Texas, Rangeland Energy has carved out a niche that distinguishes this midstreamer as a master of building and operating refined product hubs at the nation’s busiest crossroads. The vision here? Offer numerous markets and multi-modal transportation options at each hub to offer shippers a veritable hamburger menu from which to select. Now in its third iteration as an EnCap Flatrock portfolio company, Rangeland targets North American crude oil logistics opportunities with its most recent South Texas Energy Products System (STEPS) setting the stage for what comes next.
Rangeland Energy is building on our expertise and successful execution in the Bakken and the Delaware by pursuing similar opportunities in emerging shale producing areas across North America — including West Texas and Southeast New Mexico, the Gulf Coast, and Canada — where Rangeland is pursuing the greenfield development and acquisition of midstream assets including gathering, transmission and storage and rail terminal facilities.
First, let’s briefly review Rangeland’s backstory because STEPS, as the third child in this company’s vision to connect refined products from prolific resource plays to hungry end points, is its most ambitious project to date and this outfit is thinking bigger.
Commercial services at Rangeland’s Crude Oil Loading Terminal (COLT) began in 2012, becoming N.D.’s largest open-access crude oil distribution facility in the Bakken and Three Forks producing areas. At the time, the COLT Hub provided refiners, marketers and producers with 120-car outbound train service, a 21-mile bidirectional pipeline, and six 12,000 Bbls of storage capacity. Rangeland later that year sold COLT to Inergy Midstream for $425 million. Inergy then merged with Crestwood Midstream in 2013. After two major expansions and a capacity to load up to 160,000 BPD, Crestwood’s COLT facility now is one of the largest crude-by-rail loading terminals in the nation.
Shifting its focus to the Permian’s Delaware, Rangeland then constructed the RIO Hub, beginning with 110 miles of pipeline capable of transporting 145 MBPD and two Midland, Texas, batched-system terminals. Located in Eddy Co., N.M., the RIO rail facility at the time offered frac sand storage and truck loading spanning 294 acres with two separate loop tracks each capable of handling two-unit trains back-to-back. When sold in 2018 to Tesoro Refining & Marketing (Andeavor), the RIO system was comprised of four core facilities with additional facilities under development.
Hubba hubba. On the heels of its success with COLT and RIO, Rangeland immediately went to work on STEPS in Corpus Christi to build its third hub—this one to store and transport refined products—primarily diesel, primarily by railcar, and primarily to Mexico. This terminal is located along the Kansas City Southern Railroad mainline, about five miles away from the Port, and the Valero, CITGO, and Flint Hills refineries. Rangeland is now considering adding marine facilities as well as expanding its infrastructure to accommodate crude oil, condensate and fuel oil.
Along with STEPS, Rangeland Energy also has formed a Canadian subsidiary with projects that include the 53-mile Marten Hills Pipeline System in Alberta, which is expected to come online during 2Q. The system will transport crude oil and condensate via an interconnect with Plains Midstream Canada’s Rainbow Pipeline System, which services the Edmonton and Alberta hub and refining markets.
What do you think?