Storage of crude oil and refined products has now become a Spandex-tight issue for producers in the busiest basins looking to stash their goods amid skyrocketing inventories. Pipeline companies are urging E&Ps to cut back production to not risk further man-made declines of prices. Meanwhile, midstream operators that offer storage capacity face an interesting turn of events in which one journalist summed up, “Storage tends to be a ho-hum business, until it isn’t.”
Bluewing Midstream LLC was founded in July of 2015 with the aim to acquire, develop, and operate bulk liquids terminals along the Gulf Coast. Headquartered in Houston TX, they have partnered with Energy Spectrum – a well-established private equity firm located in Dallas, TX. First acquired in October 2016, terminals are strategically located in Brownsville, TX to serve the South Texas, Mexico, and other international markets.
On the refined products side of the equation comes Houston-based Bluewing Midstream. Led by company president Todd Reid, whose roots trace back to years spent as a successful Chicago floor trader, Bluewing five years ago snatched up seven storage tanks from a Brownsville, Texas, operation going out of business. Reid knew that a lot of end users for jet fuel and gasoline, like airports and big gas stations, couldn’t buy fuel directly from a refinery. Instead, they bought their fuels from a trader. Bing!
At the time of purchase, Bluewing’s acquired tank farm offered a mere 50,000 Bbls of storage for refined products. But with a cash infusion in 2015 of $100 million from Dallas-based, private-equity firm Energy Spectrum Capital (which we’ll highlight in our ongoing series The Money Backers), Bluewing set off to expand its terminal footprint to include diesel, gasoline, base oil, wax, jet fuel, LPGs and ethanol to serve not only South Texas but Mexico and international markets. The company’s Phase II expansion last year added 300,000 Bbls of new liquids storage capacity for a current 1.1 million Bbls overall. With barge, rail and truck capabilities, Bluewing now offers 57 storage tanks approximately two miles from Mexico. Phase III of its bulk liquid terminal is in the wings to add another 1.19 MMBbls of new storage capacity.
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