Rangeland Energy has secured a long term agreement with a subsidiary of Delek US Holdings to be an anchor shipper of crude oil on the Rangeland Integrated Oil Pipeline (RIO), which will connect production from the Delaware Basin to the crude oil market centre in Midland, Texas.
Delek Logistics Partners, Delek US’s logistics arm, will own 33 percent of the RIO Pipeline and supporting terminals. Delek US is a diversified downstream energy company with assets in petroleum refining, logistics and convenience store retailing.
Construction of the 107 mile pipeline is expected to begin in the second quarter of this year. Rangeland will also construct a terminal at each end of the pipeline. The pipeline will originate at the RIO State Line terminal, which will serve as a crude oil gathering hub at the Texas-New Mexico border with storage tanks and truck unloading facilities. It will terminate at the RIO Midland terminal, where there will be storage tanks and connections to various terminals and interstate pipelines to Cushing and Gulf Coast markets.
Rangeland expects the pipeline and the two terminals to come into service in the first half of 2016.
RIO will have an initial capacity of 55,000 bpd and an expanded capacity of 85,000 bpd or more, depending on the number of additional pump stations ultimately constructed. The pipeline is part of the RIO system, a multi-part system designed to provide crude oil producers, refiners and marketers with pipeline, rail and other logistics services to support regional production and downstream transport of crude oil and condensate.