Fairway Energy to Build Houston Crude Oil Storage Facility

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Fairway Energy Partners LLC announced the closing of a private equity offering, the net proceeds of which will be used to fund the construction of the first phase of the Pierce Junction Crude Oil Storage facility. Fairway plans to use this capital to convert three existing underground storage caverns at the Pierce Junction Salt Dome in south Houston into crude oil storage service and to build out all of the requisite pipelines, brine ponds, interconnects and pumping capacity to put the facility in commercial service.
  The initial phase of the project is expected to be in service by the end of 2016 and has been designed to allow for storage of three segregations of crude oil for a total capacity of approximately 10 million barrels. Overall, Fairway has expansion rights up to a total of approximately 20 million barrels at Pierce Junction. Following the completion of Phase I, the company intends to take the project to its full capacity during a second phase of the project. Fairway has secured the exclusive right to store crude oil on the Pierce Junction Salt Dome.
  Phase I also includes the construction of two separate bi–directional 24–inch pipelines intended to connect the facility to the existing Houston area crude oil grid, adding more than one million barrels per day of pipeline receipt and delivery capability in the Houston marketplace. The proposed pipelines will traverse approximately 21 miles across the Houston area to connect the caverns to the Genoa Junction and Speed Junction hubs. This should enable Fairway to provide receipt capability from inbound crude oil pipelines from the Permian and Eagle Ford Basins, the Mid–Continent and Canadian regions as well as the Gulf of Mexico. The hubs provide downstream connectivity to terminals, refineries and water outlets located in the Houston Ship Channel, Texas City and Beaumont/Port Arthur market areas.
  In the first phase, Fairway will also construct brine ponds with approximately 10 million barrels of capacity and central pumping and metering facilities at the site. The project is designed as a closed system, minimizing any new air emissions as well as customers’ volumetric losses.