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6/25/2013    



Rail Industry Trends Article
Savage opens rail operation in Utica Shale; Crestwood acquires gas-gathering stake in Niobrara Shale



Rail Industry Trends

Savage today announced it opened a bulk material handling and rail transloading operation at the Ohio Commerce Center (OCC) in Lordstown, Ohio.

The operation has direct access to a CSX Transportation line and features more than 10 miles of track to handle inbound and outbound unit trains. Adjacent to Route 45 and near Interstate 80, the operation will provide transload services for handling, loading and distributing hazardous and non-hazardous materials, Savage officials said in a press release.

Located in the heart of the Utica Shale, the OCC is "uniquely positioned" to serve the oil and gas markets by rail, they said, adding that the center is undergoing an expansion to add loop tracks to accommodate unit train loading. Savage provides transloading, logistics management and rail terminal operation services for oil and gas products.

Meanwhile, Crestwood Midstream Partners L.P. announced its subsidiary Crestwood Niobrara L.L.C. has entered into an agreement to acquire a 50 percent stake in Jackalope Gas Gathering Services L.L.C. from RKI Exploration & Production L.L.C. for $108 million. The transaction is expected to close in the third quarter pending customary regulatory approvals.

The Jackalope gathering and processing system in Converse County, Wyo., will provide Crestwood an early-stage entrance into the emerging Powder River Basin/Niobrara Shale, and position the company for "significant future infrastructure development opportunities" in the gas and crude oil sectors, Crestwood officials said in a press release.

"With approximately 10 drilling rigs currently running in the area … and more than 1,000 estimated drilling locations in the current acreage dedication, we believe this investment has the potential to be another great, high-growth shale play like our Marcellus position," said Robert Phillips, chairman, president and chief executive officer of Crestwood Gas Services GP L.L.C. "In addition, the Jackalope platform provides additional opportunities for Crestwood to extend its value chain services to include NGL and crude oil storage, blending, truck and rail terminaling, transportation and marketing."



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