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Kinder Morgan, Martin Midstream to develop crude oil rail terminal in Texas

Yesterday, Kinder Morgan Energy Partners L.P. (KMP) and Martin Midstream Partners L.P. announced they formed Pecos Valley Producer Services L.L.C., a joint venture that plans to develop a multi-commodity rail terminal in Pecos, Texas, to serve the Permian Basin’s growing oil and natural gas industries.

The transload facility will be constructed and operated by a subsidiary of Watco Cos. L.L.C., a company in which KMP holds an equity position. Located along a Pecos Valley Southern Railway line and adjacent to a Union Pacific Railroad mainline in Pecos, the rail terminal will provide crude oil hauling, storage, transloading and marketing services.

The terminal’s first stage is slated to be operational by May. After it has been fully developed, the facility will encompass about 85 acres and feature daily rail-car capacity from 300 to 600.

The facility will provide producers access to light Louisiana sweet crude oil markets, KMP officials said in a prepared statement. KMP and Martin Midstream Partners are discussing plans to develop a frac sand unit train terminal to service the area.

The Pecos facility will become Watco’s eighth crude-by-rail terminal to serve the burgeoning shale oil industry, said Allan Roach, Watco’s senior vice president of business development.

Contact Progressive Railroading editorial staff.

More News from 2/28/2012