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BNSF-served crude terminal on tap for joint venture in Wyoming; more frac sand on tap for producer in Wisconsin

Meritage Midstream Services II L.L.C. and Arch Coal Inc. last week announced they created Black Thunder Terminal L.L.C., a joint venture that plans to develop a BNSF Railway Co.-served rail terminal to provide crude oil handling, storage, rail loading and marketing services to producers in Wyoming's Powder River Basin (PRB) as well as downstream refiners.

Arch Coal will provide reclaimed land, a rail switching and loop and other existing infrastructure at its Black Thunder mining complex in Campbell County, Wyo., for the venture, while Meritage Midstream will contribute capital and build and operate the terminal. Meritage Midstream will own a majority interest in Black Thunder Terminal.

Because most of the required rail infrastructure already is in place, early stage crude transloading operations from inbound trucks to outbound trains are expected to begin in September, Meritage Midstream and Arch Coal officials said in a joint statement. The proposed joint venture is subject to customary approvals, which the companies expect to receive in three to six months.

The U.S. Geological Survey estimates that the PRB contains about 1 billion barrels of recoverable crude oil.

"The Powder River Basin has been the largest coal-producing region in the country for many years and currently accounts for approximately 40 percent of U.S. coal production. Now, new drilling technologies are being applied to legacy oil fields in the basin, allowing operators to expand their drilling programs," said Meritage Midstream Chairman and Chief Executive Officer Steve Huckaby. "What the basin lacks is sufficient pipeline and rail infrastructure at the right location to move crude oil and condensate to the highest value markets."

For more information on various western shales and basins and their impacts on railroads, follow this link to read an article ("Rails, Tales and Western Shales") that appears in Progressive Railroading's May issue.

Meanwhile, Northern Frac Proppants L.L.C. (NFP) announced the first shipments of frac sand have departed from Alma Center, Wis., marking the first-phase startup and operation of its new rail-served frac sand mine and plant near Black River Falls, Wis.

"The demand for our northern white frac sand proppant has been very strong as we continue to build processing facilities in key locations on different Class I rail lines to better serve customers in all major North American shale plays," said NFP President Jeff Alston in a press release.

The Alma Center plant is NFP's second frac sand mine and processing operation in Wisconsin. The two facilities are projected to produce more than 1 million tons of frac sand annually.

Contact Progressive Railroading editorial staff.

More News from 5/20/2013