Velocity Midstream Signs Deal For Gardendale Pipeline, Terminal

July 2011, Vol. 238 No. 7

Velocity Midstream Partners, LLC has secured long-term commitments from Shell Western E&P for transportation and terminal services for Shell’s light oil and condensate production from the Harrison Ranch (also known as the Piloncillo Ranch) in Webb and Dimmit counties, Texas. 

Shell has significant long-term development plans for its 100,000+ contiguous acreage position, which lies in the Eagle Ford Shale. Velocity has begun construction on the 12-inch Gardendale Pipeline, which will transport product through Webb, Dimmit and La Salle counties, terminating at Velocity’s Gardendale Hub near Gardendale, Texas. The Gardendale Pipeline and Hub are scheduled to be operational in the fall. 

The Gardendale Pipeline will gather and transport a rapidly growing volume of light oil and condensate from several large producers and deliver that production to Velocity’s Gardendale Terminal. The Gardendale Terminal and Hub will have 100,000+ barrels of initial storage and will provide access to downstream take-away pipelines, truck loading and unloading facilities, as well as U.S. Development Group’s rail-loading facilities adjacent to Velocity’s Terminal. The Gardendale Pipeline will also serve as an extension of Velocity’s Catarina Pipeline and Terminal facilities located in Catarina, TX. 

At the Gardendale Terminal, Velocity is formalizing interconnection agreements with several downstream pipelines including Enterprise Products Partners L.P. and Plains All American Pipeline, L.P. Velocity is also finalizing terms with several drilling producers regarding gathering and transportation pipelines serving the Eagle Ford Shale’s lower API gravity oil window. Velocity plans to build its Eagle Eye oil pipeline both west and east of the Gardendale Hub. With these commitments, these oil pipeline projects will also be in service this year, soon after the Gardendale Hub becomes operational. 

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