Fairway Energy Partners' Houston crude storage facility commences commercial operations

HOUSTON -- Fairway Energy Partners, LLC (Fairway) today announced that it has commenced initial commercial operation at its Pierce Junction Crude Oil Storage Facility. The project will serve the Houston area’s crude oil storage needs driven by the significant growth of pipeline-delivered crude oil into and through the Houston market.

Fairway began construction in 2015 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 the supporting infrastructure to put the facility into commercial service.

The recently completed phase of construction (Phase 1A) allows for the storage of crude oil in three segregated caverns that have a total capacity of approximately 7.5 million bbl. Fairway constructed brine ponds with approximately 6.5 million bbl of capacity and central pumping and metering facilities at the site.

Phase 1A also included the construction of two separate bi-directional, 24-in. pipelines that will connect the facility to the existing Houston area crude oil grid. The pipelines connect the facility to the Genoa Junction and Speed Junction hubs. This is expected to enable Fairway to receive inbound crude oil from the Permian and Eagle Ford Basins, the Mid-Continent and Canadian regions as well as the Gulf of Mexico. The hubs also are expected to provide downstream connectivity to terminals, refineries and water outlets located in the Houston Ship Channel, Texas City and the Beaumont/Port Arthur market areas.

The facility’s initial operating capacity is 70% subscribed. Now that Fairway has commenced operations, it is beginning to store crude oil for its customers, and Fairway is pursuing efforts to reach its full initial operating capacity.

“We believe Fairway’s facility is responding to what our customers want and what the Houston market needs: a more efficient crude oil market, which will result in lower costs for storing and shipping crude oil,” said Fairway CEO Chris Hilgert. “We look forward to providing agile and flexible services that enhance our customers’ market positions.”

Construction of Phase 1B, which will increase the physical storage capacity by approximately 2.6 million bbl to 10.1 million bbl and increase brine pond capacity to an equivalent capacity. That project is expected to commence in the second half of 2017, depending on customer commitments.