Centurion secures anchor shipper in Delaware basin

OREANDA-NEWS. October 16, 2015. Centurion Terminals has secured an anchor shipper for a planned system to move Delaware basin condensate and crude from west Texas to the Gulf coast.

The initial firm commitment involves a 10-year take-or-pay contract to ship 30,000 b/d of condensate from the Delaware basin to Brownsville, Texas, a company official said.

Centurion would not name the shipper only saying it is a "premier crude marketing company."

The deal allows Centurion to move forward with the project, the Delaware Basin Express, which will carry high Reid Vapor Pressure (RVP) condensate and crude from the company's Orla terminal in Reeves county, Texas, to Corpus Christi and Brownsville, giving access to international export markets.

The system will move through the prolific Eagle Ford shale, giving producers multiple takeaway options.

The first phase of the project includes building a 24-inch condensate and crude pipeline from the Orla terminal to the planned Pecos terminal, also in Reeves County.

The crude can move from there on the Union Pacific railroad to Centurion's Brownsville terminal which is under construction. The first phase of the Delaware Basin Express is expected to be operational in the third quarter of 2016.

The second phase of the project includes building a 24-inch condensate and crude pipeline from the Pecos terminal to Corpus Christi with a connection and storage hub in Three Rivers, Texas. The second phase is planned to be in service in the first quarter of 2018.

The Brownsville terminal will have 1.5mn bl of storage capacity and will include two processing towers that can process up to 50,000 b/d of condensate that could be used locally or exported. The facility will be equipped to receive crude by rail, truck and barge. The project will cost between \\$75mn and \\$100mn, a company official said.

The company broke ground on the Brownsville project last month and plans to place the terminal in service in the third quarter of 2016.

Centurion's planned Pecos terminal will be able to move about 160,000 b/d by rail to the Gulf coast. The company has purchased about 500 acres of land for that project.

The overall Delaware Basin Express project serves a growing market interest in exporting condensates.

Guidance issued last year by the US Bureau of Industry and Security states that distilled US condensates can be exported as freely as other refined products. The guidelines cleared a path for increasing US exports of the ultralight supply from fields like the Eagle Ford.