Sharon Dunn | The Greeley Tribune (Greeley, Colo.)
An almost $40 million crude rail loading facility is planned for an industrial site south of Evans, a move being lauded as a savior for a long-idle property.
The 224-acre site, abutting the Union Pacific Railroad to the north and Weld County Road 33 to the west in the southernmost edge of Evans, was previously slated and zoned to become the Great Western Ethanol Plant.
For four years, the site was expected to break into the growing fuel industry. But the developers had about $3 million in loans coming from New Frontier Bank, which failed, and then the subsequent recession put a stop to the project.
The land, though zoned industrial, has sat vacant all these years with nary a nibble.
Now, ARB Midstream, a Denver-based company formed earlier this year, plans to infuse $37 million into the area if the project is approved by the city. The plan is to build a crude rail loading facility with three loops, with the capability of handling 120-unit crude trains to take crude from the prolific Niobrara play to markets on the east and west coasts. The facility would create about 25 jobs.
“It’s a pretty exciting thing to see some activity out there,” said Evans City Manager Aden Hogan. “We’re hopeful that we’ll be successful with this group, and it could attract other folks here. We don’t have a tremendous amount of industry.”
ARB Midstream CEO Adam Bedard met with Evans officials last week to discuss his plans for the site, what he’s calling the Niobrara Connector, or NiCon. He hasn’t made a formal application yet, but plans to soon.
The idea of ARB Midstream is to provide another avenue for area producers to move their crude in a field with tightening infrastructure. Oil would be trucked into the facility and offloaded into storage tanks until it could be offloaded onto the rail cars.
At present, one crude pipeline moves oil to only one market, Cushing, Okla., from Weld County. Two more pipelines are in the works, but not fast enough for Bedard.
As area crude production increases throughout the field, there’s less room available in the pipeline, adding more pressure to find a way out or run the risk of laying down drilling rigs.
Many producers take advantage of not only the White Cliffs pipeline, which starts in Platteville and moves south to Oklahoma, but a new rail offloading facility near Hudson off of Interstate 76. There’s a rail loading station in Carr, but nothing in between.
Demand for moving crude out of the area is growing, and Bedard, who has been analyzing the crude market for years in Denver, knows the numbers will only go up. Companies are increasingly shying away from long-hauling crude out of the basin, mostly because of the expense, but the potential for environmental impacts, as well.
While oil production out of Weld County is about 200,000 barrels of oil a day now, he expects that to rise to 500,000 to 700,000 barrels per day in just three and a half years.
NiCon would be in the middle of the DJ Basin — a large basin beneath all of Weld and neighboring acreage in Wyoming and Nebraska from which producers are seeing so much growth in the last four years — and may offer producers an easier, and closer, option for offloading their crude, Bedard said.
He said it won’t increase the number of trucks on the road. In fact, it could just reduce their mileage because it will be closer to offload.
He said he’d like to get the facility up and running within 12 to 15 months, starting in the winter with what is called manifest rail, in which a couple of crude cars are added to existing trains.
At full build-out, he hopes to ship trains full of crude out every three to six days.
“We’re looking at capturing 5 percent of total Weld County production,” Bedard said. “We’re hoping to move 35,000 barrels a day.”
Bedard said he’s talked to some of his new neighbors, a vegetable farmer to the east, and a farm equipment distributor to the south.
He is conducting a traffic study now, and said it is likely his company will have to make some upgrades to Weld 33, as it is only a dirt road now.
Bedard said he still needs to get an air permit, and perform a fiscal impact and drainage study. Overall, he said, the property is in great shape to transform it into the next crude-by-rail facility.
“It’s centrally located, and it has a lot of great attributes,” Bedard said. “There’s enough acreage, it has a great rail spur … and there are no weight restrictions. At the end of the day, we’ll be able to get our project to market fairly quickly.”
This article was written by Sharon Dunn from Greeley Tribune, Colo. and was legally licensed through the NewsCred publisher network.