Fairway Energy

INVESTMENT STATUS:

REALIZED

SECTOR:

OIL / CONDENSTATE STORAGE

INVESTMENT FUND:

FUND IV

GEOGRAPHY:

GULF COAST

INITIAL INVESTMENT:

JUNE 1, 2011

DATE OF DISPOSITION:

JULY 31, 2019

INVESTMENT STATUS:

REALIZED

SECTOR:

OIL / CONDENSTATE STORAGE

INVESTMENT FUND:

FUND IV

GEOGRAPHY:

GULF COAST

INITIAL INVESTMENT:

JUNE 1, 2011

DATE OF DISPOSITION:

JULY 31, 2019

Storage For The Surge In North American Crude Oil And Condensate Production

Fairway’s Pierce Junction crude oil storage project was conceived as energy producers began to have success unlocking the vast crude oil and condensate reserves within the North American shale plays.  As more North American crude oil and condensate volumes have entered the Gulf Coast markets, refiners have begun to switch to domestic, inland supply sources.  With dwindling waterborne imports, flexibility and storage that was historically provided by ship (“floating storage”) must now be replicated by inland storage facilities, creating a need for more Gulf Coast bulk oil storage.  Further, the recent lifting the crude oil export ban will likely pull additional volumes into the Gulf Coast market to be moved to the water for export.  

Fairway constructed approximately 6.5 million barrels of operational bulk crude oil and condensate storage capacity south of Houston on the Pierce Junction salt dome.  The project began commercial operations in April 2017 with capability to receive crude oil and condensate from multiple inland supply basins and to distribute to multiple refinery markets throughout the Gulf Coast region.  However, competitive pressures exerted from several fully integrated midstream crude oil and condensate service providers in the Houston Ship Channel area ultimately led to Fairway entering Chapter 11 bankruptcy proceedings on November 2018, with a Section 363 sale process concluded in March 2019.  The result was the sale of Fairway’s assets to the then debtholders of Fairway, which the Plan of Liquidation became effective July 31, 2019.