Fairway Energy

Investment Status: active

Sector: Oil / Condenstate Storage

Investment Fund: Fund IV

Geography: Gulf Coast

Initial Investment: June 1, 2011

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 is constructing ~11 million barrels of bulk crude oil and condensate storage south of Houston on the Pierce Junction salt dome.  The project is scheduled to be in-service by January 2017 and will connect to major supply and offtake points in the Houston area, including connectivity to the Genoa Junction and Speed Junctions, to be able to receive crude oil and condensate from multiple inland supply basins and to distribute to multiple refinery markets throughout the Gulf Coast region.  Growth in the Gulf Coast downstream energy markets will be supportive of Fairway's project.  Given the low cost of developing storage in salt, Fairway can build new storage for much less than the cost of above ground tank storage.  

More information is available at www.fairwaymidstream.com