TULSA, Okla., and SUGAR LAND, Texas, Sept. 19, 2016 /PRNewswire/ -- Velocity
Midstream Partners, LLC ("Velocity") today announced that Velocity
Central Oklahoma Pipeline LLC, a wholly owned subsidiary of
Velocity Midstream, has entered into definitive agreements with a
subsidiary of CVR Refining, LP (NYSE: CVRR), related to Velocity's
construction of a crude oil pipeline and terminal directly linking
the fairway of the South Central Oklahoma Oil Province ("SCOOP") to
CVR Refining's Wynnewood,
Oklahoma, refinery.
CVR Refining will hold a 40 percent stake in the newly formed
joint venture, Velocity Pipeline Partners, LLC ("VPP"), and it will
contract with VPP for transportation services. Velocity will act as
manager of the joint venture and operate the pipelines following
the completion of the pipeline's construction.
In addition to the Wynnewood
refinery, which has a rated capacity of 70,000 barrels per calendar
day (bpcd), CVR Refining also owns and operates a crude oil
refinery in Coffeyville, Kansas,
with a rated capacity of 115,000 bpcd. The Wynnewood refinery is located in close
proximity to the SCOOP play and the Cushing hub. Velocity's new crude oil project
provides the Wynnewood refinery
with direct pipeline access to SCOOP production. The new pipeline
also enables producers in the SCOOP to segregate their heavier
crude barrels, produced from the Springer and Woodford oil formations, from their lighter
barrels, produced from the Woodford condensate formation.
Velocity also expects to commence a subsequent crude oil
pipeline project looping the majority of Velocity's existing
pipeline. The loop will provide producers crude oil segregation
along the entire SCOOP fairway, further reducing crude trucking
costs. This forthcoming project will allow Velocity to leverage its
existing footprint, multi-line rights of way and construction and
operations teams to quickly and cost-effectively construct the
second pipeline and expanded terminal facilities. In addition to
the construction of crude transportation pipelines and terminals,
Velocity will continue to build out gathering laterals and
injection stations to better serve SCOOP producers.
Once completed, the addition of Velocity's VPP pipeline and
crude oil loop will allow producers to gather and transport crude
oil and condensate from points in Grady, Stephens, Garvin, McClain and Carter counties to both the Wynnewood refinery and the Cushing Hub, where
CVR Refining maintains significant market outlets, crude storage
and pipeline access to its Coffeyville refinery. CVR Refining also owns
and operates significant crude oil logistics assets throughout the
SCOOP play. The construction of this new crude pipeline allows the
company to further optimize those logistical resources.
Additionally, the pipeline will add flow assurance in inclement
weather as well as reduce traffic and provide other benefits to
producers.
"We are excited to undertake this project with CVR Refining to
add a crude oil pipeline project to our existing pipeline assets in
the SCOOP," said Rick Wilkerson,
Velocity's chief executive officer. "The Woodford and Springer crude is attractive to Midcontinent
refiners and, coupled with the reduction in crude transportation
costs, provides the producers in SCOOP with very strong and
reliable markets."
"CVR Refining currently purchases significant volumes of SCOOP
production by way of its wholly owned truck gathering fleet and the
addition of this new pipeline provides the opportunity to further
enhance crude supply to our Wynnewood refinery," said Jack Lipinski, chief executive officer of CVR
Refining. "We are pleased to partner with the experienced team at
Velocity on this project and look forward to working with them on
future endeavors."
In 2015, Velocity completed construction of a 100,000 barrel per
day light oil pipeline through the entire core of the SCOOP play
for one of the SCOOP's largest producers. Producers in the SCOOP
target the Springer and
Woodford shale across parts of a
multiple-county area located south and southwest of Oklahoma City. Velocity's multi-pipeline
corridor through the fairway of the SCOOP allows it to reach more
than 400,000 proved gross acres of the Woodford formation and more than 200,000
proved gross acres of the Springer
formation, all of which are located within less than 10 miles of
the pipeline corridor.
About Velocity Midstream Partners, LLC
Velocity
(www.velocitymidstream.com) is an independent midstream service
provider that engineers, constructs, and operates crude oil and
natural gas gathering and transportation solutions. Velocity was
formed in 2008 by Rick Wilkerson and
Mike Parker. Van Nguyen, Vice President of Engineering,
joined Velocity in 2010. Velocity partnered with Energy Spectrum
Capital (www.energyspectrumcapital.com) in 2008. Velocity currently
operates three crude terminals 50+ miles of crude oil gathering and
pipeline transportation assets through the core of the SCOOP play
in Central Oklahoma.
About CVR Refining, LP
Headquartered in Sugar Land, Texas, CVR Refining, LP is an
independent downstream energy limited partnership that owns
refining and related logistics assets in the Midcontinent United
States. CVR Refining's subsidiaries operate a complex full coking
medium-sour crude oil refinery with a rated capacity of 115,000
barrels per calendar day (bpcd) in Coffeyville, Kansas, and a complex crude oil
refinery with a rated capacity of 70,000 bpcd in Wynnewood, Oklahoma. CVR Refining's
subsidiaries also operate supporting logistics assets including
approximately 340 miles of active owned and leased pipelines,
approximately 150 crude oil transports, a network of strategically
located crude oil gathering tank farms, and approximately 6.4
million barrels of owned and leased crude oil storage capacity.
For More Information:
Velocity Midstream Partners,
LLC
Rick Wilkerson
President and CEO
918-574-2323
rwilk@VelocityMidstream.com
CVR Refining, LP
Investors:
Jay Finks
Vice President of Finance
281-207-3588
IR@CVRRefining.com
Media:
Angie
Dasbach
Vice President of Corporate Affairs
281-207-3550
MediaRelations@CVRRefining.com
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SOURCE CVR Refining, LP