In early May, one year after Rangeland Energy LLC began building North Dakota’s first open-access crude marketing hub, the company expects to start receiving Bakken and Three Forks oil for testing and commissioning at its COLT Hub in Williams County.
At the same time, Rangeland will start building customer inventory for the hub and the COLT Connector, with rail service to begin the last week of May.
“The market’s response to COLT has been outstanding,” Rangeland President and CEO Christopher W. Keene told Petroleum News Bakken in an April 9 email. “We previously signed contracts with Tesoro, Flint Hills Resources (pipeline only) and Sunoco Logistics. Flint Hills recently amended their contract to include committed rail volumes in addition to their previously contracted pipeline volumes. “
And, he says, Rangeland just signed its fourth customer for its remaining rail capacity.
At the customer’s request, Keene did not divulge its name.
But he did say COLT is now “contracted for a little more than 100,000 barrels per day of unit-train loading capacity,” and is expanding its facility by 20,000 barrels a day to accommodate the increased rail volume.
‘Point of liquidity’ in the Bakken
Rangeland’s four COLT customers are all crude oil buyers.
“They are all refiners … who have an operational need for Bakken crude. In addition to supplying their own refining interests, they all also have interest in third party marketing,” Keene says. “By aggregating four large crude buyers at the COLT Hub, we have created a ‘point of liquidity’ in the Bakken.”
As a result, Keene says Rangeland has producers interested in “gaining access to the COLT terminal, leasing tankage and selling ‘bulk’ to our four rail customers. In addition, we are continuing to market our pipeline capacity — the COLT Connector — and our ability to build additional tankage.”
Pipeline services in and out of the Hub through Rangeland’s COLT Connector and other planned gathering lines are also part of the package.
The Connecter is a 21-mile, 10-inch, bidirectional pipeline that will connect the COLT Hub to the Beaver Lodge/Ramberg junction and will be capable of transporting an additional 70,000 barrels per day.
Rangeland says it is building a 120,000-barrel storage tank at Ramberg to facilitate these movements.
When Rangeland announced the initial deal with Flint Hills in November, Flint Hills President Brad Razook said that COLT’s “state-of-the-art facility” would “greatly enhance” his firm’s ability to serve its customers in the Williston basin. Among others, Flint Hills owns a large refinery in Rosemount, Minn. That both buys Bakken crude and produces products for the Mid-west.
In January, Rangeland announced an agreement with Strobel Strarostka Transfer for rail operation services at COLT.
Headquartered in Nebraska, Strobel was formed in 1946. The company’s primary focus is designing, constructing and operating rail trans-loading facilities for various industries, including the energy sector.
Rangeland was established in 2009 to focus on “developing, acquiring, owning and operating infrastructure for crude oil, natural gas and natural gas liquids, “with its primary focus being North Dakota and other shale oil and gas producing areas.
