Keyera, a Canadian-based midstream company that primarily has provided natural gas gathering and processing and related services north of the border, said this week that it has hired Tulsa-based Matrix Service Inc. to build it a 12-tank storage and blending operation for crude oil at the terminal.
Once it becomes operational, officials said Keyera’s Wildhorse Terminal will add 4.5 million barrels of working storage capacity to the overall Cushing terminal, which analysts estimated had about 90 million barrels of capacity in November.
This latest project edges the terminal ever closer to being nearly twice the size it was in just 2008, when it had only 49 million barrels of capacity.
A spokesman for Keyera told The Oklahoman Wednesday company officials wouldn’t make additional comments about their plans.
However, in its news release, Keyera stated it will spend about $185 million as a 90 percent owner in Wildhorse to get the tanks, which will be both for storage and blending services, built by Matrix.
The other owner, Lama Energy Group, owns 10 percent of the project, and will have an option to increase that to a 30 percent share by year’s end, the release stated.
The release also stated the added capacity is backed by fee-for-service, take-or-pay storage arrangements ranging from two to six years.
Start date: 2020
Wildhorse will be connected by pipeline to two other existing storage terminals at Cushing, a feature Keyera stated will provide its customers with access to the majority of crude oil streams flowing in and out of the overall terminal.
Keyera said it expects its operation to be running by the middle of 2020.
“The Wildhorse terminal is a strategic investment for Keyera as it expands its midstream infrastructure in the United States at one of the largest crude oil storage and trading hubs in North America,” David Smith, Keyera’s president and CEO, stated in the release.
Keyera also processes, transports, stores and markets natural gas liquids, produces and sells isooctane and operates a condensate system in Alberta, Canada.
News that Cushing’s capacity is increasing again might surprise some, given that its storage levels haven’t approached its capacity for years.
The amount of oil stored at the terminal dropped from about 50 million barrels in May 2013 to about 31 million barrels at the end of 2014.