Velocity Central Oklahoma Pipeline and CVR Refining’s subsidiary are set to form a joint venture (JV) related to the former’s construction of a crude oil pipeline and terminal.
The pipeline and terminal will directly connect the fairway of South Central Oklahoma Oil Province (SCOOP) to CVR Refining’s Wynnewood refinery in Oklahoma, US.
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Located close to the Scoop play and the Cushing hub, the refinery has a rated capacity of 70,000 barrels per calendar day (bpcd).
The newly formed JV will be known as Velocity Pipeline Partners (VPP) and is to be 40% owned by CVR Refining.
CVR Refining CEO Jack Lipinski said: “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.”
Velocity will act as JV manager and operate the pipelines once the pipeline’s construction concludes. CVR will contract with VPP for transportation services.
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By GlobalDataThe new crude oil project of Velocity will provide the Wynnewood refinery direct pipeline access to Scoop production.
With the new pipeline, producers in the Scoop area will be able to segregate their heavier crude barrels that are produced from the Springer and Woodford oil formations, from their lighter barrels, produced from the Woodford condensate formation.
Velocity CEO Rick Wilkerson said: “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.”
Velocity also expects to start a subsequent crude oil pipeline project, looping the majority of its existing pipeline to provide producers with crude oil segregation along the entire Scoop fairway.
Upon completion, 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.
