PAA Acquires New Terminal In Williston/Watford City Area, Johnson's Corner, McKenzie County -- March 12, 2015

This is a big story -- maybe the biggest story of the week or month for me, but probably not for anyone else. Whatever.

Bakken.com is reporting:

Plains All American Pipeline LP recently acquired an oil terminal, currently under construction, that is well-positioned to become a central logistics hub in the Bakken oil patch, according to a report from Zacks.com.

The deal will give PAA rights to use the terminal previously owned by Legion Terminal LLC. The terminal is located in Johnson’s Corner, McKenzie County, North Dakota.

The facility, expected to be operational by the third quarter of 2015, will have 500,000 barrels of crude oil storage, pipeline interconnects, truck facilities and various other assets. The terminal has also been approved for a possible storage expansion of up to 2 million barrels.

As reported by Zacks, analysts anticipate the area, rich with oil and natural gas reserves, will continue to be one of the nation’s largest oil producing reserves for many years to come.

The U.S. Energy Information Administration (EIA) reports that North Dakota’s proved reserves have surpassed federal offshore reserves in the Gulf of Mexico.

As production continues, the demand for midstream energy services in the region will continue to grow. The terminal is conveniently located near PAA’s existing Williston Basin assets, increasing the company’s presence in the core of the shale play.

The company’s Trenton crude oil gathering system and its Manitou and Van Hook rail trans-loading facilities are located within 50 miles of the new terminal, bolstering the marketability of the facility, according to Zacks.

When I saw this I wrote to a regular reader:

I have said several times that every time I go up to Williston, I see more and more storage tanks -- thinking Williston could be a mini-Cushing hub.

If the Keystone goes through, a mini-Cushing hub would absolutely be needed to store Bakken oil before it enters that pipeline.

Disclaimer: regular readers know that I am inappropriately exuberant about the Bakken. I have no formal training or background in the oil and gas industry. The story above sounds like part (or all) of it comes from a press release. It may not be a big deal. But I think it's a big deal. I would not make any investment, financial, or relationship decisions based on what I posted above or what I post anywhere on this blog, but it is what it is. This and $1.79 will get you a cup of coffee at a Starbucks in the DFW metroplex. However, I think this is a pretty big deal. If it's important to you, go to the source, perhaps starting with Zacks or PAA.

To put this in context, one may want to look at how much crude oil storage there is by PADD.  Note, specifically PADDs 1 and 4.

The EIA states crude oil storage for PADD 1 and 4 at this site (dynamic), refineries:

• PADD 1: 15 million bbls
• PADD 4: 4 million bbls

The EIA states crude oil storage for PADD 1 and 4 at this site (dynamic), crude tank farms:

• PADD 1: 4 million bbls
• PADD 4: 13 million bbls

Again, I am probably misreading this data. If it's important to you, go to the source.