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Western Refining negotiating with Permian producers

By Luke Geiver | March 01, 2017

The prospect of increased oil production in the Permian and Williston Basin has Texas-based Western Refining Logistics both excited and in planning mode. After seeing an increase in oil volume movement by gathering lines and trucks from Q3 2016 to Q4 2016, WRL is already looking to add gathering lines in Texas. The company’s board has set aside roughly $27 million for 2017 gathering line construction projects.

Jeff Stevens, president and CEO, said WRL is already in advanced negotiations with producers in the Delaware Basin about constructing gathering lines. “We continue to believe that particular growth opportunities exist, particularly in the Permian,” he said. “As producers announce more production growth, we’ll have the opportunity to build more.” Further details of the advanced talks were not discussed.

In addition to gathering line build-outs and new storage terminal additions this year, Stevens also said the company may look to acquire existing assets. “We are excited about the potential for further development of our logistics presence in the Permian and Williston Basins,” Stevens said.

To end 2016, WRL completed the acquisition of St.Paul, Minnesota logistics assets capable of processing or handling Bakken-sourced crude.

Tesoro Corp., a refining and logistics company, announced late last year that it would acquire WRL for roughly $1.4 billion. The deal has not been completed to date.