The new entity, Black Thunder Terminal LLC, will develop a rail terminal providing oil handling, storage, rail loading and marketing services to producers in the PRB and downstream refiners, according to company representatives. Meritage will possess majority interest in the new venture.
Meritage officials were upbeat. “This is a natural, common sense and forward thinking partnership for both companies and their customers and investors—as well as the region and the country,” said Meritage Midstream CEO Steve Huckaby.
Arch will contribute reclaimed land, rail switching, loop and other existing infrastructure at its Black Thunder complex in Campbell County. Meritage, for its part, will contribute capital while building and operating the terminal east of Arch’s operations near the basin’s oil production activity. BNSF Railway will serve the terminal.
Since most rail infrastructure is already in place, early stage oil transport from inbound trucks to outbound trains will begin as early as Q3 2013. Based on demand, the terminal will have an increase in shipping capacity to 120,000 barrels of crude oil daily, up from an initial 10,000 barrels per day, leaving significant expansion room. The PRB is one of the most resource-rich areas of the U.S., with massive reserves of coal and crude oil alike.