The Daley Note

Fast-Tracked Rail Expansion Could Lift Uinta Crude

Crude, The Daley Note, Uinta

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Uinta Basin oil producers could see much-needed takeaway added soon after the Bureau of Land Management (BLM) approved a rail terminal expansion under an expedited review process.

Coal Energy Group 2, a subsidiary of Wildcat Midstream, wants to expand the 270-acre Wildcat Terminal near Helper, UT by installing additional unloading bays, upgrading the loading systems and building a dedicated tank farm. The terminal can currently move 20 Mb/d of waxy Uinta crude from tanker trucks onto unit-train rail cars, according to the BLM application. The project would take loading capacity to ~100 Mb/d. The BLM approved the proposal on July 7 after a 14-day environmental review.

East Daley Analytics’ Uinta Basin Crude Oil S&D Report projects 2025 crude output to average ~184 Mb/d. The remote basin in northeastern Utah has longstanding takeaway constraints, limiting demand mostly to local refineries near Salt Lake City and some railing capacity.

With the Wildcat expansion creating up to 80 Mb/d of new takeaway, Uinta operators can deploy more rigs. Using the Uinta Production Scenario Tool, we estimate 2 additional rigs would add ~40 Mb/d of incremental production by 4Q28, bringing the average rig count to 11 from 9 currently in the basin. Natural gas production rises in tandem with oil drilling, increasing 5% to 915 MMcf/d with 11 rigs.

East Daley’s review points to plenty of upside from the Wildcat expansion, though producers may be reluctant to commit capital now due to lower crude oil prices. Wildcat Midstream says it is still seeking commercial commitments to back the full expansion.

The incremental barrels are likely to be railed to Gulf Coast refineries and blending terminals in PADD 3. The Wildcat Terminal connects to the Union Pacific and Burlington Santa Fe rail systems, which carry the crude to refineries in Texas and Louisiana, according to the BLM application (see map).

The Wildcat expansion will compete with Savage’s proposed Wellington Transload Terminal, both serving as transload stations to move Uinta crude out of the basin. A third proposal to expand the Uinta Basin Railway (an in-basin short line) will allow more direct access to the national rail network. With much of the infrastructure already in place, the Wildcat Terminal could jump ahead of other greenfield projects to begin service. – Gage Dwan

 

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