Crude oil storage company Fairway Energy Partners on Thursday announced the closing of an undisclosed amount of private equity financing from Haddington Ventures, with proceeds to be used to construct the first phase of the Pierce Junction crude oil storage facility.

Fairway will convert three existing underground storage caverns at the Pierce Junction Salt Dome in south Houston, Texas, into crude oil storage service and will build-out all requisite pipelines, brine ponds, interconnects and pumping capacity to put the facility into commercial service, Kallanish learns.

The initial phase of the project is expected to be in service by the end of 2016 and has been designed to allow for storage of roughly 10 million barrels (MMBbl). Overall, Fairway has expansion rights up to a total of approximately 20 MMBbl at Pierce Junction.

Phase I also includes the construction of two separate bi-directional, 24-inch pipelines to connect the facility to the existing Houston area crude oil grid, adding more than one million barrels per day (MMBPD) of pipeline receipt and delivery capability in Houston.

The proposed lines will traverse roughly 21 miles across the Houston area to connect the caverns to the Genoa Junction and Speed Junction crude hubs. This allows Fairway to connect to inbound crude oil pipelines from the Permian Basin and Eagle Ford Shale play, the Mid–Continent and Canadian regions, as well as the Gulf of Mexico.

The hubs provide downstream connectivity to terminals, refineries and water outlets located in the Houston Ship Channel, Texas City and Beaumont/Port Arthur, Texas, market areas.

“This project will serve the growing crude oil storage needs driven by the significant delivery of new pipeline-delivered crude oil into and through the Houston market,” said Fairway CEO Chris Hilgert.

FBR Capital Markets & Co., a subsidiary of FBR & Co., served as the sole placement agent and initial purchaser in the offering.

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