New crude oil terminal in Texas will help producers get oil from fields to refineries

Installing new oil production equipment can help well operators capitalize on the opportunities created by infrastructural development.

The explosion of energy production that has taken in place in the United States over the course of the past few years has been a boon for many sectors of the country's economy. With transportation fuels in steady supply and the cost of electricity declining, entrepreneurs and international companies have a host of reasons to look no further than America when they are thinking about the best place to pursue new business opportunities.

At the same time, the rapid increase in oil and gas output has created new obstacles for the U.S. energy industry. As the volume of resources being extracted from the ground has expanded, so has the need for new oilfield equipment and infrastructure that can handle the surge in production.

New transit network already partially operational

Western Refining is currently working to turn this challenge into an opportunity with the development of new transportation infrastructure in the oil-rich southwestern region of the country. The company recently announced the completion of the first phase of its Delaware Basin Crude Oil Gathering System, which will carry fluids from oil wells in Southern New Mexico and West Texas to nearby refineries.

The initial phase of the project centered on the construction of the Mason Station Crude Oil Terminal. The facility – located in Reeves County, Texas – will allow oil to be offloaded from trucks and pumped through the Kinder Morgan Pipeline to Western's refinery in El Paso. With considerable on-site storage capacity, Mason Station will also be able to serve as a transshipment point for oil being delivered to other refineries.

Western announced that this facility has started operating on April 11. Now, the company is working to complete other parts of the system. Phase two includes the development of 50 miles of new pipelines, which are scheduled to be completed by the end of the second quarter of this year. Once this aspect of the project is completed, the Delaware Basin System will reportedly be able to deliver up to 100,000 barrels of oil per day to the El Paso refinery.

Additional development would further add to the region's production capacity

Two additional phases of construction are currently being considered by Western. These efforts would connect an existing pipeline in New Mexico to the Delaware Basin System and expand the rail facilities at Western's refinery in Gallup, Texas.

"We continue to explore all options to expand and enhance our logistics capabilities in the Permian Basin and Four Corners regions," Jeff Stevens, president and CEO of Western Refining, explained in a press release. "Our unique location and existing infrastructure present us with a number of opportunities to maximize our flexibility to deliver shale crude oil to both our refineries, and potentially others, by capitalizing on the increased crude oil production in these regions."

In order for companies to capitalize on the growth of shipping and refining networks, they will need top-notch oil production equipment in place at their most promising sites. Installing hydraulic jet pumps can be especially beneficial. This powerful, versatile solution can be used to quickly complete drill stem testing and initiate or expand production, even from wells with damaged casing.