New railroad planned to move products in Eagle Ford shale

Fuel Fix: 
Three San Antonio real estate developers will break ground next month on the Live Oak Railroad, hoping to snag a slice of a South Texas Eagle Ford shale rail boom.

Live Oak Railroad aims to open by late March 2013 south of Three Rivers in Live Oak County, with 28,000 feet of track along the Union Pacific line. Plans call for it to serve as a liquids terminal for natural gas and crude oil.

The project is being driven by oil and gas production in the Eagle Ford Shale, a 20-county swath of the state that stretches from the border toward East Texas.

“We’re awash in hydrocarbons, and they really don’t have a place to go,” said Barton Simpson, a partner in the rail project with Greg Seay and Ken Rector.

Simpson thinks that in the short term, there’s an immediate need to move sand for hydraulic fracturing into the region, but that rail – and not just pipelines – will be an increasingly important way to move crude oil out of the shale play.

The partners are working with San Antonio-based Howard Energy Partners, a natural gas pipeline company and an investor in the project, to develop the liquids terminal.

“They’re land experts, and we’re not. It’s a perfect partnership,” company president and CEO Mike Howard said. “What we bring is the oil and gas expertise.”

Howard said he anticipates mostly natural gas liquids and crude will be handled at the Live Oak Railroad, which should help fill something of a rail yard void.

“In between Gardendale and Gonzales, there isn’t a rail hub that could offer multiple services,” Howard said.
South Texas continues to attract investments to get the shale oil and gas out of the ground to markets elsewhere in Texas for processing.  Meanwhile, New York continues its passive aggressive approach to killing shale development, while the energy Luddites continue to oppose development of the resources underground.  No wonder they have the blue state blues.

Something you will notice about this project--they are not looking for a handout from Washington.  That is becasue projects like this make money and projects like high speed rail lose money.


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