CVR’s Wynnewood refinery to receive SCOOP crude from new pipeline
Velocity Central Oklahoma Pipeline LLC, a wholly owned subsidiary of Velocity Midstream (Velocity), has entered into definitive agreements with a subsidiary of CVR Refining, LP (CVR) for the construction of a crude oil pipeline and terminal directly linking the fairway of the South Central Oklahoma Oil Province (SCOOP) to CVR’s Wynnewood refinery.
CVR will hold a 40% stake in the newly formed JV, Velocity Pipeline Partners, LLC (VPP), and will contract with VPP for transportation services. Velocity will act as manager of the JV and operate the pipelines following the completion of the pipeline's construction.
In addition to the Wynnewood refinery, which has a rated capacity of 70 Mbpd, CVR Refining also owns and operates a crude oil refinery in Coffeyville, Kansas, with a rated capacity of 115 Mbpd. The Wynnewood refinery is located in close proximity to the SCOOP play and the Cushing hub. Velocity's new crude oil project provides the Wynnewood refinery with direct pipeline access to SCOOP production. The new pipeline also enables producers in the SCOOP to segregate their heavier crude barrels, produced from the Springer and Woodford oil formations, from their lighter barrels, produced from the Woodford condensate formation.
Once completed, the addition of Velocity's VPP pipeline will allow producers to gather and transport crude oil and condensate from points in Grady, Stephens, Garvin, McClain and Carter counties to both the Wynnewood refinery and the Cushing Hub, where CVR Refining maintains significant market outlets, crude storage and pipeline access to its Coffeyville refinery. CVR Refining also owns and operates significant crude oil logistics assets throughout the SCOOP play. The construction of this new crude pipeline allows the company to further optimize those logistical resources. Additionally, the pipeline will add flow assurance in inclement weather as well as reduce traffic and provide other benefits to producers.
"CVR Refining currently purchases significant volumes of SCOOP production by way of its wholly owned truck gathering fleet and the addition of this new pipeline provides the opportunity to further enhance crude supply to our Wynnewood refinery," said Jack Lipinski, CEO of CVR Refining.
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