Tailwater Capital

Tailwater Announces Partnership to Develop Eagle Ford Crude Oil Pipeline System

DALLAS, November 06, 2013

TexStar Midstream Logistics, L.P. (“TexStar”), a privately held crude oil gathering and logistics partnership located in the Eagle Ford shale region of South Texas and a portfolio company of energy-focused private equity firm Tailwater Capital LLC (“Tailwater”), announced today that it has entered into a definitive agreement with Calumet San Antonio Refining, LLC, a wholly-owned subsidiary of Calumet Specialty Products Partners, L.P. (“Calumet”), under which TexStar will own and operate a 30,000 barrel per day crude oil pipeline system that will supply significant volumes of Eagle Ford crude oil to Calumet’s San Antonio, Texas refinery.

Under the terms of the 15-year agreement, TexStar has committed to install and operate the Karnes North Pipeline System (“KNPS”), an 8-inch, 50-mile pipeline that will transport crude oil from Karnes City, Texas – a major center of oil production in the Eagle Ford shale formation – to Calumet’s Elmendorf, Texas terminal, a key supply hub for Calumet’s San Antonio refinery. TexStar expects to deliver at least 10,000 bpd of crude oil through the KNPS-Elmendorf terminal supply route once the line comes into service during the fourth quarter 2014.

As a result of this agreement, Calumet expects to significantly reduce its cost to transport crude oil to the San Antonio refinery, where it currently receives crude oil deliveries by truck. Over time, Calumet expects to increase the volume of crude oil shipped on the KNPS above 10,000 bpd, which should contribute to incremental revenue generation for TexStar.

About Calumet Specialty Products Partners

Calumet Specialty Products Partners, L.P. (NASDAQ: CLMT) is a master limited partnership and is a leading independent producer of high-quality, specialty hydrocarbon products in North America. Calumet processes crude oil and other feedstocks into customized lubricating oils, solvents, and waxes used in consumer, industrial, and automotive products. Calumet also produces fuel products including gasoline, diesel, and jet fuel. Calumet is based in Indianapolis, Indiana and has eleven facilities located in northwest Louisiana, northwest Wisconsin, northern Montana, western Pennsylvania, Texas, and eastern Missouri. For more information, please visit www.calumetspecialty.com.

About TexStar Midstream Logistics

TexStar Midstream Logistics, L.P. was formed in 2014 and currently operates a terminal and 70-mile crude oil gathering system between Karnes County and a San Antonio refinery. The company also owns and operates a multi-grade, crude blending terminal in southern Frio County and 140-miles of pipe between San Antonio and Corpus Christi. TexStar is currently developing a project in the Houston Ship Channel where it owns rights of way between the Houston Ship Channel and Mont Belvieu. TexStar is actively pursuing projects in the Permian Basin, South Texas, and East Texas. For more information, please visit www.texstarlogistics.com.

About Tailwater Capital LLC

Tailwater Capital is a Dallas-based private equity firm providing growth equity capital across all domestic energy sectors. The Managing Partners have focused on the energy sector for the past 14 years, investing over $1 billion in equity capital. For more information, please visit www.tailwatercapital.com.

Back to news and insights