The courtroom showdown between a Louisiana oil exploration company and Union Pacific Railroad Co. over an SIT yard under construction in Livonia has taken a new twist.
A little over a month after Union Pacific sued WarHorse Oil & Gas of Jarreau, seeking an injunction prohibiting interference in its project to create storage for Louisiana chemical products awaiting transportation, WarHorse has asked a state district judge for an injunction against Union Pacific barring interference with its drilling. WarHorse filed its request Monday. Both matters are now pending in federal court.
The dispute centers on 2,450 acres in Pointe Coupee Parish once owned by Holloway Planting Co. Union Pacific bought the land in 1982, and WarHorse acquired a mineral lease for the property in 2013. The two companies failed to reach a compromise earlier this year over how to handle the land.
Given low gas prices, Union Pacific anticipated growing demand for storage from its customers, and in 2011 it began evaluating its need for expanding SIT, or storage in transit, space. In 2013, the railroad company decided to construct the Livonia SIT Yard on 75 acres of the property. Construction on the project began Aug. 3 and will take roughly a year to complete. It will include 21 yard tracks and two wye, or triangular junction, tracks to store railcars containing chemical products belonging to Union Pacific’s Louisiana customers.
In its lawsuit, WarHorse says it has one producing well on the site and plans for two others on the property. The company accuses Union Pacific of “destroying the drilling locations for the wells that had been staked and surveyed” and damaging a gravel road located on the lease used by WarHorse to access its wells. The company also alleges Union Pacific contractors have exposed pressurized natural gas flow lines operated by WarHorse without proper notification, “creating a potentially dangerous and/or hazardous situation.”
Should Union Pacific continue with the proposed construction, WarHorse attorneys write, the drilling company will be forced to use other drill sites to access its wells, which will add to “risk and expense, as well as the inability to maximize recovery of the mineral reservoir underlying the property.”
Lack of storage capacity requires Union Pacific to transport cars across Louisiana and into Texas for storage. Company officials say the Livonia SIT yard will allow Union Pacific to be near its customers’ plastics production facilities, “allowing Louisiana product to stay in Louisiana.”
The railroad reportedly is already in negotiations with several area petrochemical plants for SIT storage. The railroad says the project “complements Union Pacific’s overall expansion goals in Louisiana” and is a “strategic part” of serving Louisiana customers in the intra and interstate transportation of chemicals and plastics.
—Penny Font
