Wednesday, June 13, 2012

Iowa Pacific completes Permian Basin upgrades

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Iowa Pacific Holdings said Wednesday it has opened its new locomotive repair shop on the Texas-New Mexico Railroad (TNMR) subsidiary, a key rail line in the Permian Basin oilfield.

Iowa Pacific Holdings President Ed Ellis and Rep. Steve Pearce (R-N.M.) celebrated the event Tuesday with a ribbon-cutting ceremony in Eunice, N.M., also marking the completion of the second phase of TNMR's track upgrade program, which added $10 million in new rail and ties, and allowed for improved running speeds as a result of the better track condition.

TNMR is pursuing two additional phases of the project later in 2012 and into 2013, investing in excess of another $10 million in further improvements, Chicago-based IPH said.

"The Permian Basin oilfield is part of America's drive to energy independence, and the TNMR has become key to timely delivery of a variety of oil field products," said Ellis. "By continuing to invest in the rail line, we are helping to ensure the continued viability of the companies who operate in the oil field."

"I commend Iowa Pacific for their commitment to our local economy here in eastern New Mexico," said Rep. Pearce. "Small business growth is my top priority, and investment in infrastructure drives growth in employment for the long term. Energy-efficient rail transportation is essential to economic development in this region."

TNMR operates between a connection with Union Pacific at Monahans, Tex., and Lovington, N.M., a distance of roughly 100 miles. The line was built in the 1920s when the Permian Basin oilfield was first developed.

Iowa Pacific expects TNMR annual carloads of nearly 50,000 per year when all planned facilities are fully operational. TNMR is also investing alongside UP in construction of a new yard facility in Monahans, Tex., designed to support interchange of freight cars between the two carriers. The yard is expected to be operational later this summer.