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Ray Energy’s Expansion Track

Midstream propane supplier Ray Energy builds up its rail and truck distribution, reports Contributing Writer Maura Keller.

Ray Energy Corp., a midstream wholesale propane supplier in Troy, N.Y., operates a strategic supply system incorporating multiple locations—and now it has one more.

The 114-year-old, fourth-generation family company recently opened a new propane rail and truck terminal in Hampton, N.Y. The 21-acre facility has a 16-spot rail siding (with an operational capacity of 28) and on-demand switching provided by Vermont Railroad. The company’s railcar mover provides the ability to offload 16 cars per day.

Ken Ray, president of Ray Energy, says the new terminal fills a supply gap in the Northeast and serves a key market in the overall Ray Energy supply footprint. The company held a grand opening at the terminal on Aug. 23.

At the new site Ray Energy uses a mix of rail carriers, enabling it to better cope if service by one or more carriers is interrupted.

“One unique advantage we built into this facility was railroad diversification,” Ray says. “Four Class One railroads—Canadian Pacific, Canadian National, Norfolk Southern, and CSX—serve the terminal, which allows for greater flexibility for any unforeseen events with one railroad. All these railroads interconnect with the Vermont Rail System, our delivering carrier, at different points.”

The Hampton facility features four 60,000-gallon bulk tanks which provide storage for 240,000 gallons with expansion approved for up to 360,000 gallons. Added to the 480,000 gallons that can be stored on rail cars, the facility will have the ability to store 840,000 gallons of fuel availability to meet demand during peak winter months in the Northeast.

As Ray explains, two dual-sided rail towers with retractable arms can unload two rail cars in three hours. Previously installed piping allows the company to bring two additional dual-sided rail towers online with minimal lead time.

The new terminal is designed to benefit commercial and industrial propane users and propane dealers in the area. “The terminal provides local storage for a more reliable supply and quicker response to our customers,” Ray says. “Bringing propane supply directly to the market reduces truck traffic and allows transportation companies to be more efficient.”

Last winter propane supply for the Northeast had to be sourced partly from Virginia and central New York. This new location will allow for the propane to be sourced and stored locally—providing additional reliability for Ray Energy’s customers. “Our location on the border of New York and Vermont was strategically selected to better serve propane marketers in Massachusetts, New Hampshire, Vermont, and New York,” Ray says.

The loading rack has high-speed pumps, which load a 12,000-gallon transport in less than 20 minutes, reducing wait times during the busy winter season.

About a half-dozen propane dealers, including Proctor Gas in Proctor, Vt., are in proximity to the Hampton terminal.

“Their transportation costs are greatly reduced, with quicker and more convenient access and better reliability of propane supply,” Ray says. “The product will be readily available” to those dealers, Ray says, and that will save dealers having to run a transport on, say, a four-hour roundtrip to Selkirk, N.Y., from Proctor, Vt.

Because dealers begin purchasing supply far ahead of the heating season, a new terminal can take time before it is running full bore. Dealers typically arrange for supply from multiple sources, and when they make changes, they often shift volume from one supplier to another gradually, over a few seasons.

For example, Judy Taranovich, president and owner of Proctor Gas, Inc. in Proctor, says her company started purchasing Proctor Gas’s fuel supply in the spring of 2014 for the 2014-15 heating season.

“That spring I met Stephen Heffron of Ray Energy at the [National Propane Gas Association] show in Atlanta,” Taranovich says. “Unfortunately, I had purchased all my product for that year, but… I wanted to do business with them. The following year I kept my promise and gave them a small piece of my supply. I have increased that amount each year, doing the largest piece this coming 2018-19 season.”

For more than 50 years, family-owned and -operated Proctor Gas has been providing its customers with 24-hour propane services. Proctor Gas’ operations manager and Taranovich attended the ribbon cutting and open house for Ray Energy’s Hampton terminal.

“I have to say, what a beautiful facility it is. I was impressed not only with the state-of-the-art terminal and the amount of product they will be able to move, but also with the care that was taken with the outside appearance and attention to detail, including making the inside comfortable for the employees,” Taranovich says. “Great care was taken in making the site pleasing to the eye for the neighbors and a comfortable work environment as well. This says a lot about the company and how they care for the people around them. I like doing business with people who have that mindset.”

Taranovich stresses that any new supply point in New England is a plus—especially during the coldest time of the year.

“When we have difficult weather, including ice and snow, having more storage close will be a big help,” Taranovich says. “It’s like having a little extra insurance.”

It’s also a huge benefit to Taranovich personally and a big part of the reason Ray Energy earned so much more of Proctor Gas’ supply this year.

“Their terminal is sixteen miles from my plant,” Taranovich says. “I consider myself a very loyal person and I explained to Steve way back in the beginning, in order for me to purchase propane through Ray Energy, I have to take it away from a company that has done nothing wrong and has taken good care of me. But a supply point sixteen miles away was too big of a carrot to pass up. The transportation alone is a big savings for me. So far, they have fulfilled every promise they have made to me, so hopefully 2018-19 will be a good year for both of us.”

One of Ray Energy’s key logistical services is that the company has its own transportation division, allowing control over deliveries to its customers and providing for more efficient service.

“It also enables us greater flexibility in making sure a reliable propane supply gets to these accounts on a timely basis,” Ray says.
Ray Energy offers price management tools designed to reduce risk and manage price volatility for its customers.

In addition, the new terminal provides safe fuel access and better management while helping to reduce truck and rail traffic to and from the Albany, N.Y., terminals, while also decreasing greenhouse gas emissions and infrastructure pressure on New York state highways, the company says. The terminal also offers on-site back-up power, which can be delivered as needed to emergency outage sites.

“The terminal will reduce truck traffic in the region by bringing propane directly to the market,” Ray says. “Ray Energy runs its own transports and is able to more efficiently serve its industrial customers from the new terminal.”

The facility houses a new office building with room for propane safety training, video conferencing and meetings, a driver’s area with hot and cold drinks, a restroom, and a safety information area.

“The addition of this plant will serve a key market in the overall Ray Energy strategic supply footprint. With the increase in propane demand, the Northeast depends on approximately seventy-five percent of its propane supply from rail, an increase of over fifty percent from a few years ago,” Ray says. “We can now reliably supply our customers the volumes they need—any time of year—with improved safety and service capabilities and better efficiencies.”

State-of-the-art technology provides electronic data transmission of every load and smart hoses secure product and help to protect personnel.

The third truck-loading stanchion is expected to be online by the end of the year with expansion for a fourth, independently operated truck loading bay planned for 2019. Undeveloped space on the parcel of land leaves room for further expansion.

Taranovich points out that the location enables Ray Energy to bring product in from both the U.S. and Canada. “Having another supply point in New England can only help everyone,” she says.

 

Posted Friday, October 12, 2018

Photos courtesy of Ray Energy Corp.

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