Plains All American to build Eagle Ford oil pipeline

Christopher E. Smith
OGJ Pipeline Editor

HOUSTON, May 18 -- Plains All American Pipeline LP (PAA) plans to build a 300,000 b/d, 130-mile crude oil and condensate pipeline, a marine terminal facility, and 1.5 million bbl of storage to serve growing Eagle Ford production in South Texas. A long-term throughput agreement with Chesapeake Energy Marketing Inc., a subsidiary of Chesapeake Energy Corp., underpins the construction plans.

Chesapeake agreed earlier this month to a 10-year, 100,000 b/d shipping agreement with Enterprise Products Partners for capacity on the Phase II extension of EPP’s 350,000 b/d Eagle Ford oil pipeline (OGJ Online, May 6, 2011).

PAA also agreed to provide Chesapeake Midstream Development LP the opportunity to acquire up to a 25% joint ownership interest in the project. PAA and Flint Hills Resources have similarly executed a memorandum of understanding regarding Flint Hills’ potential joint ownership of the project. Flint Hills operates a 300,000 b/d refinery in Corpus Christi, Tex.

PAA expects the pipeline to enter service in fourth-quarter 2012 at a cost of about $330 million.

Contact Christopher E. Smith at chriss@ogjonline.com.

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