By OGJ editors
HOUSTON, Feb. 15 -- Sunoco Logistics Partners LP has agreed to buy the idle Amdel crude oil pipeline in Texas and plans to expand its capacity to 40,000 b/d from 27,000 b/d by yearend.
The 500-mile, bidirectional pipeline will start delivering crude from Nederland to Midland on June 1.
Sunoco Logistics agreed to purchase the Amdel line and the White Oil pipeline from Alon USA Energy Inc., Dallas, for $68 million. The 40,000 b/d, 25-mile White Oil pipeline connects the Amdel line at Midland with Alon's 70,000 b/d Big Spring, Tex., sour crude refinery. The refinery currently receives more than 90% of its crude through the Mesa Pipeline System, which is scheduled to shut down July 1.
Alon will retain the right to transport crude from the Gulf Coast through the pipelines for an initial term of 10 years, with an option for 4 additional 30-month periods. It has committed to ship at least 15,000 b/d.
The capacity expansion will give Alon the option of delivering additional crude to its refinery from the Sunoco Logistics Gulf Coast terminal or from other terminals in Midland. Alon said its excess sulfur capacity and asphalt capabilities should allow it to refine additional heavy and sour grades of crude.
