Posted on 08/22/2014 5:11:04 AM PDT by thackney
Valero Energy Corp.’s Memphis, Tenn., refinery will begin receiving more low-cost domestic crude oil in two years as part of a plan by another company to build a pipeline to the plant.
Houston-based Plains All American Pipeline LP said Thursday it plans to build a pipeline that would deliver as much as 200,000 barrels a day of crude oil to Valero’s Memphis plant when it’s completed in late 2016.
The 440-mile, 20-inch pipeline will link Plains’ Cushing, Okla., terminal to Valero’s plant and cost an estimated $900 million.
Locally based refiner Valero holds an option until January 2016 to buy a 50 percent interest in the project, to be called the Diamond Pipeline, Plains said in a statement.
“The Diamond Pipeline will provide a direct link to our Memphis refinery from Cushing, providing a more cost-effective and secure supply,” Valero said in a statement. “We are very pleased with this development, and to have entered into this long-term agreement with Plains All American.”
Valero didn’t say when it may make a decision about buying an interest in the pipeline.
Plains said the project “is underpinned by a long-term shipping agreement with Valero and a related contract for storage and terminaling services” at its terminal in Cushing.
In a note to clients, Wells Fargo Securities’ senior analyst Roger Read said he considers the project to be a positive development for Valero “as it provides confidence in ultimately lower crude delivery costs to Memphis.
“Valero’s interest in this pipeline likely stems from the fact that current deliveries of some Bakken (Shale) barrels to this refinery follow a circuitous path,” Read said.
Valero delivers crude by rail to its St. James, Louisiana, terminal and then ships the crude by barge on the Mississippi River to the 195,000-barrel-a-day Memphis plant. So direct deliveries “of either light or heavy crudes would likely lower crude costs and improve margins for the Memphis refinery, in our view,” Read wrote in his note.
Plains? spelling error? Plans?
Plains is name, ok...confusing title.
Plains All American Pipeline is the company name.
http://www.paalp.com/our-company/overview-1749.html
Thanks, yes,I finally realized that..
Plains is in the process of running a 12 inch line across 5 miles of the back end of the big ranch and just finished a 1 3/4 mile run across my place with an 8 inch line.
A few shown below may already be completed.
Your attached maps are interesting. Mostly, they look like money for several of my manufacturing clients in Tulsa that support pipeline construction and maintenance.
The Texas map was from an article a year ago so it might be most all completed. But there still is plenty of other work going on.
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