Wednesday, December 22, 2010

Koch Pipeline Co. to begin building 16-Inch crude oil pipeline in Texas

WICHITA, Kansas - Koch Pipeline Co., L.P. will create the capacity to move an additional 120,000 b/d of Eagle Ford crude in late 2012.

Koch Pipeline said it has received final shareholder approval to build the new pipeline into Karnes County, Texas.

“This will be our most extensive project to date to connect Eagle Ford producers with refineries in Corpus Christi,” said Kim Penner, president of Koch Pipeline. “It not only allows us to ship more crude oil to Corpus Christi refiners and to the Flint Hills Resources waterborne terminal at Ingleside, but it also improves our efficiency and reliability as this project includes new tanks and a new truck station.”

The new 16-inch line will have future expansion capability of more than 200,000 b/d and include direct pipeline connections to producer tank batteries in Karnes and DeWitt counties. A new station, likely near Helena, will connect into Koch Pipeline’s existing crude system in Pettus and Refugio.

Brad Urban, senior vice president of supply for Koch Pipeline’s affiliate Flint Hills Resources, said: “This project fits well with our plan to process a large volume of South Texas crude oil and condensate at our Corpus Christi refinery as well as move a large volume of those products via the water. We continue to evaluate projects to enhance our Corpus Christi refinery processing capability and believe the majority of what we will refine in the future will be South Texas domestic crude oil and condensate.”

By the end of 2011, Koch Pipeline will have added 10 to 15 new employees and completed several other projects that add more than 140,000 b/d of new pipeline capacity in South Texas. The company is the largest transporter of South Texas crude oil.

Engineering for the new pipeline to connect Eagle Ford producers to Corpus Christi, Texas, has begun. Construction, which will require numerous contractors, is expected once project permits are received.

“We are evaluating several other major pipeline projects in South Texas in addition to this one, including a project to connect producers in Western counties such as Dimmit and LaSalle,” Penner said. “We are working with producers and our affiliate Flint Hills Resources to ensure producers have transportation to markets for the rapid growth of crude oil production projected in South Texas.”

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