HOUSTON, Texas - Plains All American Pipeline, L.P. (NYSE: PAA) on Feb. 9 announced plans to construct its Shafter Expansion Project, which consists of a new Liquefied Petroleum Gas (LPG) pipeline system and related upgrades to its Shafter LPG processing facility near Bakersfield, Calif.
The project is underpinned by a five-year transportation agreement with a subsidiary of Occidental Petroleum Corp. and is currently expected to cost approximately $50 million. The pipeline will link the Shafter facility with Occidental's Elk Hills gas processing plant and related infrastructure. PAA has targeted placing the project into service during the third quarter of 2012.
The Shafter Expansion Project involves constructing a 15-mile LPG pipeline system with a designed throughput capacity of over 10,000 barrels per day as well as enhancing PAA's storage and rail capabilities at its Shafter facility. PAA's Shafter facility currently includes approximately 200,000 barrels of Natural Gas Liquid (NGL) storage, and a processing facility with butane isomerization capacity of 14,000 b/d and NGL fractionation capacity of 12,000 b/d.
PAA anticipates investing approximately $30 million on the Shafter Expansion Project during 2011, and making the balance of the investment during 2012. (Source: Business Wire, Feb. 9, 2011)