By SAABIRA CHAUDHURI
Plains All American Pipeline said it is constructing a new
310-mile, 20-inch crude-oil pipeline from McCamey, Texas, to
The pipeline, called the Cactus pipeline, is expected to be
placed into service in the first quarter of 2015.
Plains said it has entered into a letter of intent with a
third party regarding a long-term commitment for a majority of
the pipeline's capacity and is in discussions with several
potential shippers for the remaining capacity.
Total project investment is expected to
range from $350 million to $375 million.
It said the pipeline is expected to transport both sweet and
sour crude oil from the Permian Basin to the Eagle Ford
pipeline it operates as part of a joint venture with Enterprise
Products. The Eagle Ford pipeline serves markets in Three
Rivers, Texas, and Corpus Christi, Texas, and can supply the
Houston-area market through a connection to Enterprise
Products' south Texas crude-oil pipeline.
Plains noted that crude oil delivered through the Cactus
pipeline will have access to rail-loading capacity at the
Gardendale, Texas, station operated by PAA Natural Gas Storage
and access to the Eagle Ford barge-dock facility in the Corpus
Plains holds a 48% stake in PAA, the company's gas-storage
Plains added that the Cactus pipeline will initially be
designed to have a capacity of about 200,000 bpd, which can be
increased as demand warrants.
In February, Magellan Midstream agreed to buy Plains'
noncore refined-product pipelines and related assets in the
Rocky Mountain and New Mexico areas for about $190 million.
Plains has experienced strong demand as it benefits from a
huge boost in the US supply of onshore oil and natural gas.
While many producers have suffered from lower natural-gas
prices caused by a glut in the market, pipeline companies still
profit from moving increasingly large quantities of the
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