NuStar to further expand Eagle Ford oil pipeline system, terminal
Houston (Platts)--13Dec2012/147 pm EST/1847 GMT
NuStar Energy has entered into a long-term pipeline and terminal
services agreement with ConocoPhillips that will expand the liquids terminal
and pipeline operator's South Texas Crude Oil Pipeline System, NuStar said
The agreement will include a pipeline expansion project for NuStar that
serves ConocoPhillips' growing Eagle Ford Shale production in South Texas,
NuStar said in a statement. Also, new pipeline and terminal facilities will
give Eagle Ford producers a transportation alternative for their growing
production, the terminal and pipeline operator said.
NuStar President and CEO Curt Anastasio said in a statement that the
expansion, "backed by major producers like ConocoPhillips, cements NuStar's
position as a key logistics provider for the Eagle Ford Shale play."
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Last month, NuStar said it agreed to buy TexStar Midstream Services LP's
crude oil pipeline, gathering and storage assets and NGL assets in the Eagle
Ford region for $425 million.
Closing of the TexStar acquisition is "imminent," NuStar spokesman Chris
Cho said Thursday.
Meanwhile, Anastasio said NuStar has "extensive" pipeline and terminal
assets already operating throughout the area with the capacity to support an
expansion of the size it announced on Thursday. The infrastructure will help
support what he called the Eagle Ford's "incredible" production growth.
NEW PIPELINE TO EXPAND SYSTEM
A new NuStar pipeline will originate at a 100,000-barrel NuStar terminal
to be built near Pawnee, Texas. That line will connect to NuStar's existing
12-inch pipeline system between Pettus and Three Rivers, Texas. NuStar will
connect its existing 12-inch pipeline to its Oakville, Texas, terminal
for crude delivery to the NuStar North Beach terminal.
The crude will be transported to Corpus Christi via NuStar's existing
16-inch pipeline, and via new pipeline connections that will be built to
Corpus Christi refineries.
Also, NuStar will provide truck-receiving facilities at the new Pawnee
terminal and at the recently completed Oakville terminal.
In addition, NuStar said it is building a new ship dock in Corpus
Christi to support the North Beach terminal under a long-term lease with the
Port of Corpus Christi. The private dock facility and refinery connections
will enable NuStar to further expand its pipeline systems to meet growing
South Texas production, the company said.
The pipeline expansion project will be completed during fourth-quarter
2013, while the new dock facilities are projected to be finished in
first-quarter 2014, NuStar said.
Anastasio said NuStar expects to invest $100-$120 million for the
expansions, which are backed by a 10-year throughput commitment. He said the
projects should generate around $15 million/year in incremental EBITDA once
fully implemented, while the expansions would generate some EBITDA next
year, the bulk will be earned in 2014 and beyond.
--Starr Spencer, firstname.lastname@example.org
--Edited by Robert DiNardo, email@example.com