NuStar Energy L.P. (NYSE: NS) has announced that it has entered into a long-term Pipeline and Terminal Services Agreement with ConocoPhillips that will allow expansion of NuStar’s South Texas Crude Oil Pipeline System. The agreement will include a pipeline expansion project for NuStar that will allow NuStar to serve ConocoPhillips’ growing production in the Eagle Ford Shale play, and new pipeline and terminal facilities will provide Eagle Ford producers with a cost-effective transportation alternative for their growing production.
“We are excited to announce another major, accretive expansion in the Eagle Ford region so soon after the acquisition of TexStar’s crude pipeline assets in the Eagle Ford region as it further expands the area our pipeline system can serve”
“We are excited to announce another major, accretive expansion in the Eagle Ford region so soon after the acquisition of TexStar’s crude pipeline assets in the Eagle Ford region as it further expands the area our pipeline system can serve,” said Curt Anastasio, President and CEO of NuStar. “This expansion, backed by major producers like ConocoPhillips, cements NuStar’s position as a key logistics provider for Eagle Ford Shale play. We are fortunate to have extensive pipeline and terminal assets already in operation throughout the region with the capacity to easily support an expansion of this size and help support the incredible production growth taking place in the Eagle Ford Shale play.”
A new NuStar pipeline will originate at a 100,000 barrel NuStar terminal to be constructed near Pawnee, Texas, and will connect to NuStar’s existing 12-inch pipeline system between Pettus, Texas 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. NuStar will also provide truck-receiving facilities at the new terminal near Pawnee, Texas and at its recently completed terminal in Oakville.
In addition, NuStar is already constructing a new ship dock in Corpus Christi that will 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 continue to expand its pipeline systems to meet the production growth taking place in South Texas. The pipeline expansion project will be completed during the fourth quarter of 2013, while the new dock facilities are expected to be complete in the first quarter of 2014.
Anastasio stated that NuStar expects to invest approximately $100 million to $120 million for these expansions, which are backed by a 10-year throughput commitment. According to Anastasio, the projects are expected to generate approximately $15 million in incremental, annual EBITDA once fully implemented. He noted that while the expansions would generate some EBITDA in 2013, the vast majority will be earned in 2014 and beyond.
Source: Business Wire
To access over 3,000 of the latest oil projects from across the world visit Projects OGP for free trial today