Construction Begins On Parkway Pipeline

October 2012, Vol. 239 No. 10

Construction is under way on the 136-mile, 16-inch Parkway Pipeline. Kinder Morgan Energy Partners is building the pipeline to transport gasoline, jet fuel and diesel from refineries in Norco, LA to an existing petroleum transportation hub in Collins, MS, owned by Plantation Pipe Line Company. (Kinder Morgan owns 51% of Plantation Pipe Line Company and operates the system.) From this hub the refined petroleum products will be transported by pipeline systems, including Plantation, that serve major markets in the southeastern United States.

Kinder Morgan is partnering with Valero Energy Corp. in this joint venture that will own Parkway Pipeline LLC. The pipeline will have an initial capacity of 110,000 bpd with the ability to expand to over 200,000 bpd. The project is supported by a long-term throughput agreement. Pending receipt of environmental and regulatory approvals, the approximately $220 million pipeline project is expected to be in service by mid-year 2013.

Construction of the pipeline will follow existing utility rights-of-way wherever possible to minimize environmental impacts.

In other news, Kinder Morgan Energy Partners and Phillips 66 have entered into an agreement for Kinder Morgan to transport Eagle Ford crude and condensate to Phillips 66’s Sweeny Refinery in Brazoria County, TX.

Under the agreement, Kinder Morgan Partners plans to build an approximately 43-km, 12 inch diameter lateral pipeline to extend its Kinder Morgan Crude Condensate (KMCC) pipeline. Kinder Morgan will provide Phillips 66 with a significant portion of the lateral pipeline’s initial 30,000 bpd of capacity, which is expandable to 100,000 bpd.

KMP will invest approximately $US90 million in the project, which also involves adding associated receipt facilities by constructing a five-bay truck offloading facility and three new storage tanks with approximately 360,000 bbls of crude/condensate capacity at Kinder Morgan’s DeWitt Station in DeWitt County, TX and Wharton Pump Station in Wharton County, TX. Pending receipt of environmental and regulatory approvals, construction is scheduled to begin in the fourth quarter of 2012.