Plains All American Pipeline to Build New Pipeline
Plains All American Pipeline
|Friday, April 23, 2004
Plains All American Pipeline, L.P., through its subsidiary Plains Pipeline, L.P., has signed a pipeline transportation service agreement with Coffeyville Resources Refining & Marketing, LLC ("CRRM"). Under the agreement, Plains Pipeline will construct, own and operate a 100-mile, 16-inch pipeline that will transport crude oil from Plains All American's terminal in Cushing, Oklahoma, to the Broom Station in Caney, Kansas. At Caney, the new pipeline will connect to an existing third-party pipeline that will transport crude oil to CRRM's refinery in Coffeyville, Kansas.
The new pipeline is subject to a long-term agreement that provides the point of origination for shipments on the pipeline will be Plains All American's Cushing Terminal. In addition the agreement requires CRRM to meet minimum shipment requirements during the initial 5-year term of the contract. The Partnership has scheduled the mill runs for the pipe, is actively working on adapting the Coffeyville right-of-way for the new line and expects to begin generating revenue during the first quarter of 2005. The expected cost for the project is approximately $33 million.
"We are pleased to announce this 'win-win' arrangement with CRRM," said Greg L. Armstrong, Chairman & Chief Executive Officer of Plains All American. "This organic growth project highlights the flexibility of our assets and our ability to provide value-added services to our customers. In addition, this project offers the Partnership an attractive rate of return on its incremental investment and also increases the anticipated utilization of our current Phase IV expansion project at our Cushing Terminal."
Philip L. Rinaldi, Chief Executive Officer of Coffeyville Resources, said "We are delighted to be working closely with Plains on this important project, the completion of which will ensure our refinery access to Cushing-based crude oil for the foreseeable future."