Posted on 09/08/2011 5:09:14 AM PDT by thackney
NuStar Energy LP and Valero Energy Corp. have agreed that NuStar will add to its pipeline system to enable Valero to transport more crude oil from the rapidly developing Eagle Ford shale to three of its South Texas refineries.
The changes will help Valero transport more crude to its plants in Three Rivers and Corpus Christi, where it has two refineries.
The deal between the two San Antonio-based companies “is part of a larger project to optimize our pipelines in South Texas,” NuStar spokeswoman Mary Rose Brown said, as part of improvements expected to cost $135 million to $150 million.
NuStar said it will reverse an 8-inch pipeline that now transports refined products, such as gasoline, from Corpus Christi to Three Rivers, and make it a crude-oil pipeline.
The pipeline is expected to be converted by the end of this month.
Also, NuStar said it will modify existing sections of its pipelines in South Texas and build new lines to transport crude.
NuStar will build 55 miles of new 12-inch pipeline that will connect to existing pipelines to move crude oil from Corpus Christi to Valero’s Three Rivers plant. That system is to be completed by the second quarter of next year.
“These projects are an important part of our ongoing strategy to increase our customers’ ability to move crude in South Texas,” NuStar CEO Curt Anastasio said. “With the growing production from the Eagle Ford region, NuStar is in the unique position to provide Valero and our other customers with quick transportation solutions given the fact that we have hundreds of miles of existing pipeline running from that region into Corpus Christi, where it can be refined or transported to other locations.”
Anastasio recently told shareholders that more crude shipped through its new pipelines and more storage at its terminals is expected to boost earnings for the company starting in the second quarter of 2012.
Valero spokesman Bill Day said NuStar’s additions “will help ease the logistics of getting lower-cost Eagle Ford oil to where it’s needed” at Valero’s refineries. Eagle Ford crude is less expensive for Valero to buy than imported oil.
Other projects as part of the improvement plan include NuStar’s deal with TexStar Midstream Services LP to transport crude from the Eagle Ford shale and a partnership with Oklahoma-based Velocity Midstream Partners LLC to develop a 70-mile pipeline to transport more than 100,000 barrels a day of Eagle Ford crude that will connect with a storage facility NuStar is building at Three Rivers, about 75 miles south of San Antonio.
Great news. The companies now drilling in the Eagle Ford do not provide much information on their efforts. However, producing wells are splendid. So much so that the Chinese want in.
What info are you looking for?
Production per well. Drilling schedules. Pipeline hookups.
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