Company Plans $900M, 440-Mile Crude Oil Pipeline Across Arkansas

by Lance Turner  on Thursday, Aug. 21, 2014 1:34 pm  

Oil pipelines at a refinery. Plains All American Pipeline L.P. plans to build a 440-mile crude oil pipeline to connect its Plains Cushing, Okla. terminal to the Valero Memphis Refinery. (Photo by Shutterstock)

Plains All American Pipeline L.P. said Thursday that it will build a 440-mile crude oil pipeline to connect its Plains Cushing, Okla. terminal to the Valero Memphis Refinery.

The $900 million project, called the Diamond Pipeline, is expected to be complete in "late 2016," the publicly traded firm (NYSE: PAA) said in a news release.

A map on Plains All American’s website shows the line’s proposed route, which the company cautioned is subject to change. It shows the pipeline entering Arkansas just south of Fort Smith and cutting across the north-central part of the state on its way to Memphis.

The company said the, during construction, the pipeline will support about 1,500 contract construction jobs in Oklahoma and Arkansas. Once complete, it will support 15 permanent jobs and "generate an estimated $11 million per year in taxes for communities along the pipeline route. The company said 20-inch pipeline will be able to carry up to 200,000 barrels per day of domestic sweet crude.

The company aims to have engineering plans finalized and permits and right-of-way acquisitions complete by late next year.

Brad Leone, the company's director of corporate communications, said Plains All American must first obtain permits from the U.S. Army Corps of Engineers and U.S. Fish and Wildlife. Once it receives the Corps of Engineers permit, it will request another permit from the Arkansas Public Service Commission.

Plains All American said the pipeline will enhance the Valero refinery’s long-term ability to produce gasoline, diesel and jet fuel for the greater Memphis and eastern Arkansas area. It said Valero holds an option until January 2016 to become a partner in the Diamond Pipeline and buy a 50 percent interest.

 

 

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