Plains All American Pipeline, L.P. (PAA), announced today that it has entered into a commitment to construct a new 130-mile crude oil and condensate pipeline, a marine terminal facility and 1.5 million barrels of storage capacity to service growing Eagle Ford production in south Texas. The project is expected to cost approximately $330 million and to be in service in the fourth quarter of 2012. To underpin the project, PAA has secured a long-term throughput agreement with Chesapeake Energy Marketing, Inc., a subsidiary of Chesapeake Energy Corporation (CHK). The project is designed to provide approximately 300,000 barrels per day of take-away capacity from the western region of the Eagle Ford play to Corpus Christi, TX and other Gulf Coast markets.
PAA has agreed to provide Chesapeake Midstream Development, L.P. the opportunity to acquire up to a 25% joint ownership interest in the project. Additionally, PAA and Flint Hills Resources have executed a Memorandum of Understanding regarding Flint Hills' potential joint ownership in this project. Flint Hills Resources operates a 300,000 bpd refinery in Corpus Christi.
PAA owns and operates a network of approximately 16,000 miles of liquids pipelines, approximately 90 million barrels of liquids storage capacity and handles over 3 million barrels of physical product on a daily basis.
Plains All American Pipeline, L.P. is a publicly-traded master limited partnership engaged in the transportation, storage, terminalling and marketing of crude oil, refined products and liquefied petroleum gas and other natural gas related petroleum products. Through its general partner interest and majority equity ownership position in PAA Natural Gas Storage, L.P. (NYSE: PNG), PAA is also engaged in the development and operation of natural gas storage facilities. PAA is headquartered in Houston, Texas.