Team Work For Pipeline Project
Kinder Morgan and Valero energy have finally come to an agreement on a new pipeline system. This could be great news for consumers and operators alike. Making oil and gas more accessible will then make it more affordable. Exciting news! Zacks has all the important details.
While both companies will own the pipeline system, Kinder Morgan will be the operator. Parkway Pipeline is expected to have an initial capacity of 110,000 barrels per day (bpd) that can be eventually expanded to over 200,000 bpd.
The refined products would be shipped from refineries in Norco, Louisiana to the Collins, Mississippi hub, owned by a subsidiary of Kinder Morgan –– Plantation Pipe Line Company. Kinder Morgan has a 51% stake in the petroleum transportation hub of which it is also the operator. Thereafter, the refined petroleum products will be distributed by the pipeline systems, including Plantation, to important markets in the southeastern United States from this hub.
The pipeline is expected to begin operations by mid 2013 after getting approvals from the concerned environmental and regulatory authorities. It is expected to be accretive for Kinder Morgan unitholders upon completion as the project has a long-term backing of a credit worthy shipper.
This big project is expected to boost fuel supplies and allow better transport of raw materials to refineries. This is a big project for KMP and VLO alike. I am anxious to see how this pipeline will effect oil and gas prices, and the markets in general.
Quotes taken from report by Zacks, Read the entire article here.
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