Magellan, Buckeye Partners Studying Midwest Ethanol Pipeline

Pipeline could supply more than 10 million gallons a day.

Magellan Midstream Partners, L.P. and Buckeye Partners, L.P. announced Tuesday they have begun a joint assessment to determine the feasibility of constructing a dedicated ethanol pipeline. The proposed ethanol pipeline system would safely and efficiently deliver renewable fuel ethanol from the Midwest to distribution terminals in the northeastern United States. The proposed pipeline could have the capacity to supply more than 10 million gallons of ethanol per day, enough to meet the needs of millions of northeastern motorists who purchase 10% ethanol blended gasoline or higher ethanol blends such as E85. The pipeline would gather ethanol from production facilities in Iowa, Illinois, Minnesota and South Dakota to serve terminals in major markets such as Pittsburgh, Philadelphia and the New York harbor. The project, which preliminarily has been estimated to cost in excess of $3 billion, would span approximately 1,700 miles and would take several years to complete.

The feasibility of this project is dependent upon the successful outcome of ongoing studies addressing technical and economic issues associated with the transportation of ethanol via pipeline, stated the companies. Congressional support and assistance is necessary for a project of this nature given the changing federal policies associated with renewable fuels. In addition to assessing governmental support, financing and technical issues, Magellan and Buckeye stated that the feasibility study would also review construction requirements, construction costs, project economics, regulatory issues and other matters. The technical and feasibility studies could be complete in the latter half of 2008.

Source: Feedstuffs

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