Plains All American Pipeline, L.P. (NYSE: PAA) today announced it is expanding its Gardendale Gathering system and constructing a new condensate stabilization facility in the Eagle Ford and building a new pipeline along the Gulf Coast. The projects are expected to be completed by the end of 2013 at a total cost of approximately $190 million.
The Gardendale Gathering system expansion involves constructing four crude oil gathering pipelines extending from Dimmitt and La Salle counties and terminating at PAA’s Gardendale Terminal in South Texas. The gathering lines, which range in size from 6 inches to 10 inches and total approximately 90 miles in length are designed to provide approximately 115,000 barrels per day of incremental gathering capacity. These lines will connect at Gardendale to long-haul pipelines, enabling shippers to deliver to Three Rivers, Corpus Christi or Houston area refiners. The new expansion pipelines are underpinned by producer agreements and are expected to be placed into service between the fall of 2012 and second-quarter 2013.
The new 80,000 barrel-per-day Eagle Ford condensate stabilization facility will be constructed adjacent to the Gardendale terminal. The facility is designed to extract Natural Gas Liquids (NGLs) from condensate, enabling the condensate to meet the shipping specifications of long-haul pipelines originating at Gardendale. The facility’s first 40,000 barrel-per-day phase, which also will include constructing related pressurized storage capacity, is expected to be in service in early October 2012. The second 40,000 barrel-per-day phase is expected to come into service near the end of 2012. The facility is underpinned by long-term commitments from producers on PAA’s Gardendale Gathering system and has the ability to be expanded based on increased production.
The new Gulf Coast pipeline is a 24-inch, 40-mile crude oil pipeline that will originate from PAA’s Ten Mile terminal in Mobile County, Ala. The project is underpinned by a long-term throughput and deficiency agreement with a shipper that includes the lease of approximately 1.5 million barrels of new and existing PAA storage capacity. The project is expected to be in service in the fourth quarter of 2013.