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Global Partners LP (NYSE: GLP) today announced it has executed a pipeline connection agreement with Tesoro Logistics whereby Tesoro Logistics' High Plains Pipeline System will build, own and operate a new seven-mile pipeline lateral from its Lignite, ND crude oil station to Global's 100,000 barrel crude oil storage tank at the Basin Transload facility in Columbus, ND. Crude oil is expected to begin flowing to the new Columbus-bound branch in the third quarter of 2013, enhancing the movement of crude from the mid-continent to Global’s destination assets on the East Coast.
“Strategic expansion of our crude gathering system is a key component of the rail logistics strategy we are deploying across our assets in the mid-continent region, ” said Eric Slifka, President and Chief Executive Officer of Global Partners. “Our agreement with Tesoro Logistics is an important step toward that objective. The pipeline connection will tie our Columbus location directly to the Tesoro High Plains Pipeline System. The new branch will augment the volume of crude currently being transported by truck from the wellhead to our Columbus storage facility. The pipeline-connected gathering system will enhance the ratability of the Columbus terminal, and make the terminal available to a broader area of the region that may not be accessible by truck. This agreement increases our efficiency to gather and move price-advantaged crude from the mid-continent to East Coast refining markets. Of the 738,000 barrels per day of North Dakota production, Global and its customers are moving approximately 120,000 barrels per day of that volume to high value destination markets.”
Tesoro’s High Plains Pipeline System includes an approximate 45,000 barrels per day truck-based crude oil gathering operation and approximately 700 miles of pipeline and related storage assets. This system gathers and transports crude oil produced from the Bakken Shale/Williston Basin area, one of the most prolific onshore crude oil producing basins in North America.