Magellan and Buckeye studying 1700-mile US ethanol pipeline

In New York, Magellan Midstream Partners and Buckeye Partners said that they are investigating a 1700-mile, $3 billion ethanol pipeline from the Midwest that would take several years to construct. It was not revealed whether the proposed pipeline will connect the midwest to both the east and west Coasts, but the proposed pipeline length is consistent with serving high-demand east coast markets initially. The companies said they would complete their feasibility assessments this year.

Magellan recently announced that it is constructing biofuels blending systems at its terminal in west Tulsa, and will build four more systems in Oklahoma, Georgia and Delaware. The system permit trucks to load blends of ethanol from E10 to E85 and deliver within a 75 mile radius. Magellan currently has blending capabilities at 36 of its 81 US terminals.

Magellan is also constructing a 145,000-barrels of biodiesel storage facility at its New Haven, Connecticut terminal, and later this year will test transportation of a biodiesel blend via pipeline from Houston to Dallas.Magellan is potentially one of the partners that the state of Nebraska is in discussions with over a new ethanol pipeline. Magellan owns an 8,500-mile oil pipeline system that traverses from the Gulf Coast to the Midwest.

An official at the Nebraska Ethanol Office recently confirmed that plans were under discussion by several private firms to develop an ethanol pipeline from the Midwest to fuel markets such as Chicago and California. Kinder Morgan Energy, Colonial Pipeline, NuStar Energy as well as Magellan have been mentioned as potential partners. Costs are estimated to cost $1 million per mile of pipeline.

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