20
Gas & Oil
October 2012 Edition - Dix Communications
www.OhioGO.com
New pipeline from Ohio to beneďŹ t, say experts Kim Leonard Pittsburgh Tribune-Review
A
new petroleum pipeline from Ohio would ease gasoline shortages in Western Pennsylvania and help stabilize prices at the pump, experts said Thursday. Sunoco Logistics Partners L.P. plans to build about 160 miles of underground pipeline in Pennsylvania and Ohio, connecting the new lines with some existing ones, to transport refined oil products from the Midwest to eastern Ohio and the Pittsburgh region. The move by the Philadelphia-based master limited partnership is “part of a national trend. We are seeing a lot of structural changes� designed to flow petroleum from expanding production areas and refineries to markets where demand exists, said Brian L. Milne, refined fuels editor for commodity information services provider Telvent DTN. “We have a lot of pipelines in this country, but they are not going where they are needed right now,� he said. Philadelphia-based Sunoco said its Allegheny Access pipeline will be able to deliver 85,000 barrels a day when it goes into operation in the first half of 2014, and it could scale up to 110,000 barrels of capacity. New lines will be up to 12 inches in diameter and mostly will be built along existing rights of way, running parallel to current pipes when possible, Sunoco Logistics said.
Shippers provided sufficient commitments to use the pipeline in a recent “open season� to push the project forward, said the partnership, which also includes Inland Corp., which is 83 percent-owned by Sunoco Logistics. The cost was not disclosed. Industry experts listed reasons to build the pipeline now: —Crude oil from domestic regions such as North Dakota, now the second-largest U.S. oil producer after tripling output in the last three years, is as much as $40 a barrel cheaper than the imported crude that East Coast refiners process. That creates a price advantage. —Several refineries on the East Coast and in the Caribbean have been idled in recent years, and because most of Pittsburgh’s supply traditionally has come from the East, the region has experienced volatile prices and some shortages. —Expansions have been completed or are underway at several Midwest refineries, including BP’s facility in northwest Indiana and Marathon Oil’s in Detroit. With more capacity, refineries will be able to process domestic as well as Canadian crude oil. “This essentially gives Pittsburgh the ability to source production from the Great Lakes, rather than just the East Coast,� Patrick DeHaan, senior petroleum analyst for GasBuddy.com, Continued on pg. 33
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