Tulsa World: Magellan: Ethanol pipeline possible

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Magellan: Ethanol pipeline possible

By ROD WALTON World Staff Writer
Published: 3/17/2009 2:22 AM
Last Modified: 3/17/2009 4:50 AM

Work on a proposed 1,700-mile ethanol pipeline could begin within a few years if Magellan Midstream Partners LP believes the project is feasible, company officials said Monday.

Tulsa-based Magellan is working with ethanol producer Poet LLC to determine the feasibility of a pipeline stretching from the Midwest to the Northeast. As reported on tulsaworld.com, the $3.5 billion project could take two years to obtain financing and permitting, and another two years to build.

Gasoline prices currently below $2 shouldn't derail the feasibility since Congress is requiring a shift toward blending refined petroleum products with renewable fuels such as ethanol, Magellan spokesman Bruce Heine said.

"As long as the law does not change, we believe the most efficient, cost-effective and reliable way to transport ethanol from the Midwest to other markets will be by pipeline," he said.

"We simply see a future opportunity to expand our transportation services to include renewable fuels like ethanol."

Many retail outlets in Tulsa and across Oklahoma are selling gasoline blended up to 10 percent with ethanol. Magellan's terminal facility in west Tulsa stores up to 35,000 barrels of ethanol.

Sioux Falls, S.D.-based Poet produces more than 1.5 billion gallons of ethanol annually from 26 plants. The pipeline could gather corn and cellulosic ethanol from Iowa, South Dakota, Minnesota, Illinois, Indiana and Ohio for transporting to terminals in the Northeast , according to reports.

"Poet adds valuable experience as a leader in ethanol production, marketing and logistics to this project," Magellan CEO Don Wellendorf said.

The feasibility of the joint Magellan-Poet project depends on several studies looking into the technical and economic viability of transporting ethanol by pipeline, officials said.

Rod Walton 581-8457
rod.walton@tulsaworld.com By ROD WALTON World Staff Writer

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