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Expansion and JV of Red River Pipeline

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World Pipelines,


Plains All American Pipeline has announced a capital-efficient expansion and new joint venture of its existing Red River Pipeline system. Delek Logistics Partners, LP has purchased from a Plains’ subsidiary a 33% ownership interest in a new Red River Pipeline Company LLC joint venture for US$128 million. Plains retained a 67% interest in the joint venture and will continue to operate the Red River system. In support of this expansion, Delek US increased its long-term throughput and deficiency agreement on the Red River system from an existing 35 000 bpd to 100 000 bpd. The expansion enables additional volume pull-through from Cushing and the Permian to the US Gulf Coast markets, providing additional supply optionality for shippers.

“This is a win-win deal that fits our strategy of optimising and expanding existing systems while exercising capital discipline,” stated Jeremy Goebel, Executive Vice President – Commercial, Plains All American. “This transaction expands long-term alignment with a natural shipper, supports and funds the expansion of the system, increases Plains’ net committed annual cash flow, and provides proceeds to fund our capital programme or lower debt.”

The Red River pipeline system extends from Cushing, Oklahoma to Longview, Texas. The expansion will increase the total system capacity from approximately 150 000 bpd to approximately 235 000 bpd through the addition of pumping capacity and is expected to be completed during the first half of 2020. Approximately 30% of the expanded Red River system capacity from Cushing to Hewitt, Oklahoma is owned by a third party in an undivided joint interest structure.

Read the article online at: https://www.worldpipelines.com/business-news/03062019/expansion-and-jv-of-red-river-pipeline/

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