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Oil & Gas

Poet, Magellan may build $3.5 billion ethanol pipeline

March 17, 2009
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Biofuels company Poet LLC and Magellan Midstream Partners LP on have announced a joint venture to study whether they can build a dedicated ethanol pipeline with an estimated cost of more than $3.5 billion. The 1,700-mile pipeline would deliver ethanol from plants in Iowa, South Dakota, Minnesota, Illinois, Indiana and Ohio to distribution terminals in the northeastern United States. Poet, based in Sioux Falls, S.D., is the nation''s largest ethanol producer with more than 1.5 billion gallons of annual production from 26 ethanol plants. Tulsa, Okla.-based Magellan Midstream Partners LP transports, stores and distributes refined petroleum products. The companies said the project is dependent upon the success of studies addressing technical and economic issues related to transporting ethanol through a pipeline. Federal legislation revising the U.S. Department of Energy''s loan guarantee program is also critical for the project to move forward, they said. A positive assessment would allow one or both partners to enter into an agreement to construct an ethanol pipeline, but any project would take several years to complete.
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