Koch Pipeline Company Continues Plans to Expand Texas Crude Oil Pipeline Capabilities

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Nov. 15, 2010

Koch Pipeline Company, L.P. is seeking corporate approval to further expand its South Texas Crude oil system. Approval is expected by year end.

The proposed new 16-inch pipeline to connect Eagle Ford producers in the Karnes County area to Corpus Christi, Texas, will have an initial capacity of 120,000 barrels per day with future expansion capability of more than 200,000 barrels per day.

“This is a cornerstone project that complements our recent efforts to better serve Eagle Ford producers,” said Kim Penner, president of Koch Pipeline. “We have already completed or are in the process of constructing several projects that will add more than 140,000 barrels of capacity by the end of 2011 – all aimed at moving more Texas crude to Corpus Christi.”
The company today is the largest transporter of South Texas crude oil.

“Koch Pipeline’s expansion not only fits well with Flint Hills Resources’ strategy to run more domestic crude at our Corpus Christi refinery but also our plans to market crude from our Ingleside waterborne terminal,” said Brad Urban, senior vice president of supply. “What’s more, we are evaluating projects to enhance our refinery processing capability to handle even more volumes of Eagle Ford crude in the future.”

The project, in the heart of the northern Eagle Ford trend, should be complete in the fourth quarter of 2012.

The expansion will include pump and truck receipt stations and tanks. A new station likely near Helena will connect into Koch Pipeline’s existing crude system in Pettus and Refugio.

“We are pleased with our steady progress to provide timely logistic solutions to the Corpus Christi energy center,” Penner said. “We expect to receive final approval to move forward with this pipeline expansion by the end of the year. Our privately held status is an advantage when it comes to moving quickly to respond to market needs. Our next phase is to evaluate a large-diameter trunk line to connect our Pettus infrastructure and continue into the western counties of Live Oak, McMullen, LaSalle and Dimmit.”

Koch Pipeline currently is building a line to expand delivery capability to Flint Hills Resources’ Ingleside waterborne terminal. In addition, Koch Pipeline leased 30,000 barrels of capacity from NuStar Logistics on a line from Pettus to Corpus Christi. In August, in conjunction with Arrowhead Pipeline, L.P., Koch Pipeline announced an agreement and joint tariff to add 50,000 barrels per day of crude and condensate capacity during 2011 from the western counties of the Eagle Ford trend.

Koch Pipeline operates about 540 miles of active crude oil transportation lines in Texas. The company also has ongoing relations with other crude distribution systems that further its ability to provide services in this growing production area.

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