CHS will boost crude oil access with Express Pipeline connection

abarrelfullabarrelfull wrote on 14 Feb 2013 07:37
Tags: chs n-america refinery usa

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CHS Inc. (NASDAQ: CHSCP), an energy, grains and foods company and the nation's leading farmer-owned cooperative, announced today it will build a seven-mile connection in central Montana to link its Front Range Crude Oil pipeline with the Kinder Morgan Express Pipeline.

Kinder Morgan-Canada and Front Range Pipeline, LLC, a wholly owned CHS subsidiary, will construct storage, pipeline, and other associated equipment needed to connect the Express Pipeline to the Front Range Pipeline near Buffalo, Mont. Front Range Pipeline will invest about $15 million in the connecting pipeline and associated equipment. Once completed, this connection will allow access to an additional source and wider variety of Canadian crude oils for the CHS Laurel Refinery.

"This investment helps ensure that CHS can continually source crude oil for our Laurel Refinery, further strengthening our ability to produce reliable supplies of quality refined fuels products to meet the needs of our cooperatives, producers and other customers," said Jay Debertin, executive vice president and chief operating officer, Energy and Foods. "The link creates important refining flexibility for Laurel by providing access to additional varieties of Canadian crude oil."

Pending permitting and other approvals, the project is expected to begin this summer with completion estimated for fall 2014. Debertin added that in constructing and operating the new pipeline connection, CHS is committed to making safety and environmental protection its priorities as it does with all of its pipeline operations.

The Express Pipeline, originating at Hardisty, Alberta, Canada, is one of North America's major crude oil lines moving up to 280,000 barrels per day from Canada to U.S. markets in Montana, Wyoming, Utah and Colorado.

Kinder Morgan Energy Partners, L.P. (NYSE: KMP), along with its partners (Ontario Teachers' Pension Plan Board and Borealis Infrastructure) entered into a definitive agreement to sell 100% of the Express Pipeline System to Spectra Energy Corp. The transaction is subject to customary consents and regulatory approvals and is expected to close in the first half of 2013.

The 55,000 barrels per day Laurel Refinery currently receives Canadian and Montana crude oil through the company's Front Range pipeline which extends from the Canadian border to the refinery. The planned pipeline connection will take place about 150 miles northwest of Laurel.

The connection to the Express Pipeline will not increase Laurel refining capacity.

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