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POET and Magellan Midstream Partners to assess ethanol pipeline

Magellan Midstream Partners has signed a joint development agreement with POET to continue assessing the feasibility of constructing a dedicated ethanol pipeline.

The proposed common carrier pipeline system would gather ethanol from production facilities in Iowa, South Dakota, Minnesota, Illinois, Indiana and Ohio to serve terminals in major Northeastern markets. The project, preliminarily estimated to cost in excess of US$3.5 billion, would span approximately 1700 miles and would take several years to complete.

The feasibility of this project is dependent upon the successful outcome of ongoing studies addressing technical and economic issues associated with the transportation of ethanol via pipeline. In addition, federal legislation revising the US Department of Energy’s loan guarantee programme is critical for a project of this nature to move forward.

Magellan and Buckeye Partners originally announced their intent to jointly study the feasibility of a large-scale renewable pipeline project in February 2008, but Buckeye has recently decided to focus on other priorities and have discontinued its role in the ethanol pipeline project.

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