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Vol. 11, No. 2 Week of January 08, 2006
Providing coverage of Alaska and northern Canada's oil and gas industry

New U.S. outlets for Canadian heavy crude

Aside from the welter of major new crude pipeline projects out of Alberta, smaller gains are under way in the United States, with new pipeline and refinery projects being announced Jan. 3.

Minnesota Pipe Line, operated by Koch, has launched plans to absorb more Canadian crude at the Minneapolis and St. Paul refineries, while a Kansas refinery is boosting capacity to process Canadian heavy crudes.

Minnesota Pipe Line said it is seeking regulatory approval to spend $300 million building 300 miles of new 24-inch diameter line from Clearbrook, Minn., where it takes crude off the Enbridge network, to the St. Paul area.

The initial expansion, due for completion by early 2008, will add 160,000 barrels per day of capacity to the Minnesota system, which is currently running at its 300,000 bpd capacity.

But the expansion project is being designed to eventually handle 350,000 bpd.

Minnesota project manager Larry Van Horn said the undertaking will “provide another outlet for Canadian producers to get their barrels to growing markets,” while providing an option to transport condensate to Canada’s heavy crude producers at some later date.

The refineries are Flint Hill’s 280,000 bpd Pipe Bend facility and Marathon Oil’s 70,000 bpd plant at St. Paul.

Meanwhile, Coffeyville Resources is spending $92 million to raise capacity at its Kansas refinery by 15 percent to 115,000 bpd by year’s end.

The additions will result in more heavy crudes run through the plant, which is due to process its first barrel of Canadian crude in March.

Until now the refinery has processed light sweet grades gathered from Kansas and Oklahoma and some crudes from Latin America.

—Gary Park



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