TexStar Midstream has signed an agreement with Calumet Specialty Products Partners to construct, own, and operate a 30,000 b/d pipeline system that will deliver Eagle Ford crude to Calumet's San Antonio Refinery.
The deal includes a 15-year agreement for TexStar to build and operate the Karnes North Pipeline System (KNPS). The system will include 50-miles of 8-inch pipe from Karnes to the southeast side of San Antonio.
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Calumet expects its refinery in Elmendor, TX, will receive deliveries of at least 10,000 b/d, with the potential for more. The company's San Antonio Refinery has capacity to process 14,500 b/d. Capacity is expected to grow to 17,500 b/d soon. The company spent $9 million to increase production of jet fuel, diesel, and gasoline.
“We expect this agreement will help to further improve the long-term profitability of our San Antonio refinery,” stated Jennifer Straumins, COO of Calumet. “By year-end 2014, the refinery will begin receiving significant volumes of Eagle Ford crude oil via the TexStar line, thereby enabling us to realize significant transportation cost savings on our delivered feedstock.”
The Calumet refinery produces ultra-low sulfur diesel, jet fuel, and specialty solvents.
Currently, crude oil is delivered by truck and Calumet expects the pipeline to significantly reduce the cost of delivered oil.
Read the full press release at calumetspecialty.com