Plains All American LP is taking a “capital-efficient” approach in its expansion of an Oklahoma crude oil pipeline system by forming a new joint venture (JV) with Delek US Holdings Inc.

The Houston-based midstream company said May 28 the Delek JV underpins the previously disclosed expansion of its existing Red River Pipeline system in Oklahoma. The expansion project is expected to add roughly 85,000 barrels per day (bbl/d) of crude takeaway from Cushing, Okla., and the Permian Basin to U.S. Gulf Coast markets.

As part of the JV, Delek Logistics Partners LP, Delek’s MLP, purchased a 33% ownership interest in a new Red River Pipeline Co. LLC JV from a Plains’ subsidiary for $128 million. The sale doesn’t include Valero Energy Corp.’s partial ownership of the northern segment of the system.

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