Plains All American Pipeline LP and Phillips 66 Partners LP formed STACK Pipeline LLC (JV), a 50:50 limited liability company, to own and operate a common carrier pipeline that transports crude oil within Oklahoma.
Oil will be transported from the Stack play in northwestern Oklahoma to Cushing, Okla.
Under the joint venture (JV) agreement, Plains contributed an existing terminal in Cashion, Okla., with about 200,000 barrels (Mbbl) of crude oil storage. Plains also contributed the 55-mile STACK Pipeline with current capacity of about 100 Mbbl/d.
Phillips 66 Partners contributed $50 million cash, which will be distributed to Plains, in exchange for a 50% interest in the JV.
The JV plans to invest an estimated $15 million to expand the STACK Pipeline by constructing a truck station at Highway 33, about 12 miles northwest of the Cashion Terminal; and a lateral pipeline to connect the Highway 33 station to the Cashion Terminal; and 100 Mbbl of storage at the Cashion Terminal.
Additional expansion opportunities, including expanding the capacity of the Stack Pipeline by looping it from the Cashion Terminal to Cushingare also being pursued.
The STACK Pipeline and the initial expansion are supported by multiple long-term contracts, and by legacy production gathered by existing Plains crude oil pipelines that originate in western Oklahoma.
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