Magellan Midstream Partners is collaborating with US ethanol producer Poet to progress a feasibility assessment of constructing a dedicated ethanol pipeline from the Midwest to distribution terminals in the north-eastern US.
Since February 2008, Magellan has been exploring the feasibility of constructing a 1,700-mile dedicated renewable fuels pipeline from northwest Iowa to New York harbour. It would gather ethanol from production facilities in Iowa, South Dakota, Minnesota, Illinois, Indiana and Ohio.
The preliminary project cost estimates are in excess of $3.5 billion (2.56 billion). ]
Feasibility is dependent on the outcome of ongoing studies addressing technical and economic issues associated with the transportation of ethanol via pipeline, which includes challenges resulting from the corrosive nature of ethanol and how ethanol reacts with other products and substances within the pipeline.
A positive assessment of the project will allow one or both project partners to enter into a subsequent agreement to construct a dedicated ethanol pipeline. According to Magellan, federal legislation revising the US DOE loan guarantee programme is critical for a project of this nature to move forward.
Poet operates 26 ethanol production facilities in the US, including a 20,000 gallon a year cellulosic ethanol plant that is co-located with a 9 mgy starch ethanol plant. The facility, which commenced operations in late November, uses corn cobs as a feedstock.