Magellan Midstream Partners has unveiled plans to expand the capacity of its crude oil pipeline from Crane, Texas to its East Houston, Texas terminal in the US to 225,000 barrels per day.
The project is expected to cost $375m and will also involve work to reverse the flow of the pipeline.
The exanded pipeline capacity has received long-term shipper commitments to transport crude oil in a recent binding open season.
Magellan Midstream Partners chief executive officer Michael Mears said the market confirmed the attractive fundamentals of our Crane-to-Houston crude oil pipeline.
"We continue to believe our Crane-to-Houston pipeline will be the most direct and cost-efficient route to deliver growing West Texas crude oil production to the refineries in the Houston and Texas City area, providing an alternative transportation option that will help alleviate the current crude oil oversupply situation in Cushing, Oklahoma," added Mears.
The expanded pipeline will offer a direct route to deliver crude production in west Texas to refineries in Houston along the Gulf Coast through Magellan's distribution system.
The company expects the reversed pipeline to begin transporting crude oil at partial capacity by early next year, reaching its full capacity of 225,000bpd by mid-2013 after it recieves necessary permits and regulatory approvals.
Magellan said it is still assessing the construction of a new pipeline segment using existing third-party infrastructure to transport crude oil from Midland, Texas to Crane for delivery to the Houston area.