Midstream operator NuStar Energy and retailer cooperative CHS have partnered to build a propane pipeline and expanded terminal network by the fourth quarter in the upper midcontinent.
The partners will develop an 8-mile pipeline originating at NuStar's origin facility in Conway, Kansas, not far from the southern end of NuStar's east refined products pipeline system. The connecting line and enhancements at the origin facility will allow for larger propane shipments on the existing system.
NuStar also plans to grow its Rock Rapids, Iowa, terminal with added propane services. The terminal is now underutilized and will allow CHS to supply the region with propane. Investments made by NuStar to enhance its midcontinent propane infrastructure will be backed by long-term throughput and storage deals with CHS.
The new supply stream will start up by the end of the fourth quarter of 2015 as the strongest midcontinent weather demand for the heating fuel kicks in.
Last year CHS vastly expanded its upper midcontinent rail hub network as a key propane supply pipeline was reversed to move diluent to western Canada.
The cooperative invested $24mn to develop its rail supply network in the Northern Tier region that was impacted by the Cochin pipeline reversal. CHS built new terminals in Hixton, Wisconsin; Rockville and Glenwood, Minnesota; Carrington, Hannaford, and Fairmont, North Dakota.
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