San Antonio-based firms NuStar Energy, L.P. (NS) and TexStar Midstream Services, L.P. have teamed up to build a new pipeline system that would carry crude oil and condensate from Eagle Ford shale in South Texas to NuStar’s Corpus Christi, Texas terminal.

The agreement between the companies – the most recent in the wave of pipeline expansions to make the crude available to large refineries spread along the U.S. Gulf Coast – will provide South Texas producers with unhindered access, dependable and low cost passage for their oil to be sold to refiners.

The proposed initiative will see privately held TexStar construct and operate a new 65-mile, 12-inch pipeline with the capacity to move up to 120,000 barrels per day of crude oil and condensate from Frio County (in the heart of the Eagle ford shale) to Three Rivers, Texas, where NuStar will build a new storage facility.

This storage facility would, in turn, be connected to NuStar’s existing 16-inch pipeline that can transport 200,000 barrels per day from Three Rivers to the partnership’s Corpus Christi North Beach Terminal.

Currently, the North Beach Terminal can store about 2 million barrels of oil but has been approved a lease option agreement for 15 acres of land adjacent to the existing property, which will allow TexStar to expand the terminal capacity. The projects are expected to begin service by the second quarter of 2012.

NuStar Energy –  which competes in the ‘Oil and Gas Pipelines’ industry with firms like Atlas Pipeline Partners L.P. (APL) – currently retains a Zacks #4 Rank, which translates into a short-term Sell rating. It is the fourth largest independent liquids terminal operator in the world and second largest in the U.S., apart from being the number one asphalt producer on the East Coast and number three asphalt producer in the U.S.

TexStar Midstream Services, a unit of EIG Global Energy Partners and HM Capital Partners L.P., is a midstream entity focused on providing a complete array of services to producers in South Texas.

 
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