Magellan had previously announced the project to reverse and convert to crude oil service its pipeline from Crane, Texas to its East Houston terminal, initial capacity at 135,000 b/d and a cost of $245 million. The project is now estimated to cost $375 million, including the cost to expand the system to its maximum capacity of 225,000 bpd, Magellan said.

“The market clearly confirmed the attractive fundamentals of our Crane-to-Houston crude oil pipeline, and we are pleased to increase the scope of our project in response to this strong industry demand,” said Michael Mears, chief executive officer. “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.”

Subject to receiving the necessary permits and regulatory approvals, Magellan said it expects the reversed pipeline to begin transporting crude oil at partial capacity by early 2013, ramping to its full 225,000-bpd capacity by mid-2013.

Magellan is also studying the construction of a new pipeline segment or the use of existing third-party infrastructure to transport crude oil from Midland, Texas to Crane for delivery to the Houston area. Magellan said it estimates the new pipeline segment would cost an additional $70 million.