July 29, 2011 [OPIS] - Nustar Energy L.P. said on Friday that it has signed two crude throughput agreements with Valero for a "big project" involving Valero utilizing a few of Nustar's existing pipelines and a new pipeline to deliver cheap Eagle Ford crude to South Texas.
This agreement is expected to help lower Valero’s crude costs on the Gulf Coast.
“The project is pretty big for us,” said Curt Anastasio, Chief Executive Officer and President of NuStar Energy L.P. and NuStar GP Holdings, LLC.
The contract will be effective in the fourth quarter of 2011. Nustar declined to provide more information on this project on Friday as a joint-announcement with Valero would be made sometime next week.
The agreement with Valero will be in addition to a previously announced project with Velocity Midstream Partners. NuStar Logistics, L.P. and Velocity Midstream Partners said in June that they signed a letter of intent to develop a joint pipeline solution to transport west Eagle Ford Shale condensate from Velocity’s Gardendale Hub to NuStar’s North Beach Corpus Christi, Texas terminal facility.
Velocity will build and operate a new 70-mile, 12-inch pipeline with the capacity to move over 100,000 b/d of condensate from Gardendale to Oakville, Texas. Velocity’s 12-inch pipeline will interconnect with NuStar’s new Oakville Storage Facility near Three Rivers, Texas.
This storage facility will be connected to NuStar’s existing 16-inch pipeline, which has the capacity to transport approximately 200,000 b/d of crude and condensate into NuStar’s Corpus Christi North Beach Terminal.
The North Beach terminal has approximately 2 million barrels of storage capacity, large-scale marine loading facilities, and access to several Corpus Christi refinery markets. NuStar also has a land lease option for 15 acres contiguous to the existing property, which will provide terminal expansion capabilities.
