Yet another Minnesota crude oil pipeline is set for a major upgrade.
Minnesota Pipe Line Co., which owns four pipelines that supply the state’s two oil refineries, said Thursday that it will invest $125 million to maximize the capacity of the largest of the lines. The company said the goal is to increase the system’s reliability, not to increase overall oil shipments.
“We’re so close to capacity, we can’t hiccup,” Bob O’Hair, the company’s president, said in an interview.
It is the latest of a series of pipeline projects valued at more than $4 billion in the state. Enbridge Energy, a pipeline company that ships oil from Canada and North Dakota, is upgrading the capacity of its Alberta Clipper pipeline through northern Minnesota and plans to build a new Sandpiper pipeline across the state.
Minnesota Pipe Line Co.’s project, which requires state regulatory approval, won’t require digging new trenches or burying more pipe. Instead, the company said it will more than double the capacity of Line 4 to 350,000 barrels per day by adding six pump stations along the 295-mile route. The line connects an oil terminal at Clearbrook, Minn., with refineries in Rosemount and St. Paul Park.
O’Hair said the company’s existing pipeline system has enough capacity to supply the Flint Hills Refinery and Northern Tier Energy Refinery even after their latest upgrades. But he said testing of the older pipelines, maintenance work and other disruptions can sometimes reduce the system’s capacity. By expanding Line 4, O’Hair said the company will retain its ability to consistently supply the refineries.
The 24-inch-diameter Line 4 was formerly called the MinnCan pipeline, and was completed in 2008. Like many pipelines, it was sized so its capacity could be increased by adding pumping stations.
Another reason for the upgrade is the shutdown last year of the Wood River pipeline, which formerly supplied Twin Cities refineries from Illinois, O’Hair said. That line was less efficient because the crude took a longer path through other states. But O’Hair said it offered the refineries an additional 90,000 barrels per day of delivery capacity that they don’t have anymore.
Minnesota Pipe Line Co. is largely owned by the two Twin Cities refiners. Its system, which includes one line built in the 1950s, is operated by Koch Pipeline Co. based in Wichita, Kan. That company, like the 339,000-barrel-per-day Flint Hills Refinery in Rosemount, are units of Koch Industries.
Minnesota Pipe Line Co. said the new pump stations will be in rural areas in the counties of Hubbard, Wadena, Morrison, Meeker, McLeod and Scott. O’Hair said the exact locations haven’t been chosen. Two pumping stations at Clearbrook and near Albany, Minn., would be upgraded.
The state permitting process is expected to take 20 months, with another 20 months for construction, which will require about 40 to 50 workers, the company said. As a first step, the company will be sending notices to property owners about the project and the review process by the state Public Utilities Commission.
All four of the Minnesota Pipe Line Co. lines begin at its Clearbrook terminal, which is linked to Enbridge Energy’s vast pipeline system that transports oil across the Midwest and to other regions. The lines carry light and heavy crude oil. O’Hair said no new terminal storage will be required for the upgrade.