TEPPCO Partners LP, Houston TX, is initiating an expansion of its refined products origin capabilities in the Houston and Texas City TX areas.
As part of the project, TEPPCO has acquired from Texas Genco LLC all of its interests in certain companies, which own a 90-mile pipeline system and 5.8 million barrels of storage capacity.
The transaction is valued at approximately $62 million.
Assets of the purchased companies will be integrated into TEPPCO's downstream segment origin infrastructure in Texas City and Baytown TX. The integration and other system enhancements should be in service by fourth quarter 2006, at a cost of $45 million.
TEPPCO's existing Texas City origin facility and a 10-inch diameter, 70,000 barrel per day pipeline system from Texas City to Baytown will be replaced by an 18-inch diameter, 180,000 barrel per day pipeline.
The 18-inch diameter pipeline will provide additional receipt and delivery capabilities through the TEPPCO system at major exchange terminals in the Houston area.
Once the project is completed, the 10-inch diameter Texas City pipeline and an 8-inch diameter Houston Ship Channel pipeline will be available for alternative transportation service.
The expanded system will also enable further development of TEPPCO's North Houston delivery system.