June 18, 2013 / 3:24 PM / 4 years ago

UPDATE 1-Koch Pipeline seeks shipper interest in Bakken pipeline

3 Min Read

* Pipeline would carry 250,000 bpd initially

* May connect with larger project to move crude from Illinois to Louisiana

By Kristen Hays

HOUSTON, June 18 (Reuters) - Koch Pipeline Co LP may build a 250,000 barrel-per-day North Dakota-to-Illinois pipeline to move Bakken shale oil to markets, if enough shippers show interest, the company said on Tuesday.

On July 1, Koch will launch a non-binding, 45-day open season. If enough shippers show interest in the project during that time, the company will launch a binding open season to seek formal shipper commitments.

If approved, the Dakota Express pipeline would start up in 2016 with an initial capacity of 250,000 bpd, Koch said. The company did not disclose its estimated cost.

Last November, ONEOK Partners LP shelved plans to build a 200,000 bpd pipeline to carry Bakken crude to the U.S. crude futures hub in Cushing, Oklahoma, for lack of shipper interest.

However, Koch's proposal would bypass the glutted hub for a different route to U.S. Gulf Coast refineries.

Koch said the company also will explore connecting to the proposed Eastern Gulf Crude Access Pipeline in Patoka, Illinois, a $1.5 billion joint venture of Energy Transfer Partners and Enbridge Inc, which would carry Bakken and Canadian heavy crude south to Louisiana refineries.

The Eastern Gulf Crude project involves reversing a natural gas pipeline to move crude south to St. James, Louisiana, for refinery markets along the Mississippi River and the Louisiana Gulf Coast.

Energy Transfer Partners launched a binding open season on that project June 5 that lasts through July 19.

Koch's proposed Dakota Express pipeline would transport Bakken shale oil from western North Dakota to Hartford, Illinois, where Koch operates a terminal, and to the Patoka oil hub.

The project would involve some new construction as well as reversal of Koch's Wood River pipeline. That pipeline currently carries crude from Hartford to the Saint Paul, Minnesota, area, where Koch operates a 277,200 bpd refinery.

"This project presents an opportunity for Koch Pipeline to meet the growing transportation needs required to support increased crude oil production in the Williston Basin" within the Bakken shale, the company said.

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