Poet & Magellan Midstream Assess Dedicated Ethanol Pipeline

Magellan Midstream Partners L.P. announced that it has signed a joint development agreement with Poet to continue assessing the feasibility of constructing a dedicated ethanol pipeline. The proposed ethanol pipeline system would deliver the fuel from biorefineries in the Midwest to distribution terminals in the northeastern United States.

The proposed common carrier pipeline system would gather ethanol from facilities in Iowa, South Dakota, Minnesota, Illinois, Indiana and Ohio to serve terminals in major Northeastern markets. The project would span approximately 1,700 miles, cost in excess of US $3.5 billion and take several years to complete.

“We are pleased Poet has joined the team to explore the feasibility of constructing a renewable fuel pipeline system,” said Don Wellendorf, Magellan’s president and chief executive officer. “Poet adds valuable experience as a leader in ethanol production, marketing and logistics to this project.”

The two companies said that the feasibility of the project is dependent on the outcome of studies addressing technical and economic issues associated with the transportation of ethanol via pipeline. In addition, federal legislation revising the U.S. Department of Energy’s loan guarantee program is critical for a project of this nature to move forward.

Poet is the largest producer of ethanol in the world with more than 1.5 billion gallons of annual ethanol production from 26 ethanol production facilities in seven Midwestern states. When combined with 300 million gallons of ethanol that Poet markets for nine plants outside its network, Poet is one of the largest ethanol marketers with 1.8 billion gallons of annual production.

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