Oklahoma-based midstream company Blueknight Energy Partners started construction Thursday on a 160-mile crude pipeline in East Texas.
The project is expected to be finished by March 2016 and will cost about $300 million.
The pipeline, named the Knight Warrior Pipeline, will have a 16-inch diameter and an initial capacity of 100,000 bpd that is expandable up to 200,000 bpd.
The pipeline will run from Madison County, Texas south through Leon, Walker and Houston counties.
The Knight Warrior will serve Eaglebine and Woodbine crude oil producers through two origination stations located near North Zulch and Madisonville in Madison County.
Blueknight will also build a third origination station near Roans Prairie to accommodate future production growth in the area.
The crude will be transported to Oiltanking Houston, a product terminal on the Houston Ship Channel owned and operated by Houston-based Oiltanking Partners.
The project is backed by long-term shipper commitments, including a transportation agreement with a joint venture between Switzerland-based energy and commodity trading company Vitol and Tennessee-based marketing company SEI Energy.
“The Eaglebine/Woodbine region is emerging as one of the most prolific crude oil plays in the country and the area needs new infrastructure to realize its full potential,” Blueknight’s CEO Mark Hurley said.
Blueknight currently owns approximately 920 miles of pipeline in Texas and Oklahoma.