looksforward to completing a pipeline project that it said will meet refiners' needto move volumes east from the Midwest.
ClarkSmith, chairman, president and CEO of Buckeye GP LLC, listed the Michigan-Ohiopipeline expansion as one of Buckeye's important initiatives in a May 6earnings call. Construction has started, and Buckeye GP Senior Vice PresidentRobert Malecky, president of domestic pipelines and terminals, said the companyis "highly confident that we will have the solution online by the fourthquarter of this year, although most of the financial contribution will come in2017."
Smithsaid the $100 million project is a big part of the capital budget. It willexpand Buckeye's capacity for transportation of refined petroleum products fromMidwest refining sources to locations on its system in eastern Ohio and westernPennsylvania. An open seasonnotice placed the project's origin points in Detroit and Woodhavenin Michigan and in Toledo and Lima in Ohio. The project, supported by long-termshipper commitments from major oil companies, meets refiners' need forwest-to-east movement of refined products, Smith said.
Maleckysaid the west-to-east flow of the project should help offset a reduction intransportation volumes Buckeye saw in the first quarter.
"Weare exploring additional opportunities to augment this project to furtherincrease our capacity to move the products west to east," Malecky said. "Shipperfeedback tells us the market is continuing to look for alternatives to move theproduct eastward, and we believe our assets are uniquely positioned to providethe best option for timely capacity additions."
OtherBuckeye highlights included its global marine terminals segment, storagesegment and fully contracted gathering facilities in the Eagle Ford, which "arewell positioned in key locations that allow our customers move crude oil toCorpus Christi even with the declining production from the shale play,"Smith said.
Smithsaid Buckeye is pleased with first-quarter results, which he said were strongdespite continued volatility in commodities markets and the effects of a warmwinter. On May 6, Buckeye Partners first-quarter income fromcontinuing operations of $135.0 million, compared to $112.0 million in theyear-ago quarter.