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US' Laurel Pipeline expected to flow both east and west by mid-2019: Buckeye CEO

New York — Buckeye Partners expects to be able to use the Laurel Pipeline bi-directionally for transporting refined products by the middle of this year, as it waits for federal regulators to rule on a tariff petition, said CEO Clark Smith Friday.

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Providing bi-directional service on the Laurel Pipeline will allow Midwest refiners to move more gasoline and diesel from Michigan and Ohio east into Pennsylvania. Presently, the line runs from Philadelphia refineries west to the Pittsburgh area.

"We are currently projecting that we'll be able to commence pipeline movements on this project by mid-2019," he said during Buckeye's fourth-quarter 2018 results call.

"We continue to wait for [the US Federal Energy Regulatory Commission] to rule on our PDO or Petition for Declaratory Order related to the proposed tariff for interstate deliveries through the planned bi-directional operation of our Laurel pipeline," he added.

No timeline was given for when FERC would hand down the ruling necessary for the pipeline to operate across state lines, but Clark said, once received, Buckeye would start hydro-testing the pipeline to check its integrity and expects to "commence pipeline movements within 60 to 90 days of receiving FERC approval," Smith said.

The second phase of the Michigan-Ohio pipeline project will bring refined products from refineries in Detroit and Ohio southeast to the Altoona area of central Pennsylvania.

No capacities were given for either project, but Buckeye said previously it expected initial west-to-east rates to be 40,000 b/d.

However, seasonal factors could impact Buckeye's timeline for bi-directional movements on Laurel.

Bob Malecky, Buckeye's head of domestic pipelines and terminals, said the company had a "somewhat short window" of about 90 days by which to receive the FERC ruling and conduct the hydrotest. After that, there will be a delay of four to five months to reverse the pipeline. He did not elaborate on specific reasons.

"But we are absolutely sure it will flow," he said.

-- Janet McGurty, janet.mcgurty@spglobal.com

-- Edited by Keiron Greenhalgh, newsdesk@spglobal.com