Genesis Energy LP, announced Feb. 4 that the company plans to invest approximately $125 million to improve existing assets and develop new infrastructure in Louisiana to connect into Exxon Mobil Corporation’s Baton Rouge refinery, one of the largest refinery complexes in North America, with more than 500,000 barrels per day of refining capacity. The project is expected to generate positive economic benefits both for the community of Baton Rouge and the state of Louisiana.
“With the expansion of our operations in Louisiana, Genesis looks forward to a strong future in the state and to increasing our contribution to the local economy,” said Genesis CEO Grant Sims. “This project positions Genesis as an efficient conduit for crude oil supply and logistics in the region.”
Genesis will improve its existing terminal at Port Hudson, Louisiana, and build a new 18-mile, 20-inch-diameter crude oil pipeline connecting Port Hudson to the Maryland Terminal in Baton Rouge and continuing downstream to the ExxonMobil Anchorage Tank Farm in Port Allen, Louisiana. The company also plans to build a new crude oil unit train facility at the Maryland Terminal.
At Port Hudson, Genesis will construct approximately 200,000 barrels of storage capacity to complement its 216,000 barrels of existing tank capacity and make improvements to its existing barge dock and truck station. The new 18-mile pipeline will have an ultimate capacity of about 350,000 barrels per day, and, in addition to its connection to the ExxonMobil Baton Rouge refinery, the pipeline will have potential access to other local refineries representing approximately 140,000 barrels per day.
Project construction is scheduled to begin in early 2013. The Port Hudson upgrades and new crude oil pipeline are expected to be completed by the end of 2013, and the Maryland Terminal completion is scheduled for the second quarter of 2014.
Genesis intends to finance the transaction with funds available under its revolving credit facility. The company has entered into definitive agreements with ExxonMobil, in which ExxonMobil will grant Genesis a land lease at the Maryland Terminal site and secure preferential rights for throughput at the facilities.