Parkway Pipeline, a 50-50 joint venture between Kinder Morgan Energy Partners, L.P. and Valero Energy Corp (VLO - Analyst Report) , is complete and has started transferring refined petroleum products.
Parkway Pipeline is about 141 miles long and has a 16 inch diameter. The system cost about $250 million and has a capacity of 110,000 barrels per day (bpd), which can be expanded to over 200,000 bpd.
The pipeline is carrying petroleum from refineries in Norco, Louisiana, to an existing petroleum transportation hub in Collins, Miss., owned by Plantation Pipe Line Company.
Kinder Morgan is the operator of Plantation Pipe Line Company with a stake of 51%. From this hub, the products will be transported by multiple pipeline systems that serve major markets in the eastern United States.
The products will be transported to key markets in the eastern United States, including Plantation, from this hub through multiple pipeline systems.
Parkway Pipeline project also aids local businesses, housing and support services by employing about 1,200 at its peak. The project is likely to provide greater connectivity between Gulf Coast refineries and East Coast markets as well as boost local property tax revenues by nearly $6 million.
Kinder Morgan is the largest independent owner and operator of petroleum product pipelines in the U.S. Its pipelines transport natural gas, refined petroleum products, crude oil, carbon dioxide and other products, while its terminals store petroleum products and chemicals and handle bulk materials such as coal and petroleum coke. It owns or operates more than 54,000 miles of pipeline and approximately 180 terminals.
Kinder Morgan carries a Zacks Rank #3 (Hold). However, other Zacks Ranked #1 (Strong Buy) stocks – Range Resources Corp. (RRC - Analyst Report) and Dril-Quip, Inc. (DRQ - Analyst Report) – appear more attractive for the short term.