- Associated Press - Wednesday, May 7, 2014

FORT SMITH, Ark. (AP) - An energy company is planning a $150 million fuel pipeline that’s to run from Fort Smith to Little Rock, which officials say will mean fewer tanker trucks on Interstate 40.

Magellan Midstream Partners of Tulsa, Oklahoma, has an agreement with Ozark Gas Transmission, a subsidiary of Spectra Energy Partners, to use 160 miles of an existing 12-inch pipeline that runs from near Fort Smith to central Arkansas.

The company, which announced the project Tuesday, will have to build a 14-mile spur between the line and its Fort Smith distribution facility, as well as a 38-mile connection south from the line to Little Rock.

The line will transport up to 75,000 barrels per day of gasoline, diesel or jet fuel and is expected to be complete in early 2016, pending regulatory approvals.

“We believe the entire market demand in central Arkansas is approximately 90,000 barrels per day,” Magellan Midstream Partners spokesman Bruce Heine said.

The company said it will supply refined petroleum products to the Little Rock market from a variety of sources, including fuel supplied through other pipelines from mid-continent and Gulf Coast refineries.

Jet fuel is now delivered to Little Rock-area airports by tank trucks and a pipeline from El Dorado supplies diesel fuel.

Magellan has two petroleum distribution terminals - one in North Little Rock and one at the Union Pacific Railroad Depot. The firm is looking into extending a pipeline to Little Rock Air Force Base at Jacksonville.

Randy Zook, president and chief executive officer of the Arkansas State Chamber of Commerce, said the pipeline will benefit the state.

“It’s absolutely good for central and most of Arkansas,” Zook said. “Pipeline is the most economical and safest way to transport those liquids.”

Magellan Midstream Partners CEO Michael Mears said during an earnings conference call Tuesday that the project will give Little Rock more supply options.

“Through this extension, shippers will for the first time have access to supplies from refineries in the mid-continent,” Mears said.

Fuels refined in Kansas and Oklahoma will move through the line.

“Connections to these additional refineries will ultimately translate to benefits for local motorists. Once the pipeline system is operational in early 2106, we expect fewer trucks to travel on I-40 from Fort Smith and Memphis, which currently deliver fuel into the Little Rock area,” Heine said.

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