Chicago Complex To Be Expanded By Buckeye Partners, L.P. (NYSE:BPL) With The Backing Of BP plc (ADR)(NYSE:BP)

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Buckeye Partners, L.P. (NYSE:BPL) has disclosed that it intends to expand the storage capacity of its Chicago Complex by approximately 600,000 barrels by investing amounts totaling $80 million. BP plc (ADR)(NYSE:BP) Products North America has backed the project with a long-term agreement. Besides increasing the storage capacity the project will also expand throughput capacity and component blending capabilities. The existing truck rack will also be build out.

Currently the storage facility of the Chicago Complex is viewed as one that enjoys the highest level of flexibility in the city of Chicago as it is connected to multiple refineries and pipelines across the region. It also possesses rail capability for various products. According to the management of Buckeye the refining industry in the Midwest enjoys material cost advantages compared to rivals in other places. Close to 70 different customers are served by the Chicago Complex and it boasts of a storage capacity that can handle approximately 6.8 million barrels.

Enhancing liquidity

“This is a meaningful win for Buckeye … This project will further enhance the liquidity of the Chicago Complex and continues to solidify our position as the premier storage and trading facility in the Chicago area,” Buckeye Partners’ executive vice president and Terminals and Domestic Pipeline president, Robert A. Malecky, said.

The rising levels of production in the U.S. as well as fluctuating prices demand an increase in the storage capacity and the move by Buckeye Partners to expand their storage capacity will be of benefit to consumers. According to the Energy Information Administration the yearly production levels of crude oil in the U.S. rose to 9.3 million barrels a day last year. This was an improvement of 5% from the figures that were recorded in 2016.

Higher production levels

Per the Energy Information Administration report the levels of crude oil production in the world’s largest economy will keep on rising. In this year and the next the average number of barrels that will be produced is expected to vary between 10.7 million and 11.3 million barrels a day. This will require the existing storage capacity to be expanded. The rising production levels are also expected to increase the revenues that midstream operators generate.

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