The proposed constructing of a dedicated ethanol pipeline system that would safely and efficiently deliver ethanol from the Midwest to distribution terminals in the northeastern U.S has another supporter.

Poet has signed a joint development agreement with Magellan Midstream Partners to continue assessing the pipeline project. Poet is the largest producer of ethanol in the world, with more than 1.5 billion gallons of annual ethanol production from 26 plants in seven Midwestern states. When combined with 300 million gallons that Poet markets for nine plants outside its network, the company is one of the largest ethanol marketers, with 1.8 billion gallons of annual production.

"We are pleased Poet has joined the team to explore the feasibility of constructing a renewable fuel pipeline system," says Don Wellendorf, president and CEO of Magellan, a publicly traded partnership formed to own, operate and acquire a diversified portfolio of energy assets. "Poet adds valuable experience as a leader in ethanol production, marketing and logistics to this project."

"This agreement with Magellan,” says Poet CEO Jeff Broin, “is an important step in improving long-term transportation economics for our facilities and consumers. A project of this nature would provide benefits throughout the ethanol industry, agricultural community and the economy in general. It would also represent another major step forward in the efficiency of producing and delivering ethanol to the marketplace."

The proposed common carrier pipeline system would gather ethanol from plants in Iowa, South Dakota, Minnesota, Illinois, Indiana and Ohio to serve terminals in major Northeastern markets. The project, preliminarily estimated to cost in excess of $3.5 billion, would span about 1,700 miles and take several years to complete.

The feasibility of the project depends on the successful outcome of ongoing studies addressing technical and economic issues associated with the transportation of ethanol via pipeline. In addition, federal legislation revising the U.S. Department of Energy’s loan guarantee program is critical for a project of this nature to move forward, according to the two companies.

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