River Cities Business Journal: Construction

Today's News-Herald

LAKE HAVASU CITY- Cheaper gas in Mohave County could be a reality if a Tempe firm gets its wish.

Mike Owens, president of Pacific & Texas Pipeline and Transportation Co., said his firm is proposing creation of the Havasu Pipeline to run refined fuel between Phoenix and Las Vegas.

If Mohave County wanted, the firm could establish a small, local tank farm to serve local residential and business needs.

“We're working with the BLM (Bureau of Land Management) right now. We want to place about 95 percent of the pipeline on federal and state land,” said Owens.

“We want to disturb the least amount of people possible.”

Mohave County Supervisor Buster Johnson said pipelines have been part of his efforts to spur economic development in the county for years. He called the proposed Havasu Pipeline “a step in the right direction.”

“I've been working to place a refinery here from pipelines coming out of Yuma County and we're looking for a new propane gas line coming in through Kingman,” said Johnson. “The Pacific & Texas line would be a plus. It's no refinery but it's a step in the right direction.”

The Pacific & Texas proposal is made up of two phases, both of which would be under construction at the same time.

The first will run from El Paso, Texas, to Phoenix and be able to carry more than 220,000 barrels - or 9.4 million gallons - of refined fuel per day.

The second pipeline, the Havasu Pipeline, would run north into La Paz and Mohave counties before turning west just south of Bullhead City, before crossing the Colorado River, enter Nevada and travel north to end the 425-mile trip in Las Vegas.

The Havasu Pipeline would move about 108,000 barrels - or more than six million gallons - of fuel daily to Las Vegas.

“That should be sufficient to cover needs,” said Owens. “And there would be extra capacity to satisfy additional needs. Like if Mohave County requests, say 20,000 barrels, that could be done.”

That fuel could be stored in a small tank farm that could provide cheaper fuel to Lake Havasu City, Bullhead City and Kingman. Owens said the company is “looking to talk with (Mohave) County to purchase land for the farm.”

The company has plans to develop enough tanks to store up to 42 million gallons of fuel as part of the project.

Pacific & Texas is proposing to move fuel in batches, sending through one type of fuel, then closing and cleaning the pipeline before a batch of another type of fuel is transported.

Cost of the project is estimated at about $840 million and, pending approvals, should be completed by summer of 2009.

“The governor is behind this project 100 percent. And the Legislature passed legislation to support construction,” said Owens.

Currently, two pipelines bring fuel in to Arizona, one from Texas that ruptured in 2003, reducing supply and causing some Phoenix-area filling stations to run dry.

Nevada receives much of its gasoline from California refineries that use Alaskan oil.

However, the leaks discovered in the BP pipelines in Prudhoe Bay, Alaska, has forced the West Coast refineries to begin working with “sour crude” which produces lesser amounts of refined gasoline.

The Energy Information Administration estimates that gasoline from Gulf refineries in Texas and Louisiana is 7-10 cents cheaper per gallon than gas produced by California refineries.