ARCO TO START EXPANSION WORK ON ITS TEXAS-OKLA. OIL PIPELINE

ARCO TO START EXPANSION WORK ON ITS TEXAS-OKLA. OIL PIPELINE

Arco Pipe Line Co. said it plans to begin the first phase of a project expanding its crude oil pipeline that runs from Texas City, Texas, to Cushing, Okla.

The expansion will increase the line's capacity to 200,000 barrels a day. The nominal capacity is now 50,000 b/d.Arco Pipe Line is a subsidiary of Atlantic Richfield Co., Los Angeles.

The first phase of the project will cost about $48 million and will increase the capacity to Cushing to 120,000 b/d. This is scheduled to be finished by the third quarter.

Expansion of the pipeline is expected to increase the quantity of waterborne foreign crude delivered to the mid-continent area and improve the liquidity of the Cushing market in the face of declining U.S. crude oil production.

The New York Mercantile Exchange specifies Cushing as the delivery point for its light crude oil futures contract.

Z. Lou Guttman, Nymex chairman, hailed the expansion as a step toward ''alleviating the growing U.S. crude oil supply shortfall." More than 17 million barrels of foreign crude have been transported on the pipeline since its start-up in March 1988.

A critical component of the project calls for linking Arco Pipe Line's Texas City marine terminal to the expanded distribution network that now terminates in Houston.

This link, expected to be completed this year, will give foreign shippers an additional port through which to move crude from the Gulf Coast to points north. It will also enable refiners, crude oil marketers and the trading community to easily split cargoes for multiple delivery locations.

"Exchanging crude oil positions with companies from the Gulf Coast to Midland (Texas) and Canada will be effortless using APL's intra-system transfer service in place at Texas City," Daniel Gallas, president of the pipeline company, said.

Significant modifications in the expansion program include a new pipeline that will be installed across the Houston Ship Channel connecting APL's Texas City marine terminal with the 20-inch line going north to Cushing. This terminal is capable of unloading two partially lightered 150,000-deadweight- ton ships simultaneously and is designed to pump nearly a million barrels a day.

By connecting the Texas City terminal to APL's system, shippers can deliver cargoes to Texas City and Houston area refineries, as well as refineries in the mid-continent, Great Lakes region and Northeast areas. Ships can also be discharged at the Amerada Hess terminal on the Houston Ship Channel, which will remain an origin station for Arco Pipe Line.

APL will also connect the Texas City to Cushing system with Texaco's East Houston tank farm and Oiltanking's Houston terminal, giving shippers even more flexibility.

A new tank farm and pump station will be constructed on the north side of the Houston Ship Channel to receive crude oil from the above connections and redeliver north to the mid-continent.