UPDATE 1-Buckeye's New Jersey petroleum connection ahead of schedule

Fri May 3, 2013 3:34pm EDT

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May 3 (Reuters) - A project to connect Buckeye Partners LP's Perth Amboy, New Jersey, terminal to a pipeline transportation hub in nearby Linden is about three months ahead of schedule, Buckeye Chief Executive Clark Smith said on Friday.

A pipeline linking the two sites is expected to be completed in April 2014, Smith said during the pipeline operator's first-quarter 2013 earnings call. In the interim, a separate pipeline linking Perth Amboy to Linden via Colonial Pipeline is expected to become operational in September 2013, Smith said.

Once in Linden, petroleum products transferred from Perth Amboy can be sent to Buckeye's other Northeast delivery points, which include New York City-area airports, Long Island, upstate New York and western Pennsylvania, said Kevin Goodwin, Buckeye's director of investor relations.

Buckeye bought the Perth Amboy terminal from Chevron Corp in July 2012 for $260 million in cash. The terminal can store more than 4 million barrels of liquid petroleum products and is accessible by barge and pipeline. Modernization projects are also under way to make the terminal accessible via truck and rail.

Smith said product shippers have expressed interest in opening the terminal to inbound crude-by-rail shipments. The company is also in "advanced discussions with potential gasoline blending customers that have expressed strong interest in the facility," Smith said, citing the direct pipeline connection to Linden as a key reason for the interest.

Buckeye expects to spend between $200 million and $235 million in 2013 on expansion projects, Smith said.

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