Tulsa, Okla.-based Magellan Midstream Partners (NYSE: MMP) and Breinigsville, Pa.'s Buckeye Partners (NYSE: BPL) announced that they have begun a joint assessment to determine the feasibility of constructing a dedicated ethanol pipeline that would run from the Midwest to the northeastern U.S.

The two oil products pipeline companies said the pipeline is expected to cost over $3 billion, covering 1,700 miles and taking several years to build.

"We believe the proposed pipeline is a unique and innovative solution to meeting the growing need for renewable fuels in the Northeast," said Don Wellendorf, president and CEO of Magellan.

The companies said the pipeline would have the capacity to supply more than 10 million gallons of ethanol per day, gathering ethanol from production facilities in Iowa, Illinois, Minnesota and South Dakota to serve terminals in major markets such as Pittsburgh, Philadelphia and New York.

"This feasibility study will evaluate the possible use of existing right-of-ways and workforces as well as other synergies and resources that our companies have," said Eric Gustafson, Sr. VP and COO of Buckeye.

In addition to assessing governmental support, financing and technical issues, Magellan and Buckeye said the study would also review construction requirements, construction costs, project economics, regulatory issues and other matters.

The companies said the technical and feasibility studies could be complete in the second half of 2008, but pointed out that the necessary governmental support, the timing of which is unknown at this time, is critical for the partnerships to make a decision on proceeding with construction.