The nation’s largest ethanol producer is joining forces with a fuel transportation and distribution company to work on the development of a pipeline to deliver ethanol from the Midwest to distribution terminals in the northeastern United States.

South Dakota-based POET just signed a joint development agreement with Magellan Midstream Partners of Tulsa, Oklahoma to continue assessing the feasibility of constructing a dedicated ethanol pipeline.

The proposed common carrier pipeline system would gather ethanol from production facilities 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 approximately 1,700 miles and would take several years to complete.

The feasibility of this project is dependent upon 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.