Mid Ohio Pipelines’ (MOP) oil and gas company shares rose 8% on Wednesday after the company announced it has raised $1 billion to finance its massive expansion of its existing pipelines into the state.
The stock climbed $2.50 to $24.71 after MOP’s CEO, Mark Schiller, said the $1.2 billion would support the company’s expansion into a new pipeline system that is set to begin operations later this year.
The $1-billion fund, called the Mid Ohio Regional Development Corporation, has already raised about $1 million from private investors.
The company has $5 billion in cash on hand, including about $2 billion from the U.S. Department of Energy.
“This is a huge step forward for our company, our state, and our nation,” Schiller said.
“The pipeline system will be the largest in the country and is a key to our state’s long-term economic recovery.”MOP is a subsidiary of MidOhio Pipeline Holdings LLC.
It is the second largest pipeline operator in the state with more than 7,000 miles of pipeline.
The project is expected to produce 1.3 million barrels of oil per day by 2020.
The state currently has a backlog of about 1.5 million barrels, and a backlog will likely rise over time, according to MOP.MOP, which is owned by Marathon Oil and is based in Cleveland, plans to expand the pipeline network to 830 miles by the end of the decade.
The expansion will help fill a major gap in Ohio’s transportation network and increase the state’s capacity to supply other parts of the U,S.
Midwest, Schiller noted.MOPS pipeline system was approved in 2008 and built by Marathon in Cleveland and in Kentucky.
The pipeline system carries crude oil to an export terminal in Akron.
The expanded pipeline system is scheduled to be completed by 2021.