Feb. 24--A proposed expansion of a gas pipeline that runs through Oxford is on hold indefinitely, the pipeline's owners announced Monday.

Sam Whitehead, a spokesman for Georgia-based Colonial Pipeline, could not say when the company might pursue the expansion originally planned for completion by 2012. He said the company is delaying the project because of the downturn in demand for petroleum worldwide.

The pipeline, which runs from Houston to New Jersey, is one of two pipelines that serve Oxford and much of the rest of the area. The pipes connect with a terminal on U.S. 78 owned by Arkansas-based Murphy Oil Corp.

The planned 460-mile expansion, first announced in 2006, would add a third pipe between Baton Rouge, La., and Atlanta. A Colonial spokesman said in October expansion would help consumers in the Southeast because it would give the company the ability to carry more petroleum products. Whitehead said then that "about 20 percent of the time" the company can't keep up with customer demand.

The price of gasoline then was more than $2 a gallon.

"The urgency of doing this now is not as clear as it was in 2006," Colonial President and CEO Tim Felt said in a press release issued Monday.

The project's cost was originally estimated at $3 billion, but Whitehead said there is not a recent estimate that reflects the lowered price of steel and contract costs.

But if the cost of building the expansion is lower why wouldn't the company take advantage of it and build it now?

"It's possible (to do) but its an awfully big gamble on what the future volumes are going to be and if they're not sufficient to earn the money to pay back the cost of the project that would be a mistake," Whitehead said. "At the very least we know it's not as urgent as it was in the last couple of years."

Whitehead said the company continues to seek permits that would allow it to construct the pipeline. In the release, Felt said the company is confident the economy will rebound.

When asked if holding off on the expansion would create supply problems down the road, Whitehead said, "It's too early to tell."

"It certainly could if things come back as quickly as they went down hill," he said.

About Dan Whisenhunt Dan Whisenhunt covers Oxford, Lincoln and Munford for The Star. He also writes the Pushing Buttons column.

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