Two pipeline operators plan to use new and existing pipelines to build a system by the end of 2012 to move the glut of crude oil in Cushing, Okla., to refineries at the Gulf Coast, the firms said on Tuesday.

Enterprise Product Partners and Energy Transfer Partners LP will form a joint venture to design and construct a 400,000 barrel per day crude oil pipeline from Cushing to Houston, Texas.

The project also includes construction of an additional 500,000 barrels of crude oil storage at Enterprise's existing crude oil storage facility in Houston.

The majority of the pipeline route will follow an existing pipeline corridor for the most part, said Rick Rainey, a spokesman for Enterprise, making it likely that it will be completed before other projects under consideration.

"That makes it easier," said Rainey, who said a team is in place to survey the remaining right-of-ways needed.

The 584-mile (940-km) pipeline will carry crude currently landlocked at Enterprise's 3.1 million barrel crude oil facility in Cushing to the nation's largest concentration of oil refineries along the coasts of Texas and Louisiana.

Crude oil from existing and new oil plays in both the United States and Canada has built up in Cushing, depressing the price of U.S. benchmark West Texas Intermediate relative to the North Sea marker, Brent crude, by as much as $16 a barrel.

Refiners and shippers have expressed interest in the project.

"Discussions with potential shippers about the proposed pipeline have gained momentum as the spread between the WTI benchmark and foreign crudes has widened. So far, the response to the project has been very positive," said Rainey.

The companies did not give an estimated cost to build the pipeline. The project involves converting a 240-mile, 24-inch (61-cm) natural gas pipeline owned by Energy Transfer into a crude pipeline.

The pipeline, expected to be in service by the end of 2012, will end at Enterprise's ECHO crude oil storage and terminal facility in southeast Harris County, offering access to major refining centers in Texas City, Pasadena, Deer Park, Baytown and to the Houston Ship Channel.

Other pipeline projects to siphon off crude from Cushing, the delivery point of the NYMEX crude oil contract, are on the drawing board. TransCanada Corp's Keystone XL project to carry 500,000 bpd was originally scheduled to open in 2013 but that appears unlikely as it is still awaiting approval from the U.S. government.

The U.S. Energy Information Administration in December estimated Cushing storage capacity at 55 million barrels. On Wednesday, a near record 41.1 million barrels were in storage there, the EIA said.

"If all the pipelines from Cushing to the Gulf Coast that are currently being proposed turn into reality, there will be sufficient pipeline capacity to cope with the expansion of Western Canadian production and shale oil output for many years," said Lawrence Eagles, analyst with JP Morgan.

Eagles also said that it seems unlikely that a solution to the current bottleneck will be found before the fourth quarter of 2012.