$375m storage and pipeline expansions planned by Magellan Midstream and Valero Energy Corporation

Magellan Midstream Partners, L.P. is planning to spend $375m on the construction of 1 million barrels of refined products storage on a combined basis at its facilities in Dallas, East Houston and Hearne along with building a 135-mile, 16-inch pipeline from its terminal in East Houston to Hearne, Texas. Once complete the pipeline will help to meet incremental demand for transportation of gasoline, diesel fuel and jet fuel to central and north Texas markets.

Magellan will own the pipeline via an undivided joint interest agreement with Valero Energy Corporation. Magellan’s ownership interest in this new pipe will provide the ability to deliver additional product north to Temple, Waco and Dallas as well as Magellan’s Midcontinent markets, including Little Rock, Arkansas.

The company plans to reverse an existing pipeline which will connect to the new pipeline segment, providing Magellan an incremental 85,000 barrels per day of refined products capacity originating from the Houston area, for an increase of nearly 50% to service Magellan’s Texas, Midcontinent and Little Rock markets.

Magellan will also create additional connections to third-party refineries, pipelines and terminals within the Houston Gulf Coast region, including Magellan’s new Pasadena, Texas marine terminal that is currently under construction and expected to be operational in early 2019.

CEO, Michael Mears said: “Demand for refined petroleum products remains strong along Magellan’s extensive pipeline system. Magellan is pleased to meet the industry’s need for pipeline capacity serving the Dallas market and other important demand centers along our refined products pipeline system with an attractive investment supported by long-term commitments from well-known, strong creditworthy customers.”

For more information visit www.magellanlp.com

7th Sept 2017