Magellan and Enterprise have joined with ICE in new contract

The US terminalling firms Magellan Midstream Partners and Enterprise Products Partners joined forces with US exchange technology company Intercontinental Exchange to create a new futures contract. 

Executive vice president and chief commercial officer of Enterprise’s general partner, Brent Secrest, said: “Between Magellan and Enterprise, we offer access to virtually all of the export capacity in the Houston region, redundant connectivity to all area refineries, a robust Gulf Coast storage position and interconnects to all of the relevant supply pipelines, including those owned by third parties.”

The Midland WTI American Gulf Coast contract was set up in response to demand for a Houston-based index with greater scale, flow assurance and price transparency. Magellan and Enterprise will cease provisions for delivery services under current futures contracts once the Midland WTI American Gulf Coast contract is approved. 

Harold Hamm, chairman of Continental Resources said that when the Cushing, Oklahoma WTI price fell to -$38, it was a ‘wake-up call’ for the industry. 

He said: “We think a futures contract in the most interconnected market centre in the country, with a widely accepted quality spec, which settles with guaranteed delivery of crude oil is an important new alternative for the industry. 

“The task force has worked tirelessly to create a marker with transparency and liquidity that is waterborne for this modern era. The Midland WTI American Gulf Coast futures contract established by the alliance between ICE, Magellan and Enterprise is a huge step forward for the industry and goes a long way to accomplishing the mission on which the task force has been working.”

The futures contract will use ICE’s industry-recognised, state-of-the-art trading platform. Subject to regulatory approval, the companies plan to launch the contract by early 2022.

For more information visit www.intercontinentalexchange.com

24th June 2021