Magellan
Midstream Partners, L.P. plans to expand its refined products pipeline
system to handle incremental demand for transportation of gasoline,
diesel fuel and jet fuel to markets in Central and North Texas, the
company announced Wednesday.
“Demand for refined petroleum products remains strong
along Magellan’s extensive pipeline system,” Magellan CEO Michael Mears
said in a company statement.
“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.”
The project entails constructing an approximately 135-mile, 16-inch pipeline from Magellan’s terminal in East Houston to Hearne,
Texas, the company stated. Magellan noted that it will own the new
pipeline via an undivided joint interest deal with Valero Energy Corp.
Magellan also stated that its stake in the new pipe will enable delivery
of additional product north to Temple, Waco and Dallas as well as to
its Midcontinent markets, including Little Rock, Ark.
In addition, Magellan said that it plans to reverse an existing
pipeline linked to the new segment in order to provide an incremental
85,000 barrels per day of refined products capacity from the Houston
area.
The reversal will facilitate a nearly 50-percent increase
to service Magellan’s Texas, Midcontinent and Little Rock markets, the
company stated.
Magellan also said that it will make various enhancements to its existing pipeline and terminal infrastructure,
including constructing 1 million barrels of refined products storage on
a combined basis at its facilities in Dallas, East Houston and Hearne.
Moreover, it plans additional connections to third-party refineries,
pipelines and terminals within the Houston Gulf Coast region. Magellan’s new marine terminal in Pasadena,
Texas, will be one such linked facility; the Pasadena terminal is under
construction and should begin operations in early 2019, Magellan
stated.
Magellan reported that it expects to spend approximately $375 million
for its share of the Texas expansion project. It anticipates the
expanded refined products capacity will be available in mid-2019,
subject to necessary permits and regulatory approvals.
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