Magellan Midstream Partners is planning to spend $1.75bn on expansion projects over the next three years the company has revealed. Based on the progress of expansion projects already underway, the partnership has earmarked $600 million in 2017, $800 million in 2018 and $350 million in 2019 to complete its current slate of construction projects. These include the partnership’s recently announced projects to expand its Pasadena, Texas marine storage terminal, to build a crude oil and condensate pipeline from the Delaware Basin to the origin of the Longhorn pipeline in Crane, Texas and to expand Magellan’s refined products pipeline system in Texas. It also includes the construction of an incremental 1.5 million barrels of crude oil storage in Cushing, Oklahoma and Corpus Christi on a combined basis, which is supported by customer commitments.
The Cheyenne extension of the Saddlehorn pipeline commenced operations in early October, and the new connection of Magellan’s Little Rock pipeline segment to a third-party pipeline is now complete, providing customers the option to ultimately transport refined products to the greater Memphis, Tennessee market.
The company also continues to make significant progress on its other construction projects. The new 24-inch diameter crude oil pipeline being constructed from the partnership’s East Houston terminal to Holland Avenue is now expected to be operational in early 2018 to help facilitate incremental crude oil shipments within the Houston and Texas City region. The expansion of the Seabrook Logistics joint venture, which includes the addition of 1.7 million barrels of storage and connectivity to Magellan’s Houston crude oil distribution system, remains on target for a mid-2018 start-up.
Magellan has also released details of its Q3 results; net income was $198.5m compared to $194.6m for third quarter 2016. The 2017 results include an $18.5 million gain related to the sale of an inactive terminal along the partnership’s refined products pipeline system.
Chief Executive Officer, Michael Mears said: “Magellan generated financial results during the third quarter of 2017 that were consistent with our expectations despite Hurricane Harvey, which negatively impacted the operations of each of our business segments for a period of time. Magellan’s employees stepped up to the challenge and worked together as a true enterprise-wide team to safely resume operations as soon as possible while doing our best to limit the impact to our customers and the markets we serve. Further, the third quarter of 2017 was also notable because we launched three new large-scale construction projects for fee-based refined products and crude oil pipeline and storage assets that increased our expansion capital spending by $600 million, helping to solidify Magellan’s future growth.”
For more information visit www.magellanlp.com
7th Nov 2017