Magellan Midstream Expands Current Project Slate to $2 Billion with Texas Expansions

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Researched by Industrial Info Resources (Sugar Land, Texas)--Magellan Midstream Partners (NYSE:MMP) (Tulsa, Oklahoma) continues to expand, and then expand some more, as it identifies opportunities for future oil pipeline and storage facility growth.

The partnership now says it expects to spend about $900 million in both 2018 and 2019, and $200 million in 2020 to complete its current $2 billion slate of projects. In May, the company said it expected to spend about $950 million in 2018 and $425 million in 2019. For more information, see May 4, 2018, article - Magellan Midstream Boosts Capital Spending as Projects Heat Up Along Texas Gulf Coast.

The partnership recently announced planned projects to further expand its West Texas refined products pipeline system and its Seabrook Logistics joint venture.

At the West Texas refined products pipeline system, Magellan had previously announced plans to expand the western leg of its refined petroleum products pipeline system to 150,000 barrels per day (BBL/d) from the current 100,000 BBL/d. The partnership now plans to expand the pipe capacity to 175,000 BBL/d. The expanded capacity will handle incremental shipments of gasoline and diesel fuel to demand centers in Abilene, Midland/Odessa and El Paso, Texas and New Mexico. The expansion will include increased pipeline diameter along the partnership's existing route and construction of 140 miles of new pipe from Hearne to Alexander in Texas.

Industrial Info is tracking $300 million in project activity tied to the West Texas refined products pipeline system. For more information, see Industrial Info's project report.

In June, Magellan announced a further expansion of Seabrook Logistics, LLC, a 50/50 joint venture of subsidiaries of Magellan and LBC Tank Terminals (Mechelen, Belgium). The joint venture plans to construct nearly 700,000 barrels of additional crude oil and condensate storage at the Seabrook, Texas, facility as well as a Suezmax dock with up to a 45-foot-draft and 400,000-BBL/day dock capacity. The expansion is expected to be operational by late 2019. For more information, see Industrial Info's project report.

Demand for crude oil storage and export capabilities continues to grow in the Houston Gulf Coast Area with increased crude oil production in the Permian Basin and other regions, noted Magellan Chief Executive Officer Michael Mears in a press release.

Magellan said in early August that its other large expansion projects remain on time and on budget.

Construction continues on a grassroot refined petroleum products and ethanol marine terminal in Pasadena, Texas, a joint venture with Valero Energy Corporation (NYSE:VLO) (San Antonio, Texas). "The initial 1 million barrels of storage is substantially complete, and the facility is expected to begin service in January 2019 after the pipe connectivity and dock work are finished later this year," Magellan said in a press release. "The additional 4 million barrels of storage under construction at Pasadena is expected to come online by January 2020, with substantially all steel already ordered from domestic mills."

For more information, see Industrial Info's project report on the marine terminal and the planned phase II expansion.

Work also continues on the partnership's refined products pipeline from Houston, Texas, to Hearne, Texas, with plans for a mid-2019 service date. Plans for the 135-mile, 85,000-BBL/d pipeline were first announced in September 2017. The pipeline will move gasoline, diesel and jet fuel from Magellan's terminal in east Houston to Hearn, with the goal of providing fuel to north Texas as well as mid-continent markets, including Little Rock, Arkansas. For more information, see Industrial Info's project report.

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