Magellan Midstream to Expand Refined Products Pipeline System to El Paso
Magellan Midstream Partners announced plans to expand its refined petroleum products pipeline system from Houston to El Paso, Texas, following a successful open season. This expansion aims to increase capacity from 70,000 barrels per day to 100,000 barrels per day by constructing a new 16-inch, 30-mile pipeline and enhancing operational storage. The project is expected to cost approximately $125 million and be completed by early 2024, pending necessary approvals. CEO Aaron Milford highlighted strong market demand and take-or-pay commitments from quality customers.
- Expansion of capacity from 70,000 bpd to 100,000 bpd, indicating strong demand.
- Investment of approximately $125 million, signaling commitment to infrastructure growth.
- Take-or-pay commitments from quality customers provide a reliable revenue stream.
- Project completion is contingent upon obtaining necessary permits and approvals, introducing potential delays.
- Risks associated with construction costs and timely completion could affect projected returns.
- Market demand fluctuations for refined petroleum products may impact future revenues.
TULSA, Okla., Aug. 29, 2022 /PRNewswire/ -- Magellan Midstream Partners, L.P. (NYSE: MMP) announced today that following a successful open season, we plan to expand our refined petroleum products pipeline system from the Houston area to El Paso, Texas.
Magellan is currently capable of transporting approximately 70,000 barrels per day (bpd) of refined petroleum products, such as gasoline and diesel fuel, from Gulf Coast and Mid-Continent refineries to El Paso, with further shipper optionality to access markets in New Mexico through our pipeline system, as well as Arizona and Mexico via connections to third-party pipelines.
Based on significant customer interest, Magellan is expanding our operating capabilities to El Paso to a new capacity of approximately 100,000 bpd. The expanded capacity will be accomplished by the construction of a new 16-inch, 30-mile pipeline along our existing route between Odessa and Crane, Texas and additional operational storage to facilitate incremental shipments.
"Building on the 2020 expansion of our West Texas refined products pipeline system, Magellan is pleased to further expand our capabilities to El Paso, which serves as the gateway to a number of key demand centers that can benefit from our system's extensive optionality," said Aaron Milford, chief executive officer. "To meet strong market demand, we have increased the scope of this expansion to deliver essential fuels supported by take-or-pay commitments from quality customers, providing an attractive return for our investors."
Magellan currently expects to spend approximately
About Magellan Midstream Partners, L.P.
Magellan Midstream Partners, L.P. (NYSE: MMP) is a publicly traded partnership that primarily transports, stores and distributes refined petroleum products and crude oil. Magellan owns the longest refined petroleum products pipeline system in the country, with access to nearly
Except for statements of historical fact, this news release constitutes forward-looking statements as defined by federal law. Although management of Magellan Midstream Partners, L.P. believes such statements are based on reasonable assumptions, such statements necessarily involve known and unknown risks and uncertainties that may cause actual outcomes to be materially different. Risk factors associated with the project that could cause unexpected outcomes include: our ability to obtain all required rights of way, permits and regulatory approvals; our ability to complete construction of the project on time and at expected costs; changes in supply of or demand for refined petroleum products; and failure of customers and vendors to perform their contractual obligations to us. Additional risks are described in Magellan's filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2021 and subsequent reports on Forms 8-K and 10-Q. You are urged to carefully review and consider the cautionary statements and other disclosures made herein and in those filings, especially under the headings "Risk Factors" and "Forward-Looking Statements." Forward-looking statements made by Magellan in this news release are based only on information currently known, and we undertake no obligation to revise our forward-looking statements to reflect future events or circumstances.
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SOURCE Magellan Midstream Partners, L.P.
FAQ
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