Magellan Midstream Partners LP plans to expand its refined petroleum products pipeline system in Texas to handle incremental demand for transportation of gasoline, diesel fuel, and jet fuel to the central and northern portions of the state.
Supported by long-term customer commitments, Magellan plans to build a 135-mile, 16-in. pipeline from its terminal in East Houston to Hearne, Tex. The company will own the newly constructed pipeline via an undivided joint interest agreement with Valero Energy Corp. Magellan’s ownership interest in the new pipeline will enable it to deliver additional product north to Temple, Waco, and Dallas as well as the company’s Midcontinent markets, including Little Rock, Ark.
Magellan plans to reverse an existing pipeline that will connect to the new pipeline segment, providing the company an incremental 85,000 b/d of refined products capacity originating from the Houston area for an increase of nearly 50% to service the Texas, Midcontinent, and Little Rock markets.
The company also will make enhancements to its existing pipeline and terminal infrastructure, including construction of 1 million bbl of refined products storage on a combined basis at its facilities in Dallas, East Houston, and Hearne, and additional connections to third-party refineries, pipelines, and terminals in the Houston Gulf Coast region, including Magellan’s new Pasadena, Tex., marine terminal currently under construction and expected to be operational in early 2019.
Magellan expects to spend $375 million for its share of the project, with the expanded capacity available in mid-2019, subject to receipt of necessary permits and regulatory approvals.
If warranted by additional customer demand, Magellan’s pipeline capacity originating in the Houston area could be further increased.