Magellan Midstream Partners LP, Tulsa, has completed construction of the new pipeline set to expand the company’s refined petroleum products pipeline system from the Houston area to El Paso, Tex., to a new capacity of about 100,000 b/d.
The 30,000 b/d, 16-in., 30-mile pipeline runs along the existing route between Odessa and Crane, Tex. New operational storage to facilitate incremental shipments is currently under construction (OGJ Online, Aug. 29, 2022).
An early 2024 start-up is still expected, the company said as part of its earnings release Aug. 3.
The company currently can transport about 70,000 b/d of refined petroleum products (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 its pipeline system, as well as Arizona and Mexico via connections to third-party pipelines.
The company said it still expects the $18.8-billion merger with ONEOK to close before year-end (OGJ Online, May 15, 2023). A unitholder vote will be held Sept. 21.
Second-quarter earnings
As a standalone company, Magellan had net income of $239 million for second-quarter 2023, compared with $354 million for second-quarter 2022. The prior period included a $162 million gain on the sale of discontinued operations related to the June 2022 divestiture of its independent terminals network (OGJ Online, June 3, 2022). Excluding the prior period gain, the increase in second-quarter 2023 net income was driven by higher profits from commodity-related activities and overall improved financial results from core fee-based transportation and terminals activities.
Distributable cash flow was $312 million for the quarter, compared with $228 million for the same period a year ago. Free cash flow was $271 million during second-quarter 2023, compared with $649 million in the year-ago quarter, which included $447 million of total proceeds from the sale of its independent terminals network.