TULSA, Okla. – Magellan Midstream Partners, L.P. (NYSE: MMP) announced that it has acquired a 50 percent ownership in Osage Pipe Line Company, LLC, which owns the Osage pipeline, for $25 million from National Cooperative Refinery Association (NCRA). The 135-mile Osage pipeline transports crude oil from Cushing, Oklahoma to El Dorado, Kansas with connections to the NCRA refinery in McPherson, Kansas and the Frontier refinery in El Dorado, Kansas. The remaining 50 percent interest in Osage Pipe Line Company, LLC will continue to be owned by NCRA.
Magellan Pipeline Company, LLC will serve as operator of the pipeline following a transition period to replace the current operator.
“The partnership's entry into the crude oil pipeline business is a natural progression for us,” said Don Wellendorf, chief executive officer. “Our refined petroleum products pipeline system operates in the same geographic area as Osage, which we expect will provide operational synergies for Magellan and Osage.”
The acquisition was funded with cash on hand and is expected to increase the partnership's 2004 earnings and cash flow by approximately 3 cents per limited partner unit. Beginning in 2005, the pipeline is expected to generate annual earnings and cash flow of at least 5 cents per unit for Magellan's limited partners.
About Magellan Midstream Partners, L.P.
Magellan Midstream Partners, L.P. is a publicly traded partnership formed to own, operate and acquire a diversified portfolio of energy assets. The partnership primarily transports, stores and distributes refined petroleum products. More information is available at www.magellanlp.com.
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Portions of this document may constitute "forward-looking statements" as defined by federal law. Although the partnership believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. Any such statements are made in reliance on the "safe harbor" protections provided under the Private Securities Reform Act of 1995. Additional information about issues that could lead to material changes in performance is contained in the partnership's filings with the Securities and Exchange Commission.