Tulsa,
OK and Mechelen, Belgium – Magellan Midstream Partners, L.P.
(NYSE: MMP) (“Magellan”) and LBC Tank Terminals, LLC (“LBC”) announced today
that they have formed a 50/50 limited liability company Seabrook Logistics, LLC
(“JV”), to own and operate crude oil storage and pipeline infrastructure in the
Houston Gulf Coast area.
The assets to be constructed and
owned by the JV include over 700,000 barrels of new crude oil storage and other
distribution infrastructure located adjacent to LBC’s existing terminal in
Seabrook, TX. In addition, the JV will construct and own a new 18-inch diameter
pipeline, which will connect the new storage to an existing third party
pipeline that will transport crude oil to a Houston-area refinery. An agreement
has also been executed to allow the JV to utilize LBC’s dock suitable for industry
standard Aframax vessels with up to a 45-foot draft and two barge docks, which
will provide efficient marine access with flexible loading and unloading
services at the Seabrook facility.
“Magellan is excited about developing
a new project with LBC in the Houston market to provide a cost efficient and
reliable option to store, transport and distribute crude oil along the Gulf
Coast,” said Michael Mears, Magellan’s president and chief executive officer. “We
also see growth opportunities at this new facility through the potential
connection and integration of this terminal into Magellan’s Houston crude oil
and refined products pipeline systems.”
“LBC is pleased to enter into this
joint venture with Magellan. This expansion of our Houston area terminal is an
important step in LBC's growth strategy,” said Walter Wattenbergh, LBC’s chief
executive officer. “We look forward to executing this project as a part of our
expansion plans in the crude and refined products markets in the U.S."
The project is currently estimated
to cost approximately $95 million and is supported by a long-term storage and
transportation commitment with a major refiner. Magellan will be responsible
for constructing, maintaining and operating the new pipeline, and LBC will be
responsible for constructing, maintaining and operating the new storage tanks
and other terminal assets.
Subject to the receipt of permits
and regulatory approvals, the new storage facility and pipeline infrastructure
are expected to be operational in the first quarter of 2017.
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 50% of the nation’s refining capacity, and can store more than 95
million barrels of petroleum products such as gasoline, diesel fuel and crude
oil. More information is available at www.magellanlp.com.
About LBC Tank Terminals
LBC Tank
Terminals is one of the largest global operators of bulk liquid storage
facilities for chemical petroleum products and base oil products. LBC owns and
operates a global network of terminals at key locations in the United States,
Europe and China, while offering loading / unloading services for all modes of
transportation. For more information visit: www.lbctt.com.
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Portions of this document constitute
forward-looking statements as defined by federal law. Although management of
Magellan Midstream Partners, L.P. and LBC Tank Terminals, LLC believe any such
statements are based on reasonable assumptions, there is no assurance that
actual outcomes will not be materially different. Among the key risk factors associated
with the project that may have a direct impact on its operating and financial
results are: (1) the ability to obtain all required rights-of-way, permits and
regulatory or other approvals on a timely basis; (2) price fluctuations and
overall demand for crude oil and refined products; (3) changes in tariff rates
or other terms imposed by state or federal regulatory agencies; (4) the
occurrence of an operational hazard or unforeseen interruption; and (5)
willingness to incur or failure of customers or vendors to meet or continue
contractual obligations. Additional information about issues that could lead to
material changes in performance is contained in Magellan’s filings with the
Securities and Exchange Commission. The companies undertake no obligation to
revise these forward-looking statements to reflect events or circumstances
occurring after today's date.