Difference between Tolling Agreement and a Purchase Agreement

Tolling Agreements:

  • Customer retains ownership of product
  • Magellan processes transmix for a set fee per gallon
  • Processing time is less than 45 days
  • Finished products are allocated at Fractionator location
  • Customer has option of re-consigning product
  • Product price risks are retained by Customer

Purchasing Agreements:

  • Customer sells the product to Magellan
  • Magellan purchases transmix for a set discount per gallon to index
  • Product price risks are assumed by Magellan

For all transmix agreements, customer must provide a representation that product processed by Magellan meets the EPA regulatory definition of “transmix” located in 40 CFR 80.84 “Treatment of interface and transmix”.

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