Magellan Midstream to Expand Texas Refined Petroleum Products Pipeline System

TULSA, Okla. – Magellan Midstream Partners, L.P. (NYSE: MMP) announced today plans to expand its refined petroleum products pipeline system to handle incremental demand for transportation of gasoline, diesel fuel and jet fuel to central and north Texas markets.

Supported by long-term customer commitments, Magellan plans to build an approximately 135-mile, 16-inch pipeline from its terminal in East Houston to Hearne, Texas. Magellan will own the newly-constructed pipeline from East Houston to Hearne via an undivided joint interest agreement with Valero Energy Corporation (NYSE: VLO). Magellan’s ownership interest in this new pipe will provide the ability to deliver additional product north to Temple, Waco and Dallas as well as Magellan’s Midcontinent markets, including Little Rock, Arkansas. Magellan plans to reverse an existing pipeline which will connect to the new pipeline segment, providing Magellan an incremental 85,000 barrels per day of refined products capacity originating from the Houston area, for an increase of nearly 50% to service Magellan’s Texas, Midcontinent and Little Rock markets.

In addition, Magellan will make a number of enhancements to its existing pipeline and terminal infrastructure, including construction of 1 million barrels 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 within the Houston Gulf Coast region, including Magellan’s new Pasadena, Texas marine terminal that is currently under construction and expected to be operational in early 2019.

Magellan currently expects to spend approximately $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. 

“Demand for refined petroleum products remains strong along Magellan’s extensive pipeline system,” said Michael Mears, chief executive officer. “Magellan is pleased to meet the industry’s need for pipeline capacity serving the Dallas market and other important demand centers along our refined products pipeline system with an attractive investment supported by long-term commitments from well-known, strong creditworthy customers.”

If warranted by additional customer demand, Magellan’s pipeline capacity originating in the Houston area could be further increased.

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. The partnership 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 approximately 100 million barrels of petroleum products such as gasoline, diesel fuel and crude oil. More information is available at www.magellanlp.com.


Portions of this document constitute forward-looking statements as defined by federal law. Although management believes any such statements are based on reasonable assumptions, actual outcomes could be materially different. Among the key risk factors that may have a direct impact on the statements made in this news release are: (1) the ability to obtain required rights-of-way, permits and other approvals on a timely basis; (2) price fluctuations and overall demand for refined petroleum 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 the partnership’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2016 and subsequent reports on Forms 8-K and 10-Q. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, especially under the heading “Risk Factors.” Forward-looking statements made by the partnership in this release are based only on information currently known, and the partnership undertakes no obligation to revise its forward-looking statements to reflect events or circumstances learned of or occurring after today's date.

Contact Information: 
Paula Farrell Investor Relations (918) 574-7650 paula.farrell@magellanlp.com 
Bruce Heine Media Relations (918) 574-7010 bruce.heine@magellanlp.com