Magellan Midstream Announces Long-Term Pipeline Throughput Agreement, $65 Million Expansion of Texas Storage Capacity

TULSA, Okla. – Magellan Midstream Partners, L.P. (NYSE: MMP) announced today that it has negotiated a long-term customer contract to transport refined petroleum products on its Houston-to-El Paso pipeline, formerly known as the Longhorn pipeline. Through a volume incentive tariff, the third-party shipper will transport at least 20,000 barrels per day of refined petroleum products under a 12.5-year take-or-pay agreement to El Paso, Texas beginning in late third quarter or early fourth quarter 2010. The product subsequently will be delivered to Juarez, Mexico via a newly-constructed third-party pipeline that connects to Magellan’s El Paso, Texas terminal.

Currently, the partnership’s Houston-to-El Paso pipeline can transport up to 90,000 barrels per day to the El Paso market. As previously announced, Magellan is analyzing the potential reversal and conversion of a portion of this pipeline to crude oil service. If the reversal and conversion is pursued, the partnership would still be able to transport at least 60,000 barrels per day of refined petroleum products to the El Paso market by enhancing the operational connectivity of its nearby pipeline infrastructure.

“This contract reinforces our continued optimism about the long-term prospects for our Houston-to-El Paso pipeline, with strong interest being expressed by several potential customers,” said Don Wellendorf, chief executive officer. “Regardless of whether we retain this system solely in refined products service or convert a portion to crude oil transportation, we believe this pipeline will play a key role in the transport of petroleum products in the Southwestern United States and to neighboring markets in Northern Mexico.”

Storage capacity expansion. Magellan plans to build an additional 1.5 million barrels of refined petroleum products storage at its Galena Park, Texas marine terminal supported by long-term customer contracts. Of this new storage, 0.8 million barrels will be jointly owned with a third party. Magellan also will make improvements to increase the capacity at its existing terminal docks. The storage and dock construction projects are expected to be operational beginning late 2012, with Magellan’s portion of the cost expected to be approximately $65 million.



About Magellan Midstream Partners, L.P.

Magellan Midstream Partners, L.P. (NYSE: MMP) 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 http://www.magellanlp.com.



Portions of this document may constitute forward-looking statements as defined by federal law. Although management believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. 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. 

Contact Information:

Paula Farrell Magellan Midstream Partners, L.P. Investor Relations 918-574-7650 paula.farrell@magellanlp.com  
Bruce Heine Magellan Midstream Partners, L.P. Media Relations 918-574-7010 bruce.heine@magellanlp.com  

Contact Information:

Paula Farrell Investor Relations 918-574-7650 paula.farrell@magellanlp.com