TULSA, Okla. – Magellan
Midstream Partners, L.P. (NYSE: MMP) announced today that it plans to proceed
with the recently-announced Saddlehorn Pipeline to transport various grades of
crude oil from the Niobrara play in northeast Colorado to Magellan’s storage
facilities in Cushing, Oklahoma. Binding commitments have been received from a
wholly owned subsidiary of Anadarko Petroleum Corporation and Noble Energy, Inc.
as part of the pipeline’s ongoing open season. Based on these commitments,
Magellan is proceeding with the Saddlehorn Pipeline.
The current open season for
the Saddlehorn Pipeline has been extended and includes a new tariff rate
structure, with binding commitments now due from potential shippers by 5:00 p.m.
Central Time on Nov. 20, 2014. All potential customers will have an equal
opportunity to obtain capacity in the open season.
Further, Magellan has entered
into letters of intent with Anadarko and Saddle Butte Pipeline II, LLC for
potential equity ownership in Saddlehorn Pipeline.
“Magellan is pleased to move
forward with the Saddlehorn Pipeline, supported by binding commitments from two
of the largest producers in the Niobrara play,” said Michael Mears, chief
executive officer. “With Magellan’s existing right-of-way, significant Cushing
storage position and independent service provider business model, we believe
the Saddlehorn Pipeline is the most efficient, timely and attractive pipeline
project to transport increasing Niobrara crude oil production to the strategic
Cushing hub.”
The Saddlehorn Pipeline includes
construction of an approximate 600-mile, 20-inch diameter pipeline capable of
transporting up to 400,000 barrels per day of crude oil from Platteville,
Colorado to Magellan’s storage facilities in Cushing. Subject to receipt of any
necessary permits and regulatory approvals, the Saddlehorn Pipeline is expected
to be operational during the second quarter of 2016.
The project scope, cost and
ownership structure of the Saddlehorn Pipeline will be finalized after the open
season closes and the total committed volumes are known.
For customer inquiries about
the open season, please contact Chris Nalley at (918) 574-7710 or chris.nalley@magellanlp.com. More
information about the open season is available at www.magellanlp.com/tariffs.aspx.
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 more than 90 million barrels of
petroleum products such as gasoline, diesel fuel and crude oil. More
information is available at www.magellanlp.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. believes 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 the partnership’s results of operations and
financial condition are: (1) the ability to obtain all required rights-of-way, permits
and other governmental approvals on a timely basis; (2) the ability to complete
construction of the project on time and at expected costs once the necessary
engineering and commercial assessments are complete; (3) price fluctuations and
overall demand for crude oil; (4) changes in Saddlehorn Pipeline’s tariff rates
or other terms imposed by state or federal regulatory agencies; (5) the
occurrence of an operational hazard or unforeseen interruption; (6) disruption
in the debt and equity markets that negatively impacts the partnership’s ability
to finance capital spending and (7) 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 partnership undertakes
no obligation to revise these forward-looking statements to reflect events or
circumstances occurring after today's date.
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