Magellan Midstream Partners will expand its refined petroleum products pipeline in Texas to meet growing demand for product transportation.
The company plans to spend $375 million on the project, which involves the construction of a 135-mile, 16-inch pipeline from its terminal in East Houston to Hearne, Texas.
It is due to be completed mid-2019.
Magellan will own the pipelines via an undivided joint interest agreement with Valero Energy. 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.
The company also plans to reverse an existing pipeline which will connect to the new pipeline segment, providing an incremental 85,000 barrels per day of refined product from the Houston area.
Additionally, Magellan will make a number of enhancements to its existing pipeline and terminal infrastructure, including construction of one million barrels of refined products storage on a combined basis at its facilities in Dallas, East Houston and Hearne. It will also construct additional connections to third-party refineries, pipelines and terminals within the Houston Gulf Coast region, including its new Pasadena, Texas terminal.
Michael Mears, CEO, says: 'Demand for refined petroleum products remains strong along Magellan's extensive pipeline system. Magellan is pleased to meet the industry's need for pipeline capacity serving the Dallas market and other important demand centres along our refined products pipelines system with an attractive investment supported by long-term commitments from well-known, strong creditworthy customers.'