US energy asset and terminal operator Magellan Midstream Partners has reported record annual operating profits following expansion projects.
Magellan spent $266 million (207 million) during 2008 on growth projects, $65 million of which was spent in Q4.
Based on the progress of expansion projects already underway, including the addition of new projects, the partnership has increased its growth spending estimates to approximately $215 million during 2009, with spending of $30 million in 2010 required to complete these projects.
The estimates include about $27 million to construct 700,000 barrels of crude oil storage at its East Houston, Texas, marine terminal.
In addition, the partnership continues to analyse more than $500 million of potential growth projects in earlier stages of development, which have been excluded from these spending estimates.
The companys Q4 2008 operating profit of $100.6 million represented a 19% increase compared to $84.8 million for Q4 2007. For the year ended 31 December, 2008, operating profit grew 33% to $399.5 million from $300.3 million in the comparable 2007 period.
Net income grew to $85.6 million during Q4 2008, which is a 19% increase over the $72.2 million reported for Q4 2007. For the year ended 31 December 2008, net income grew 43% to $346.6 million from $242.8 million in the corresponding 2007 timeframe.
Record results for the full year 2008 resulted from expansion projects, rate increases, higher commodity margins and the gain on assignment of a third-party supply agreement, all of which helped overcome poor economic conditions, unprecedented swings in commodity prices and natural disasters that affected Magellan during the year, Don Wellendorf, Magellan Midstream Partners CEO, comments.