US-based energy asset operator Magellan Midstream Partners has experienced operating profit from the partnership's core fee-based transportation and terminals activities increased $11.2 million (7.58 million), or 25%, in the 2009 period.
Third-quarter 2009 operating profit was $74.8 million compared to $83.4 million for third quarter 2008. The 2008 period benefited from unusually high product margin (defined as product sales revenues less product purchases).
Magellan continues to benefit from higher results from our core transportation and terminals assets even during the current challenging economic environment, Don Wellendorf, CEO, comments.
Record quarterly gasoline shipments and record results from our terminals segment, driven in part from expansion projects, have helped to offset the negative impact of lower commodity prices and lower diesel fuel shipments this year.
Transportation and terminals revenues increased between periods primarily due to higher leased storage and more additive and ethanol blending fees. Lower average transportation rates resulting from shippers building inventory in the partnership's pipeline system during third quarter 2009 were offset by 2% higher transportation volumes.
Terminals operating margin was $27.7 million, an increase of $0.6 million and a quarterly record for this segment. Excluding product margin, all other operating margin from this segment was $25.4 million, an increase of $5.3 million.
The current period benefited from higher revenues at the partnership's marine and inland terminals primarily due to expansion projects, including additional marine storage and ethanol blending, higher marine storage rates and increased inland volumes.
New projects include the construction of 0.6 million barrels of storage at the partnership's Galena Park, Texas marine terminal and the October 2009 acquisition of a terminal in Marrero, Louisiana, which will be consolidated with the partnership's adjacent marine facility and will provide more space for future growth.