US-based energy asset owner and operator Magellan Midstream Partners 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 800,000 barrels will be jointly owned with a third party.
Magellan will also 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 (49.9 million).
The partnership has also 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 a day of refined petroleum products under a 12.5-year take-or-pay agreement to El Paso, Texas beginning in late Q3 or early Q4 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.
