Seabrook Logistics, a joint venture company formed by Magellan Midstream Partners and LBC Tank Terminals, has been created to own crude oil storage in Texas.
The new 50/50 joint company will own and operate crude oil storage and pipeline infrastructure in the Houston Gulf Coast area.
A new 700,000 barrel crude oil storage and distribution infrastructure located next to LBC’s existing terminal in Seabrook, Texas will be constructed.
Additionally, the new company will construct and own a new 18-inch diameter pipeline, which will connect the new storage to an existing third party pipeline that will transport crude oil to a Houston-area refinery.
An agreement has been reached to allow the company to utilise LBC’s dock suitable for industry standard Aframax vessels with up to a 45-foot draft and two barge docks, which will provide marine access with flexible loading and unloading services at the Seabrook facility.
Estimated project costs are around $95 million (€85 million). Magellan will be responsible for constructing, maintaining and operating the new pipeline and LBC will be responsible for constructing, maintaining and operating the new storage tanks and other terminal assets.
The new facility and associated infrastructure are expected to be operational in the first quarter of 2017.
Michael Mears, president and CEO says: ‘We also see growth opportunities at this new facility through the potential connection and integration of this terminal into Magellan’s Houston crude oil and refined products pipeline systems.’
Walter Wattenbergh LBC’s CEO adds: ‘This expansion of our Houston area terminal is an important step in LBC’s growth strategy. We look forward to executing this project as part of our expansion plans in the crude and refined products markets in the US.’