Magellan remains focused on expansion opportunities as it reports an increase in its third quarter financials.
The company reports a net income of $198.5 million compared to $194.6 million in the third quarter of 2016. During this quarter the company’s operations in Houston and Corpus Christi were disrupted due to Hurricane Harvey. No significant asset damage occurred and the impacted facilities are now operational.
Michael Mears, CEO, says: ‘Magellan generated financial results during the third quarter of 2017 that were consistent with our expectations despite Hurricane Harvey, which negatively impacted the operations of each of our business segments for a period of time.
‘Further, the third quarter of 2017 was also notable because we launched three new large-scale construction projects for fee-based refined products and crude oil pipeline and storage assets that increased our expansion capital spending by $600 million, helping to solidify Magellan’s future growth.’
Based on the progress of expansion projects already underway, the company expected to spend $600 million in 2017, $800 million in 2018 and $350 in 2019.
These estimates includes its projects to expand its Pasadena, Texas marine storage terminal, to build a crude oil and condensate pipeline from the Delaware Basin to the origin of the Longhorn pipeline in Crane, Texas and to expand its refined products pipeline system in Texas.
The estimates also include the construction of an incremental 1.5 million barrels of crude oil storage in Cushing, Oklahoma and Corpus Christi on a combined basis, which is supported by customer commitments.
The company also continued to evaluate in excess of $500 million of potential organic growth projects as well as acquisition opportunities.