Magellan Midstream to Construct Fee-Based Condensate Splitter, Fully Supported
by Trafigura AG
TULSA, Okla., March 31, 2014
TULSA, Okla., March 31, 2014 /PRNewswire/ -- Magellan Midstream Partners, L.P.
(NYSE: MMP) announced today that it plans to construct a condensate splitter
at its terminal in Corpus Christi, Texas under a fee-based, take-or-pay
agreement with Trafigura AG. The project also includes construction of more
than one million barrels of storage, dock improvements and two additional
truck rack bays at Magellan's terminal as well as pipeline connectivity
between Magellan's terminal and Trafigura AG's nearby facility.
The splitter will be capable of processing 50,000 barrels per day (bpd) of
condensate, fully supported by a long-term commitment from Trafigura AG. If
warranted by additional demand, Magellan could construct an additional 50,000
bpd splitter at this facility.
"This condensate splitter is a strategic expansion of Magellan's service
offerings, and we are pleased to work with Trafigura AG to provide an industry
solution for increased domestic condensate production while delivering an
attractive fee-based return for our investors," said Michael Mears, Magellan's
president and chief executive officer. "Our Corpus Christi terminal is ideally
situated to receive condensate from the Eagle Ford shale, including shipments
via our Double Eagle pipeline joint venture, and to offer flexible services
and a variety of market options for our customer."
"This agreement will provide another outlet for producers of domestic crude
and condensate. We believe Corpus Christi is advantaged over other locations
and these investments, along with our other assets in the area, are critical
to providing long-term solutions for the producers," said Jeff Kopp, Trafigura
AG's director of North America oil trading.
Magellan expects the condensate splitter and related infrastructure to cost
approximately $250 million and to be operational during the second half of
2016, subject to receipt of necessary permits and authorizations.
About Magellan Midstream Partners, L.P.
Magellan Midstream Partners, L.P. (NYSE: MMP) is a publicly traded partnership
that primarily transports, stores and distributes refined petroleum products
and crude oil. The partnership owns the longest refined petroleum products
pipeline system in the country, with access to nearly 50% of the nation's
refining capacity, and can store more than 90 million barrels of petroleum
products such as gasoline, diesel fuel and crude oil. More information is
available at www.magellanlp.com.
About Trafigura AG
Trafigura AG is a wholly owned subsidiary of Trafigura Beheer BV
("Trafigura"). Trafigura is one of the world's leading international commodity
traders, specializing in the oil, minerals and metals markets, with operations
in 58 countries. Trafigura's primary trading businesses are the supply and
transport of crude oil, petroleum products, renewable energies, coal, refined
metals, ferrous and non-ferrous ores and concentrates. It is the world's
second largest privately owned non-ferrous and oil trading company. Founded in
1993, the company is owned by its founding shareholders and senior management.
More information is available at www.trafigura.com.
Portions of this document constitute forward-looking statements as defined by
federal law. Although management believes any such statements are based on
reasonable assumptions, actual outcomes may be materially different. Among the
key risk factors associated with the project that may have a direct impact on
the partnership's results of operations and financial condition are: (1) the
ability to obtain all required permits and regulatory approvals on time; (2)
the ability to complete construction of the project on time and at expected
costs; (3) price fluctuations and overall demand for condensate; (4) changes
in terms imposed by state or federal regulatory agencies; (5) the occurrence
of operational hazards or unforeseen interruptions; (6) disruption in the debt
and equity markets that negatively impact the partnership's ability to finance
capital spending and (7) failure of customers or vendors to meet or continue
contractual obligations. Additional information about issues that could lead
to material changes in Magellan Midstream Partners, L.P.'s performance is
contained in the partnership's filings with the Securities and Exchange
Commission. Magellan Midstream Partners, L.P. undertakes no obligation to
revise these forward-looking statements to reflect events or circumstances
occurring after today's date.
Contact: Investors: Media:
Paula Farrell Bruce Heine
(918) 574-7650 (918) 574-7010
SOURCE Magellan Midstream Partners, L.P.
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