Log in or Register for enhanced features | Forgotten Password?
White Papers | Suppliers | Events | Report Store | Companies | Dining Club | Videos

Oil & Gas
Transportation & Storage
Return to: EBR Home | Oil & Gas | Transportation & Storage

Magellan, Valero to undertake $755m pipeline system expansion in Texas

EBR Staff Writer Published 07 September 2017

Subsidiaries of Magellan Midstream Partners and Valero Energy will jointly undertake construction of a 217km-long refined petroleum products pipeline along with other infrastructure enhancements in Texas with an investment of $755m.

In this regard, Valero’s subsidiary V-Tex Logistics and Magellan’s subsidiary Magellan Pipeline Company have inked an agreement to build a 16-inch pipeline from Houston to Hearne.

The project will essentially be an expansion of Magellan’s existing refined petroleum products pipeline system in the American state and is already backed by long-term customer commitments.

According to Magellan, the expansion project along with other enhancements to its existing pipeline and terminal infrastructure will meet the growing demand for gasoline, diesel fuel and jet fuel in central and north Texas markets.

Magellan CEO Michael Mears said: “Demand for refined petroleum products remains strong along Magellan’s extensive pipeline system.

“Magellan is pleased to meet the industry’s need for pipeline capacity serving the Dallas market and other important demand centers along our refined products pipeline system with an attractive investment supported by long-term commitments from well-known, strong creditworthy customers.”

While Magellan will spend about $375m on the project, Valero will invest $380m as part of its share.

Magellan will own the new pipeline which would enable it to transport additional refined petroleum product north to Temple, Dallas and Waco and to Little Rock, Arkansas among other Midcontinent markets.

Magellan also intends to reverse an existing pipeline to connect to the new pipeline segment. The reversing of the pipeline would help the company with an additional 85,000 barrels per day of refined products capacity from Houston, marking an increase of about 50%.

As per the agreement, Valero will separately construct terminals in Hearne and in Williamson County which will be connected with a new 12in pipeline of 112kms length.

Valero chairman, president and CEO Joe Gorder said: “These projects support our long-term strategy of expanding and extending our supply chain through organic growth projects.

“We are very pleased to participate in the Magellan South Pipeline Expansion project. Valero and Magellan have had a long and successful working relationship and the Houston to Hearne pipeline project will build on that history.”

The projects are expected to be completed in mid-2019 with an aim to provide reliable fuel supply alternative for the rapidly-growing Central Texas market.