31-03-2014

Magellan Midstream to construct fee-based condensate splitter

Magellan Midstream Partners, L.P. 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.