TULSA, Okla. and SAN ANTONIO, Sept. 14,
2017 /PRNewswire/ -- Magellan Midstream Partners, L.P.
(NYSE: MMP) (Magellan) and Valero Energy Corporation (NYSE: VLO)
(Valero) announced today the expansion and joint development of the
marine storage facility currently under construction along the
Houston Ship Channel in Pasadena,
Texas. The Pasadena
facility, which will handle petroleum products, including multiple
grades of gasoline, diesel and jet fuel, and renewable fuels, will
be owned by a limited liability company that is owned 50/50 by
Magellan and Valero and will initially include 5 million barrels of
storage, truck loading facilities and 2 proprietary ship docks.
As previously announced in July
2016, phase 1 of this facility is already under
construction, which includes approximately 1 million barrels of
storage and a new marine dock capable of handling Panamax-sized
ships or barges with up to a 40-foot draft. This first phase will
now be owned by the jointly-owned company.
Further, this facility will be expanded by an incremental 4
million barrels of storage, a 3-bay truck rack and a second marine
dock capable of handling Aframax-sized vessels with up to a 45-foot
draft (phase 2). After completion of this expansion, the
Pasadena facility will be
connected via pipeline to Valero's refineries in Houston and Texas
City, Texas and the Colonial and Explorer pipelines in
addition to the already planned connection to Magellan's
Galena Park terminal facility.
Combined, phases 1 and 2 of the Pasadena marine terminal are currently
estimated to cost approximately $820
million, which will be funded equally by capital
contributions from Magellan and Valero. With the new arrangement,
Magellan's incremental capital spending will be approximately
$75 million more than its previous
spending estimates of $335 million
for phase 1 alone. Both phases are fully contracted with long-term
customer commitments.
Magellan currently serves as construction manager and will serve
as operator once construction is complete. Phase 1 of the new
terminal is expected to be operational in early 2019, with phase 2
expected to come on-line in early 2020, subject to receipt of
necessary permits and regulatory approvals.
"Magellan is pleased to join forces with Valero to combine our
extensive pipeline and terminals capabilities with their
world-renowned refining and marketing expertise to further expand
the state-of-the-art marine facility being constructed in
Pasadena," said Michael Mears, Magellan's chairman, president
and chief executive officer. "Demand for refined products from the
Gulf Coast continues to grow, and together, we are well-positioned
to continue expanding our marine capabilities to meet this demand
from both domestic and international markets."
"Valero is excited about this opportunity to work with an
exceptional organization like Magellan to jointly develop this
flexible and well-positioned terminal," said Joe Gorder, Valero's chairman, president and
chief executive officer. "This project provides another example of
our commitment to growing our portfolio of logistics capabilities
to support our long-term strategy of expanding and extending our
supply chain."
If warranted by additional demand, the new Pasadena facility could be expanded to include
an incremental 5 million barrels of storage, another 3 docks and
expanded truck loading capacity, for a maximum footprint of up to
10 million barrels of total storage and up to 5 docks. All future
expansions are expected to be owned by the jointly-owned
company.
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. Magellan 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 approximately 100 million barrels of petroleum products such
as gasoline, diesel fuel and crude oil. More information is
available at www.magellanlp.com.
About Valero
Valero Energy Corporation, through its
subsidiaries, is an international manufacturer and marketer of
transportation fuels and other petrochemical products. Valero, a
Fortune 50 company based in San Antonio,
Texas, with approximately 10,000 employees, is an
independent petroleum refiner and ethanol producer, and its assets
include 15 petroleum refineries with a combined throughput
capacity of approximately 3.1 million barrels per day and
11 ethanol plants with a combined production capacity of
1.4 billion gallons per year. The petroleum refineries are
located in the United States
(U.S.), Canada and the
United Kingdom (U.K.), and the
ethanol plants are located in the Mid-Continent region of the U.S.
In addition, Valero owns the 2 percent general partner interest and
a majority limited partner interest in Valero Energy Partners LP, a
midstream master limited partnership. Valero sells its products in
both the wholesale rack and bulk markets, and approximately
7,400 outlets carry Valero's brand names in the U.S.,
Canada, the U.K. and
Ireland. Please visit www.valero.com for more
information.
Portions of this document constitute forward-looking
statements as defined by federal law. Although management of
Magellan Midstream Partners, L.P. and Valero Energy Corporation
(the "companies") believe any such statements are based on
reasonable assumptions, there is no assurance that actual outcomes
will not be materially different. Among the key risk factors
associated with the project that may have a direct impact on the
companies' results of operations and financial condition are: (1)
the ability to obtain required rights-of-way, permits and other
approvals on a timely basis; (2) the ability to complete
construction of the projects on time and at expected costs; (3)
price fluctuations and overall demand for refined petroleum
products; (4) the occurrence of an operational hazard or unforeseen
interruption; (5) disruption in the debt and equity markets that
negatively impacts the companies' abilities to finance capital
spending and (6) willingness to incur or failure of customers or
vendors to meet or continue contractual obligations. Additional
information about issues that could lead to material changes in
performance is contained in filings with the Securities and
Exchange Commission for both companies. You are urged to carefully
review and consider the cautionary statements and other disclosures
made in those filings, especially under the heading "Risk Factors."
The companies undertake no obligation to revise these
forward-looking statements to reflect events or circumstances
occurring after today's date.
Contacts:
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Magellan:
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Paula Farrell,
Investor Relations (918) 574-7650,
paula.farrell@magellanlp.com
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Bruce Heine, Media
Relations (918) 574-7010, bruce.heine@magellanlp.com
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Valero:
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John Locke, Investor
Relations (210) 345-3077, john.locke@valero.com
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Lillian Riojas, Media
Relations (210) 345-5002, lillian.riojas@valero.com
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SOURCE Magellan Midstream Partners, L.P.; Valero Energy
Corporation