Valero Energy Corporation (NYSE:VLO) (“Valero”) and Magellan
Midstream Partners, L.P. (NYSE:MMP) (“Magellan”) 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
Terminaling and Distribution Company, a wholly owned subsidiary of
Valero (“VTDC”), and will initially include five million barrels of
storage, truck loading facilities, and two proprietary ship
docks.
As Magellan previously announced in July 2016,
phase 1 of this facility, which is already under construction,
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 four million barrels of storage, a three-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 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. 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 online in early 2020,
subject to receipt of necessary permits and regulatory
approvals.
“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 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.”
“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.”
If warranted by additional demand, the new
Pasadena facility could be expanded to include an incremental five
million barrels of storage, another three docks, and expanded truck
loading capacity for a maximum footprint of up to 10 million
barrels of total storage and up to five docks. All future
expansions are expected to be owned by the jointly-owned
company.
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.
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.
Safe-Harbor Statement
Statements contained in this release that state
the company’s or management’s expectations or predictions of the
future are forward-looking statements intended to be covered by the
safe harbor provisions of the Securities Act of 1933 and the
Securities Exchange Act of 1934. The words “believe,”
“expect,” “should,” “estimates,” “intend,” “targeting,” and other
similar expressions identify forward-looking statements. It
is important to note that actual results could differ materially
from those projected in such forward-looking statements based on
numerous factors, including those outside of the company’s control,
such as delays in construction timing and other factors. For
more information concerning factors that could cause actual results
to differ from those expressed or forecasted, see Valero’s annual
reports on Form 10-K, quarterly reports on Form 10-Q and our other
reports filed with the SEC and on Valero’s website at
www.valero.com, and VLP’s annual reports on Form 10-K and quarterly
reports on Form 10-Q filed with the SEC and on VLP’s website at
www.valeroenergypartners.com.
Contacts
Valero:
John Locke, Investor Relations (210) 345-3077,
john.locke@valero.com
Lillian Riojas, Media Relations (210) 345-5002,
lillian.riojas@valero.com
Magellan:
Paula Farrell, Investor Relations (918)
574-7650, paula.farrell@magellanlp.com
Bruce Heine, Media Relations (918) 574-7010,
bruce.heine@magellanlp.com
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