Magellan Midstream Partners, L.P. (NYSE: MMP), Enterprise
Products Partners L.P. (NYSE: EPD) and Intercontinental Exchange,
Inc. (NYSE: ICE) today announced the establishment of a new futures
contract for the physical delivery of crude oil in the Houston
area. The Midland WTI American Gulf Coast contract (ICE: HOU) is
being launched in response to market interest for a Houston-based
index with greater scale, flow assurance and price transparency. It
will utilize the capabilities and global reach of ICE’s
industry-recognized, state-of-the-art trading platform and is due
to be launched by ICE by early 2022, subject to regulatory
approval.
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The quality specifications of the new futures contract will be
consistent with a West Texas Intermediate (“WTI”) crude oil
originating from the Permian Basin with common delivery options at
either the Magellan East Houston (“MEH”) terminal or the Enterprise
Crude Houston (“ECHO”) terminal. In support of this new futures
contract, Magellan and Enterprise anticipate discontinuing their
existing provisions for delivery services under the current futures
contracts deliverable at each terminal once the new contract
receives regulatory approval and is finalized.
“Magellan is pleased to join forces with Enterprise and ICE to
offer this leading-edge joint futures contract,” said Aaron
Milford, Magellan’s chief operating officer. “The new contract
improves the transparency, flexibility and marketability of Midland
WTI crude oil for Gulf Coast and export customers while maintaining
industry-recognized quality and consistency.”
Harold Hamm, Chairman of the Board of Continental Resources and
Founding Member of the American Gulf Coast Select Best Practices
Task Force Association said, “On April 20th last year, when the
Cushing, Oklahoma WTI contract traded down to negative $38 it was a
wake-up call to the oil industry that the storage constraints and
landlocked location of the Cushing contract could no longer be
ignored. I started the American Gulf Coast Select Best Practices
Task Force to develop specifications for a new U.S. light sweet
crude oil price benchmark in the American Gulf Coast, and to
advocate for its implementation and adoption as the main pricing
point for the U.S. oil markets. We think a futures contract in the
most interconnected market center in the country, with a widely
accepted quality spec, which settles with guaranteed delivery of
crude oil is an important new alternative for the industry. The
task force has worked tirelessly to create a marker with
transparency and liquidity that is waterborne for this modern era.
The Midland WTI American Gulf Coast futures contract established by
the alliance between ICE, Magellan and Enterprise is a huge step
forward for the industry and goes a long way to accomplishing the
mission on which the task force has been working.”
A.J. “Jim” Teague, co-chief executive officer of Enterprise’s
general partner, and Michael Mears, Magellan’s chief executive
officer, said, “We are grateful for Harold’s continued leadership
on behalf of the industry and being a champion of this very
important step for the industry.”
Brent Secrest, executive vice president and chief commercial
officer of Enterprise’s general partner said, “We are excited about
this new crude oil futures contract, which features the combined
strength of two extensive and complementary networks of midstream
assets with a world-class trading platform to provide customers
with greater supply reliability, flexibility and price
transparency. As the market hub for Permian Basin production,
Houston represents the most logical choice for a new futures
contract. Between Magellan and Enterprise, we offer access to
virtually all of the export capacity in the Houston region,
redundant connectivity to all area refineries, a robust Gulf Coast
storage position and interconnects to all of the relevant supply
pipelines, including those owned by third parties.”
Jeff Barbuto, Global Head of Oil Markets at ICE stated,
“Combining efforts with Magellan and Enterprise to establish a
benchmark for pricing Midland quality WTI on the Gulf Coast allows
ICE to offer the industry a futures contract with over 4 million
barrels per day of supply capacity from Midland into Houston,
access to both domestic and foreign demand, and nearly 60 million
barrels of storage capacity in the Magellan and Enterprise systems.
Traded on the same global platform as ICE Brent, Murban and Platts
Dubai Crude Oil futures contracts, the new Midland WTI American
Gulf Coast contract can also offer significant capital efficiencies
to the industry and provide industry-leading quality that buyers
have grown accustomed to in the Houston market.”
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 more than 100 million barrels of petroleum
products such as gasoline, diesel fuel and crude oil. More
information is available at www.magellanlp.com.
Enterprise Products Partners L.P. is one of the largest publicly
traded partnerships and a leading North American provider of
midstream energy services to producers and consumers of natural
gas, NGLs, crude oil, refined products and petrochemicals. Our
services include: natural gas gathering, treating, processing,
transportation and storage; NGL transportation, fractionation,
storage and export and import terminals; crude oil gathering,
transportation, storage and export and import terminals;
petrochemical and refined products transportation, storage, export
and import terminals and related services; and a marine
transportation business that operates primarily on the United
States inland and Intracoastal Waterway systems. The partnership’s
assets include approximately 50,000 miles of pipelines; 260 million
barrels of storage capacity for NGLs, crude oil, refined products
and petrochemicals; and 14 Bcf of natural gas storage capacity.
Please visit www.enterpriseproducts.com for more information.
Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500
company that designs, builds and operates digital networks to
connect people to opportunity. We provide financial technology and
data services across major asset classes that offer our customers
access to mission-critical workflow tools that increase
transparency and operational efficiencies. We operate exchanges,
including the New York Stock Exchange, and clearing houses that
help people invest, raise capital and manage risk across multiple
asset classes. Our comprehensive fixed income data services and
execution capabilities provide information, analytics and platforms
that help our customers capitalize on opportunities and operate
more efficiently. At ICE Mortgage Technology, we are transforming
and digitizing the U.S. residential mortgage process, from consumer
engagement through loan registration. Together, we transform,
streamline and automate industries to connect our customers to
opportunity.
Trademarks of ICE and/or its affiliates include Intercontinental
Exchange, ICE, ICE block design, NYSE and New York Stock Exchange.
Information regarding additional trademarks and intellectual
property rights of Intercontinental Exchange, Inc. and/or its
affiliates is located here. Key Information Documents for certain
products covered by the EU Packaged Retail and Insurance-based
Investment Products Regulation can be accessed on the relevant
exchange website under the heading “Key Information Documents
(KIDS).”
This press release includes “forward-looking statements” as
defined by the Securities and Exchange Commission. All statements,
other than statements of historical fact, included herein that
address activities, events, developments or transactions that
Enterprise and its general partner, as well as Magellan and ICE
expect, believe or anticipate will or may occur in the future are
forward-looking statements. These forward-looking statements are
subject to risks and uncertainties that may cause actual results to
differ materially from expectations, including required approvals
by regulatory agencies, the possibility that the anticipated
benefits from such activities, events, developments or transactions
cannot be fully realized, the possibility that costs or
difficulties related thereto will be greater than expected, the
impact of competition, and other risk factors included in
Enterprise’s, Magellan’s and ICE’s reports filed with the
Securities and Exchange Commission. Readers are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of their dates. Except as required by law,
Enterprise, Magellan and ICE do not intend to update or revise
their respective forward-looking statements, whether as a result of
new information, future events or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20210621005190/en/
Magellan Contacts Paula Farrell,
Investor Relations (918) 574-7650, paula.farrell@magellanlp.com
Bruce Heine, Media Relations (918) 574-7010,
bruce.heine@magellanlp.com Enterprise
Contacts Randy Burkhalter, Investor Relations, (713)
381-6812 or (866) 230-0745, rburkhalter@eprod.com Rick Rainey,
Media Relations (713) 381-3635, rrainey@eprod.com ICE Contacts Mary Caroline O’Neal, Investor
Relations, (770) 738-2151, marycaroline.oneal@ice.com Rebecca
Mitchell, Media Relations, +44 7951 057 351,
rebecca.mitchell@ice.com
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