TULSA, Okla., March 21, 2017 /PRNewswire/ -- Magellan
Midstream Partners, L.P. (NYSE: MMP) announced today that it has
entered into a new fee-based, take-or-pay agreement with Trafigura
Trading LLC for the exclusive use of Magellan's condensate splitter
in Corpus Christi, Texas. Magellan
recently completed construction of the splitter, which is capable
of processing 50,000 barrels per day of condensate and is fully
supported by the long-term commitment from Trafigura. Based on the
new agreement, Magellan expects to begin commercial operation of
the splitter during late second quarter 2017.
In conjunction with the new agreement, Magellan will build an
additional 300,000 barrels of storage (for a total of 1.5 million
barrels of storage to support the condensate splitter) and make
other minor modifications to the splitter, increasing the expected
capital spending for the project to $330
million from the prior estimate of $300 million. Based on the new spending estimates
for the splitter, Magellan expects to generate a 7 times EBITDA
multiple on its investment.
The new agreement was entered into as part of an amicable
resolution of the dispute between the parties under the previous
contract. Magellan has dismissed its lawsuit against Trafigura as
part of such resolution.
Further, Magellan reaffirms its annual distributable cash flow
(DCF) guidance of $1.0 billion for
2017. Although the partnership's initial 2017 guidance
conservatively assumed no revenue generated from the splitter,
commodity margins have recently contracted, resulting in
management's reaffirmed guidance of $1.0
billion DCF for full-year 2017. Management also remains
committed to its goal of increasing annual cash distributions by 8%
in both 2017 and 2018, which would result in an expected
distribution coverage of 1.2 times the amount needed to pay cash
distributions each year.
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. The partnership 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.
Forward-Looking Statement Disclaimer
Portions of this document constitute forward-looking
statements as defined by federal law. Forward-looking statements
can be identified by words such as: plan, goal, believe, estimate,
expect, projected, future, may, will and similar references to
future periods. Although management of Magellan Midstream Partners,
L.P. believes any such statements are based on reasonable
assumptions, actual outcomes may be materially different. Among the
key risk factors that may have a direct impact on the partnership's
results of operations and financial condition are: (1) its ability
to identify growth projects and to complete identified projects on
time and at expected costs; (2) price fluctuations and changes in
demand for refined petroleum products, crude oil and natural gas
liquids, or changes in demand for transportation, storage, blending
or processing of those commodities through its existing or planned
facilities; (3) changes in the partnership's tariff rates or other
terms imposed by state or federal regulatory agencies; (4)
shut-downs or cutbacks at refineries or other businesses that use
or supply the partnership's services; (5) changes in the throughput
or interruption in service on pipelines or other facilities owned
and operated by third parties and connected to the partnership's
terminals, pipelines or other facilities; (6) the occurrence of
operational hazards or unforeseen interruptions; (7) the treatment
of the partnership as a corporation for federal or state income tax
purposes or the partnership becoming subject to significant forms
of other taxation; (8) an increase in the competition the
partnership's operations encounter; (9) disruption in the debt and
equity markets that negatively impacts the partnership's ability to
finance its capital spending and (10) failure of customers to meet
or continue contractual obligations to the partnership. Additional
information about issues that could lead to material changes in
performance is contained in the partnership's filings with the
Securities and Exchange Commission, including the partnership's
Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2016. Forward-looking statements made by
the partnership in this release are based only on information
currently known, and the partnership undertakes no obligation to
revise its forward-looking statements to reflect events or
circumstances learned of or occurring after today's date.
Contact:
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Investors:
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Media:
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Paula
Farrell
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Bruce
Heine
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(918)
574-7650
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(918)
574-7010
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paula.farrell@magellanlp.com
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bruce.heine@magellanlp.com
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SOURCE Magellan Midstream Partners, L.P.