Mag­el­lan part­ners in $820 mil­lion Hous­ton Ship Chan­nel project

The Oklahoman - - ENERGY - BY MIKE AVER­ILL Tulsa World

Tulsa-based Mag­el­lan Mid­stream an­nounced Thurs­day a part­ner­ship with Valero En­ergy Corp. to ex­pand the size and scope of a ma­rine stor­age fa­cil­ity un­der con­struc­tion along the Hous­ton Ship Chan­nel in Pasadena, Texas.

The fuel stor­age fa­cil­ity will be owned by a lim­ited li­a­bil­ity com­pany owned equally by Mag­el­lan and Valero and will ini­tially in­clude 5 mil­lion bar­rels of stor­age, truck load­ing fa­cil­i­ties and two pro­pri­etary ship docks.

“Mag­el­lan is pleased to join forces with Valero to com­bine our ex­ten­sive pipe­line and ter­mi­nals ca­pa­bil­i­ties with their worl­drenowned re­fin­ing and mar­ket­ing ex­per­tise to fur­ther ex­pand the state-of-the-art ma­rine fa­cil­ity be­ing con­structed in Pasadena,” Mag­el­lan CEO Michael Mears said in a state­ment.

“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.”

Mag­el­lan an­nounced its orig­i­nal plans in July 2016 for a $335 mil­lion project to con­struct 1 mil­lion bar­rels of stor­age and a ma­rine dock. That project, cur­rently un­der con­struc­tion, is now Phase 1 and will be jointly owned by the new com­pany.

The ex­pan­sion will in­clude an in­cre­men­tal 4 mil­lion bar­rels of stor­age, a three-bay truck track and a sec­ond ma­rine dock.

Once the ex­pan­sion is com­plete, the Pasadena fa­cil­ity will be con­nected via pipe­line to Valero’s re­finer­ies in Hous­ton and Texas City and the Colo­nial and Ex­plorer pipelines in ad­di­tion to the al­ready planned con­nec­tion to Mag­el­lan’s Galena Park ter­mi­nal fa­cil­ity.

The project, es­ti­mated to cost nearly $820 mil­lion, will be funded equally by both com­pa­nies. Phase 1 is ex­pected to be op­er­a­tional in early 2019, with Phase 2 ex­pected to come on­line in early 2020.

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