HOUSTON May 23 Magellan Midstream Partners LP
may build a pipeline extension connecting its network to
its terminals in central Arkansas, where the imminent shutdown
of a separate distillate pipeline has raised serious concerns
about supply in the state.
Magellan said on Thursday that the company was "exploring
the feasibility" of building a new pipeline to connect its
network to its terminals in Little Rock, Arkansas, to move up to
75,000 barrels per day of refined products into the area.
Magellan's announcement comes five weeks before Enterprise
Products Partners plans to shut down its 230,000 bpd TE
Products distillate pipeline that runs through Little Rock. The
line, which carries ultra-low sulfur diesel and jet fuel from
Texas through Indiana, will be converted to move ethane from
Pennsylvania to Texas to feed petrochemical demand.
Enterprise says flows on the line are too low to justify
spending $50 million to modify a parallel gasoline and natural
gas liquids pipeline to also carry distillates.
But the Arkansas Attorney General's office is challenging
the shutdown, saying it will have a "significant, damaging
effect" on business in the state. Other challengers include
airlines that operate at Clinton Airport in Little Rock, and the
Arkansas Oil Marketers Association.
Magellan did not specify whether the new pipeline would
carry distillates, or whether the company was considering the
project in response to the pending TE Products line shutdown.
However, the company noted that its terminals in Little Rock
are currently supplied by a third-party pipeline, and that the
expansion of its system to include a new line would give
customers "the flexibility to adapt to changing market
conditions" in Little Rock.