Oil and Gas

Magellan weighs adding West Texas origin to Cushing-to-Houston pipeline

March 29 (Reuters) - Magellan Midstream Partners LP will evaluate adding a new origin point near Midland, Texas, as it extends an open season of its proposed Voyager crude pipeline from the Cushing, Oklahoma storage hub to Houston, the company said on Friday.

* The extension adds two months to the Voyager pipeline’s open season, which could draw shippers to a system with an initial capacity of at least 300,000 barrels per day (bpd)

* The pipeline, up to 24 inches (61 cm) in diameter, would run 500 miles (805 km) from its Cushing terminal to its East Houston terminal and is expected to come into service in late 2020

* At shippers’ requests, the Houston pipeline operator will evaluate adding a Midland origin point “to provide further supply flexibility” from the Permian Basin of West Texas and New Mexico

* Magellan has an existing pipeline near Midland that may be idled “in the near future” and utilize an existing terminal in Frost, Texas, to connect to the pipeline segment that runs from Cushing to Houston

* The announcement comes the same week that Magellan said the Permian Gulf Pipeline was unlikely to proceed as it was proposed, and cut its capital spending outlook by $450 million over two years as it exited the joint venture project (Reporting by Collin Eaton in Houston Editing by Marguerita Choy)