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United States

Profile: Magellan Midstream Partners LP (MMP)

MMP on New York Consolidated

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17 Nov 2017
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Magellan Midstream Partners, L.P., incorporated on August 30, 2000, is principally engaged in the transportation, storage and distribution of refined petroleum products and crude oil. The Company operates through three segments: refined products, crude oil and marine storage. As of December 31, 2016, its asset portfolio, including the assets of its joint ventures, consisted of its refined products segment, consisting 9,700-mile refined products pipeline system with 53 terminals, as well as 26 independent terminals not connected to its pipeline system and its 1,100-mile ammonia pipeline system; its crude oil segment, consisted of approximately 2,200 miles of crude oil pipelines and storage facilities with an aggregate storage capacity of approximately 26 million barrels, of which 16 million are used for contract storage, and its marine storage segment, consisted of five marine terminals located along coastal waterways with an aggregate storage capacity of approximately 26 million barrels.

Refined Products

The refined products segment consists of its common carrier refined products pipeline system, independent terminals and its ammonia pipeline system. As of December 31, 2016, its refined products pipeline system was the common carrier pipeline system for refined products and liquefied petroleum gases (LPGs) in the United States, extending approximately 9,700 miles from the Gulf Coast and covering a 15-state area across the central United States. As of December 31, 2016, the system included approximately 42 million barrels of aggregate usable storage capacity at 53 connected terminals. As of December 31, 2016, its network of independent terminals included 26 refined products terminals with six million barrels of storage located primarily in the southeastern United States and connected to third-party common carrier interstate pipelines, including the Colonial and Plantation pipelines. As of December 31, 2016, its 1,100-mile common carrier ammonia pipeline system extended from production facilities in Texas and Oklahoma to terminals in agricultural demand centers in the Midwest.

The Company's refined products pipeline system is engaged in providing pipeline capacity and tank storage services, as well as providing services, such as terminaling, ethanol and biodiesel unloading and loading, additive injection, custom blending, laboratory testing and data services to shippers, which are performed under a mix of as needed, monthly and long-term agreements. Its independent terminals are engaged in charging fees based on the amount of product delivered through its facilities and from ancillary services, such as additive injections and ethanol blending. Its ammonia pipeline system is engaged in transportation tariffs on volumes shipped. Its butane blending activity primarily involves purchasing butane and blending it into gasoline, which creates additional gasoline available for it to sell. As of December 31, 2016, it also operated three fractionators along its pipeline system that separate transmix, which is an unusable mixture of various refined products, into its original components. In addition to fractionating the transmix that results from its pipeline operations, it also purchases and fractionates transmix from third parties and sells the resulting separated refined products. Its ammonia pipeline system receives product from ammonia production facilities in Texas and Oklahoma and delivers to agricultural markets in the Midwest, where the ammonia is used by farmers as a nitrogen fertilizer.

Crude Oil

As of December 31, 2016, the Company's crude oil segment consisted of approximately 2,200 miles of crude oil pipelines with an aggregate storage capacity of approximately 26 million barrels of storage, of which 16 million are used for contract storage. The crude oil segment includes the Longhorn pipeline; its Cushing, Oklahoma storage terminal; the Houston-area crude oil distribution system; the crude oil components of its East Houston, Texas terminal; the crude oil components of its Corpus Christi, Texas terminal, including its constructed condensate splitter; the Gibson, Louisiana terminal, and the assets owned by its BridgeTex Pipeline Company, LLC (BridgeTex), Double Eagle Pipeline LLC (Double Eagle), HoustonLink Pipeline Company, LLC (HoustonLink), Saddlehorn Pipeline Company, LLC (Saddlehorn) and Seabrook Logistics, LLC (Seabrook) joint ventures. Its crude oil assets are located to serve crude oil supply, trading and demand centers. It is engaged in transportation tariffs paid by shippers on its crude oil pipelines and storage fees paid by its crude oil terminal customers. In addition, it is engaged in offering ancillary services, including throughput fees. As of December 31, 2016, the approximately 450-mile Longhorn pipeline had the capacity to transport up to 275,000 barrels per day (bpd) of crude oil from the Permian Basin in West Texas to Houston, Texas. Shipments originate on the Longhorn pipeline in Crane, Barnhart or Midland, Texas through trucks or interconnections with crude oil gathering systems owned by third parties and are delivered to its terminal at East Houston or to various points on the Houston Ship Channel, including multiple refineries connected to its Houston-area crude oil distribution system that terminates in Texas City, Texas.

As of December 31, 2016, the Company's East Houston terminal included approximately seven million barrels of crude oil storage, with approximately four million barrels used for contract storage and three million barrels dedicated to the operation of the Longhorn and BridgeTex pipelines, which delivered crude oil to its East Houston terminal. Its East Houston terminal is also connected to its Houston-area crude oil distribution system and to third-party pipelines, including the Houston-to-Houma pipeline, and Argus' West Texas Intermediate (WTI) Houston price assessment is based on trades at the terminal. As of December 31, 2016, its Houston-area crude oil distribution system consisted of over 100 miles of pipeline that connected its East Houston terminal through various interchanges to various points, including multiple refineries throughout the Houston area and Texas City, Texas. In addition, it is directly connected to other third-party crude oil pipelines providing the Company access to crude oil from the Eagle Ford shale, the strategic crude oil trading hub in Cushing, Oklahoma and crude oil imports. As of December 31, 2016, its Cushing terminal consisted of approximately 12 million barrels of crude oil storage, of which two million barrels were reserved for working inventory, leaving 10 million barrels for contract storage. The facility primarily receives and distributes crude oil through the multiple common carrier pipelines that terminate in and originate from the Cushing crude oil trading hub, as well as short-haul pipeline connections with neighboring crude oil terminals.

As of December 31, 2016, the Company owned approximately 400 miles of pipeline in Kansas and Oklahoma used for crude oil service. As of December 31, 2016, its Corpus Christi, Texas terminal included approximately two million barrels of condensate storage, with a portion used for contract storage and a portion used in conjunction with its Double Eagle joint venture discussed below. These assets receive product primarily from trucks, barges and pipelines that connect to its terminal for further distribution to end users by pipeline or waterborne vessels.

Marine Storage

As of December 31, 2016, the Company owned and operated five marine storage terminals located along coastal waterways with approximately 26 million barrels of aggregate storage capacity, including approximately one million barrels of storage jointly owned through its Texas Frontera, LLC joint venture (Texas Frontera). Its marine terminals provide distribution, storage, blending, inventory management and additive injection services for refiners, marketers, traders and other end users of petroleum products. The Company's marine storage terminals are engaged in providing long-term storage services for a range of customers. Refiners and chemical companies use its storage terminals due to tankage constraints at their facilities or the specialized handling requirements of the stored product. It also provides storage services to marketers and traders that require access to storage capacity. As of December 31, 2016, its Galena Park, Texas marine terminal is located along the Houston Ship Channel and is its marine facility with 13 million barrels of usable storage capacity. This facility stores a mix of refined products, blendstocks, heavy oils and crude oil. This facility receives and distributes products by pipeline, truck, rail, barge and ship. As of December 31, 2016, its New Haven, Connecticut marine terminal was located on the Long Island Sound near the New York Harbor and had approximately four million barrels of usable storage capacity and primarily handles heating oil, refined products, asphalt, ethanol and biodiesel. This facility receives and distributes products by pipeline, ship, barge and truck.

As of December 31, 2016, its Marrero, Louisiana marine terminal was located on the Mississippi River and had approximately three million barrels of usable storage capacity. This facility primarily handles heavy oils, distillates and asphalt. It receives products at its Marrero terminal by rail, ship and barge and delivers products from Marrero by rail, ship, barge and truck. Its Wilmington, Delaware marine terminal is located at the Port of Wilmington along the Delaware River. As of December 31, 2016, the facility included three million barrels of usable storage and primarily handles refined products, ethanol, heavy oils and crude oil. It receives products at its Wilmington terminal by pipeline, ship and barge and delivers products from this facility by truck, ship and barge. As of December 31, 2016, its Corpus Christi, Texas marine terminal was located near local refineries and petrochemical plants and included two million barrels of usable storage capacity utilized for heavy oils and feedstocks. It receives and delivers products at its Corpus Christi facility primarily by ship, barge, truck and pipeline.

Company Address

Magellan Midstream Partners LP

1 One Williams Ctr Md 28-1
TULSA   OK   74172-0140
P: +1918.5747000
F: +1302.6555049

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