Magellan Midstream Partners LP (NYSE: MMP) and TransCanada Corp. (TSX, NYSE: TRP) plan to connect TransCanada's Houston tank terminal to Magellan's East Houston terminal. HoustonLink Pipeline Co. LLC, a new company owned 50/50 by Magellan and TransCanada, will construct, own, and operate a nine-mile, 24-in.-diameter crude oil pipeline connecting the terminals. The new pipeline will provide TransCanada's Keystone and Marketlink customers access to Magellan's Houston and Texas City, Texas, crude oil distribution system.
The joint project, first announced in April 2015, is estimated to cost US$50 million. In addition, Magellan and TransCanada plan to develop additional infrastructure at their respective Houston-area terminals to accommodate shipments from the new pipeline. Magellan will serve as construction manager and operator for HoustonLink.
The HoustonLink pipeline is expected to be operational during the first half of 2017, subject to the receipt of all necessary rights-of-way, permits, and regulatory approvals.