Magellan Midstream to construct Delaware Basin pipeline

Magellan Midstream Partners LP (NYSE: MMP) will construct a new Delaware Basin pipeline originating in Wink, Texas to handle crude oil and condensate.

Magellan will build an approximately 60-mile, 24-inch pipeline from Wink to Crane, Texas, which serves as an origin to its Longhorn pipeline. The new Wink pipeline will have an initial capacity of 250,000 barrels per day (/pd) with the ability to expand to more than 600,000 b/d if warranted by industry demand. The project also includes construction of a new terminal at Wink which will offer broad inbound and outbound pipeline access to parties that connect to the facility.

Magellan currently expects the project to cost approximately $150 million and to be operational in mid-2019, subject to receipt of any necessary permits and regulatory approvals.

The new pipeline segment will offer direct service from the Delaware Basin to the Crane origin of Magellan's Longhorn pipeline, which provides crude oil and condensate transportation service to the Houston and Texas City refining complex and marine export facilities. In addition, this pipeline segment will be able to provide service from the Delaware Basin to the new crude oil and condensate line to Corpus Christi, Texas that has been proposed by Magellan as well as others in the industry.

Magellan plans to conduct an open season for commitments on the new pipeline system at a later time; however, construction of the new pipeline does not depend on the results of the open season. In addition, the partnership is assessing additional pipeline and terminal investments in West Texas to strengthen and enhance its overall crude oil service offerings.

 

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