Magellan Midstream Partners LP and TransCanada Corp. reported entering into a joint development agreement to pursue a project to connect TransCanada’s Houston tank terminal to Magellan’s East Houston terminal. The project would include the construction of a 9-mile, 24-in. pipeline, in which Magellan and TransCanada would have an equal ownership interest.
The project would give TransCanada’s Keystone and Marketlink shippers access to Magellan’s Houston and Texas City crude oil distribution system.
The joint project is estimated to cost about $50 million. In addition, Magellan would expect to develop additional systems at its East Houston terminal to accommodate movements from the new line. Magellan would serve as construction manager and operator of the pipeline. Construction of TransCanada's Houston tank terminal is expected to be completed this year.
The pipeline would be expected to be operational by late 2016.