Posted December 6, 2017

Magellan Midstream proposes Permian-Gulf Coast pipeline

$1 billion pipeline would run from southwest Texas to Gulf Coast.

Surging Permian Basin production has prompted plans for yet another new pipeline to carry the region’s crude to market.

Magellan Midstream Partners LP has announced plans to develop a new pipeline that would originate from Crane to a location near Three Rivers, transporting various grades of crude and condensate from the Permian and Eagle Ford to the Corpus Christi and Houston markets.

The Tulsa-based company has launched an open season to gauge customer interest in the project; customers can submit binding commitments by 5 p.m. Feb. 1

“We estimate the cost of the project will be in excess of a billion dollars,” Thomas Byers, Magellan’s manager, government and media affairs, said in an email. “However, given the numerous potential variations of this project, we are not providing a total dollar amount at this time.”

He said the proposed pipeline expresses Magellan’s confidence in the longer-term outlook for Permian Basin production and export markets.

The proposed project would include construction of an approximately 375-mile, 24-inch-diameter pipeline from Crane to Three Rivers, where shippers could opt to deliver crude and condensate to the Houston area via a new 200-mile pipeline, or to the Corpus Christi area via a new 70-mile pipeline. The pipeline system is expected to have an initial capacity of at least 350,000 barrels per day with the ability to expand up to 600,000 barrels per day for each destination, depending on demand.

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Source: Midland Reporter-Telegram (Texas)