Magellan Midstream Partners LP is discussing with companies that develop crude transportation assets in Freeport, Texas, as it plans to build a US crude export terminal instead of its previously scheduled spot off Corpus Christi. Despite Corpus Christi construction, the pipeline operator considers all of its options, including an offshore terminal off Freeport, closer to its crude storage and terminal assets in Houston, according to Mark Roles, senior vice president at Magellan.
Specifically, a Freeport facility would make the operator competitive amongst Enbridge Inc, Kinder Morgan Inc and Oiltanking Partners LP. The latter, have both proposed an offshore facility that is to load 2 million bpd, onto supertankers 80 miles off Freeport, as stated by Reuters.
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Also, Magellans possible Corpus Christi terminal would be able to load approximately 1.5 million bpd on supertankers and would maintain room for more than 20 million barrels of storage capacity.
The fact that Magellan considers Freeport, is another step closer to the race to build US export terminals able to load crude onto supertankers.
The company is following the steps of international commodities trader, Trafigura SA and investor Carlyle Group, when it comes to constructing export terminals off Corpus Christi.
Magellan runs a terminal in Corpus Christi’s inner harbour. Yet, the company is discussing about building pipelines between Houston and Corpus Christi and from the U.S. oil storage hub in Cushing, Oklahoma to Houston.
Mark Roles, senior vice president at Magellan noted that
With all the politics involved, the permitting, I don’t believe more than two of these are going to get built. We want to be on one that’s successful and has long-term commitments on it.
Concluding, the company stated that the oil that flows to the Corpus Christi comes exclusively from Texas fields, whereas Freeport pipelines are connected to the US oil storage hub in Cushing, Oklahoma.
