Magellan will acquire 7.8 million barrels of crude oil storage in Cushing, Oklahoma, aided by a multi-year utilization agreement from the seller.
The acquisition includes nearly 40 miles of crude oil pipelines running between Houston and Texas City, Texas that vary in size from 24 to 26 inches in diameter.
The company will also acquire two 35-mile common carrier pipelines that transport refined petroleum products from the Texas City refining region to the Houston area, including connections to third-party pipelines for delivery to other end-use markets. An 18-inch pipeline transports gasoline and a 12-inch pipeline transports distillates, such as diesel fuel.
The acquisition is expected to close within 60 days subject to regulatory approval. Upon closing of the transaction, the partnership also will acquire certain crude oil tank working inventory at fair market value, which is currently estimated to be approximately $50m.
Don Wellendorf, CEO of Magellan Midstream Partners, said: “This acquisition leverages Magellan’s expertise in transporting and storing petroleum products by greatly expanding our crude oil logistics infrastructure and our energy footprint in the attractive Cushing, Oklahoma and Houston, Texas markets.”
