Magellan Midstream Partners LP (NYSE: MMP) has canceled plans to develop a stand-alone crude pipeline West Texas, the area of the nation’s top oil field as it considers a lower-cost project for the same region, an executive said on Jan. 31.
The Tulsa-based company plans to pursue a lower-cost project to meet shipper needs in an effort to be more capital efficient, its CEO told investors on a conference call.
“It would be a much, much lower capital investment, and it would be a much more efficient way for us to source barrels into Longhorn [pipeline] for our customers,” Magellan CEO Michael Mears said.
In 2017, Magellan estimated that the pipeline would cost $150 million. A write off of expenditures related to the project reduced fourth-quarter distributable cash flow by $9 million, an executive said on the call.
The Tulsa, Oklahoma-based pipeline operator had said in 2017 it would build a 60-mile pipeline from Wink to Crane, Texas to supply crude to its large, 275,000-barrel-per-day Longhorn crude pipeline. That line runs from the Permian Basin in West Texas to refining and export facilities in Houston.
Kinder Morgan Inc. has begun internal discussions about building a third natural gas pipeline in the Permian Basin as demand for gas takeaway capacity continues to surge, CEO Steven Kean told investors on April 17.
Open season for the proposed Voyager crude line is extended by two months.
Pipeline expected to be fully operational by April 1.