SAN ANTONIO, Sept. 14, 2017 (GLOBE NEWSWIRE) -- Valero Energy Corporation (NYSE:VLO) (“Valero”) and Magellan Midstream Partners, L.P. (NYSE:MMP) (“Magellan”) announced today the expansion and joint development of the marine storage facility currently under construction along the Houston Ship Channel in Pasadena, Texas. The Pasadena facility, which will handle petroleum products, including multiple grades of gasoline, diesel and jet fuel, and renewable fuels, will be owned by a limited liability company that is owned 50/50 by Magellan and Valero Terminaling and Distribution Company, a wholly owned subsidiary of Valero (“VTDC”), and will initially include five million barrels of storage, truck loading facilities, and two proprietary ship docks.
As Magellan previously announced in July 2016, phase 1 of this facility, which is already under construction, includes approximately 1 million barrels of storage and a new marine dock capable of handling Panamax-sized ships or barges with up to a 40-foot draft. This first phase will now be owned by the jointly-owned company.
Further, this facility will be expanded by an incremental four million barrels of storage, a three-bay truck rack and a second marine dock capable of handling Aframax-sized vessels with up to a 45-foot draft (phase 2). After completion of this expansion, the Pasadena facility will be connected via pipeline to Valero refineries in Houston and Texas City, Texas and the Colonial and Explorer pipelines in addition to the already planned connection to Magellan’s Galena Park terminal facility.
Combined, phases 1 and 2 of the Pasadena marine terminal are currently estimated to cost approximately $820 million, which will be funded equally by capital contributions from Magellan and Valero. Both phases are fully contracted with long-term customer commitments.
Magellan currently serves as construction manager and will serve as operator once construction is complete. Phase 1 of the new terminal is expected to be operational in early 2019, with phase 2 expected to come online in early 2020, subject to receipt of necessary permits and regulatory approvals.
“Valero is excited about this opportunity to work with an exceptional organization like Magellan to jointly develop this flexible and well-positioned terminal,” said Joe Gorder, Valero Chairman, President and Chief Executive Officer. “This project provides another example of our commitment to growing our portfolio of logistics capabilities to support our long-term strategy of expanding and extending our supply chain.”
“Magellan is pleased to join forces with Valero to combine our extensive pipeline and terminals capabilities with their world-renowned refining and marketing expertise to further expand the state-of-the-art marine facility being constructed in Pasadena,” said Michael Mears, Magellan’s Chairman, President and Chief Executive Officer. “Demand for refined products from the Gulf Coast continues to grow, and together, we are well-positioned to continue expanding our marine capabilities to meet this demand from both domestic and international markets.”
If warranted by additional demand, the new Pasadena facility could be expanded to include an incremental five million barrels of storage, another three docks, and expanded truck loading capacity for a maximum footprint of up to 10 million barrels of total storage and up to five docks. All future expansions are expected to be owned by the jointly-owned company.
Valero Energy Corporation, through its subsidiaries, is an international manufacturer and marketer of transportation fuels and other petrochemical products. Valero, a Fortune 50 company based in San Antonio, Texas, with approximately 10,000 employees, is an independent petroleum refiner and ethanol producer, and its assets include 15 petroleum refineries with a combined throughput capacity of approximately 3.1 million barrels per day and 11 ethanol plants with a combined production capacity of 1.4 billion gallons per year. The petroleum refineries are located in the United States (U.S.), Canada and the United Kingdom (U.K.), and the ethanol plants are located in the Mid-Continent region of the U.S. In addition, Valero owns the 2 percent general partner interest and a majority limited partner interest in Valero Energy Partners LP, a midstream master limited partnership. Valero sells its products in both the wholesale rack and bulk markets, and approximately 7,400 outlets carry Valero’s brand names in the U.S., Canada, the U.K. and Ireland. Please visit www.valero.com for more information.
About Magellan Midstream Partners, L.P.
Magellan Midstream Partners, L.P. (NYSE:MMP) is a publicly traded partnership that primarily transports, stores and distributes refined petroleum products and crude oil. Magellan owns the longest refined petroleum products pipeline system in the country, with access to nearly 50% of the nation’s refining capacity, and can store approximately 100 million barrels of petroleum products such as gasoline, diesel fuel and crude oil. More information is available at www.magellanlp.com.
Statements contained in this release that state the company’s or management’s expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The words “believe,” “expect,” “should,” “estimates,” “intend,” “targeting,” and other similar expressions identify forward-looking statements. It is important to note that actual results could differ materially from those projected in such forward-looking statements based on numerous factors, including those outside of the company’s control, such as delays in construction timing and other factors. For more information concerning factors that could cause actual results to differ from those expressed or forecasted, see Valero’s annual reports on Form 10-K, quarterly reports on Form 10-Q and our other reports filed with the SEC and on Valero’s website at www.valero.com, and VLP’s annual reports on Form 10-K and quarterly reports on Form 10-Q filed with the SEC and on VLP’s website at www.valeroenergypartners.com.
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