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Oklahoma based pipeline operator Magellan Midstream Partners, L.P. recently entered into a new fee based agreement with commodity trader Trafigura Trading LLC for the use of its Corpus Christi condensate splitter. This will settle a lawsuit between the two firms over the facility.
Trafigura had inked an agreement with Magellan Midstream in 2014 to use the condensate splitter. However, Magellan Midstream filed a lawsuit in January 2017 after Trafigura decided to terminate its contract. This new deal seeks to bring about an amicable resolution to the dispute.
Magellan Midstream has recently completely the construction of the splitter which is capable of processing 50,000 barrels per day of condensate. The partnership is expected to commence the commercial operation of the splitter in the second quarter of 2017. Per the new agreement, the partnership is also required to construct additional 300,000 barrels of storage and also make minor modifications to the splitter.
Due to the additions and changes in the new agreement, the capital expenditure for the project has been revised to $330 million from the prior estimate of $300 million. Based on the new estimate, Magellan Midstream expects to generate seven times EBITDA multiple on its investment. The partnership affirms distributable cash flow guidance of $1 billion for 2017.
Zacks Rank & Key Picks
Headquartered in Tulsa, Magellan Midstream primarily transports, stores, and distributes refined petroleum products and to a lesser extent, ammonia. Magellan owns an attractive portfolio of energy infrastructure assets that generate stable and recurring fee- and tariff-based revenues.
The partnership has outperformed the Zacks categorized Oil and Gas Production Pipeline industry over the last six months. During the aforesaid period, units of Magellan rallied almost 9.6% while the broader industry gained around 2%.
The partnership currently carries Zacks Rank #3 (Hold).
Energy Transfer Equity is expected to deliver year-over-year growth of 37.23% in its earnings in 2017.
PBF Logistics reported a positive average earnings surprise of 17.80% in the preceding four quarters.
Global Partners posted a positive average earnings surprise of 96.55% in the trailing four quarters.
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Magellan Midstream (MMP) Settles Splitter Deal Dispute
Oklahoma based pipeline operator Magellan Midstream Partners, L.P. recently entered into a new fee based agreement with commodity trader Trafigura Trading LLC for the use of its Corpus Christi condensate splitter. This will settle a lawsuit between the two firms over the facility.
Trafigura had inked an agreement with Magellan Midstream in 2014 to use the condensate splitter. However, Magellan Midstream filed a lawsuit in January 2017 after Trafigura decided to terminate its contract. This new deal seeks to bring about an amicable resolution to the dispute.
Magellan Midstream has recently completely the construction of the splitter which is capable of processing 50,000 barrels per day of condensate. The partnership is expected to commence the commercial operation of the splitter in the second quarter of 2017. Per the new agreement, the partnership is also required to construct additional 300,000 barrels of storage and also make minor modifications to the splitter.
Due to the additions and changes in the new agreement, the capital expenditure for the project has been revised to $330 million from the prior estimate of $300 million. Based on the new estimate, Magellan Midstream expects to generate seven times EBITDA multiple on its investment. The partnership affirms distributable cash flow guidance of $1 billion for 2017.
Zacks Rank & Key Picks
Headquartered in Tulsa, Magellan Midstream primarily transports, stores, and distributes refined petroleum products and to a lesser extent, ammonia. Magellan owns an attractive portfolio of energy infrastructure assets that generate stable and recurring fee- and tariff-based revenues.
The partnership has outperformed the Zacks categorized Oil and Gas Production Pipeline industry over the last six months. During the aforesaid period, units of Magellan rallied almost 9.6% while the broader industry gained around 2%.
The partnership currently carries Zacks Rank #3 (Hold).
Better-ranked players in the industry include Energy Transfer Equity, L.P. , PBF Logistics LP and Global Partners LP (GLP - Free Report) . All the three partnerships sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Energy Transfer Equity is expected to deliver year-over-year growth of 37.23% in its earnings in 2017.
PBF Logistics reported a positive average earnings surprise of 17.80% in the preceding four quarters.
Global Partners posted a positive average earnings surprise of 96.55% in the trailing four quarters.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>