Publicly traded energy pipeline partnership Magellan Midstream Partners LP (MMP - Free Report) is planning to increase the capacity of its Texas-based Longhorn crude oil pipeline. Moreover, in order to receive shipments for crude oil on the pipeline, the partnership is expected to manufacture a new origin which will be situated at Barnhart, Texas.
Magellan Midstream will likely increase the pipeline’s capacity to 275,000 barrels a day (bpd) with an additional capacity of 50,000 bpd, by spending $55 million. Magellan Midstream expects the pipeline to start operations with an improved capacity by the middle of 2014. However, regulatory approval for the project is pending.
Moreover, the new point of origin will be operational by early 2015. For this, Magellan Midstream has to bear an expenditure of roughly $25 million.
Magellan Midstream believes that the new origin along with the Longhorn pipeline’s improved capacity will tap the growing demand for crude oil in the refinery region of the Gulf Coast.
Tulsa, Oklahama-based Magellan Midstream is a master limited partnership (MLP) that owns an attractive portfolio of energy infrastructure assets that generate stable and recurring fee- and tariff-based revenues. Moreover, lucrative acquisitions and organic growth projects have made major contributions toward Magellan Midstream’s development. Over the last 9 years, the partnership has invested nearly $3 billion on various ventures and takeovers.
Magellan Midstream currently holds a Zacks Rank #2 (Buy), implying that it is expected to outperform the broader U.S. equity market over the next one to three months.
Apart from Magellan Midstream, one can look at other well performing oil and gas production pipeline MLPs like Atlas Pipeline Partners LP , Enbridge Energy Management LLC (EEQ - Free Report) and Energy Transfer Partners LP (ETP - Free Report) that offer value. All the partnerships sport a Zacks Rank #2 (Buy).