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Magellan (MMP) Divests 50% Pasadena Marine Terminal Interest

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Magellan Midstream Partners, L.P. (MMP - Free Report) announced the divestment of nearly 50% of its membership interest in its marine terminal — MVP Terminalling, LLC — which it owns through a joint venture in Pasadena, TX.

The partnership divested its refined products marine storage terminal in Pasadena along the Houston Ship Channel to an unidentified buyer for $270 million. Notably, the sale of the membership interest closed on Apr 19.

As a result, Magellan now owns about 25% of the MVP facility, which it will continue to operate. The facility comprises more than 5 million barrels of storage, two ship docks, and truck-loading facilities. Moreover, the partnership mentioned that the facility has an available space that can nearly double its current capacity.

The partnership plans to use the proceeds from the transaction for its capital-allocation priorities, which include potential unit repurchases. The divestiture marks an efficient allocation of portfolio assets, while maintaining a significant presence for the partnership to continue to satisfy the increasing demand for refined product export logistics.

Notably, the Pasadena marine terminal, which is an important energy infrastructure asset, will continue to be highly valued as it is crucial to both the United States and the global economy.

Company Profile & Price Performance

Headquartered in Tulsa, OK, Magellan is a master limited partnership, which owns and operates a diversified portfolio of energy infrastructure assets.

Shares of the company have underperformed the industry in the past six months. Its stock has gained 33.5% compared with the industry’s 46.3% growth.

 

 

Zacks Rank & Stocks to Consider

Magellan currently carries a Zack Rank #3 (Hold).

Some better-ranked players in the energy space are Petrobras (PBR - Free Report) , currently sporting a Zacks Rank #1 (Strong Buy), and Ecopetrol S.A. (EC - Free Report) and W&T Offshore, Inc. (WTI - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Petrobras’s earnings for 2021 are expected to increase 11% year over year.

Ecopetrol’s earnings for 2021 are expected to rise 27% year over year.

W&T Offshore’s earnings for 2021 are expected to increase 30.7% year over year.

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