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Magellan (MMP) to Invest in Expansion of Seabrook Logistics
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On Dec 7, 2016, pipeline operator Magellan Midstream Partners, L.P. and LBC Tank Terminals revealed their plans to expand the infrastructure of Seabrook Logistics. The companies intend to increase the crude oil and condensate storage as well as pipeline assets of Seabrook in the Houston Gulf Coast area for this purpose.
Magellan Midstream’s subsidiary has a 50% stake in Seabrook Logistics, whereas the other half is owned by an affiliate of LBC Tank Terminals. The expansion is estimated to cost $250 million and is likely to become operational in mid-2018.
The expansion involves construction of 1.7 million barrels of additional crude oil and condensate storage adjacent to LBCTank Terminals’ existing terminal in Seabrook. Also, this extension will connect Seabrook’s facility to Magellan’s Houston crude oil distribution system. This will be made possible by the construction of a 24-inch diameter bi-directional pipeline and investment in a new cargo vessel dock with up to a 45 foot draft.
Seabrook Logistics might also be expanded further with construction of an additional 3 million barrels of storage, depending on market demand.
Tulsa, OK-based Magellan Midstream owns and operates a diversified portfolio of energy infrastructure assets. The partnership primarily transports, stores, and distributes refined petroleum products and, to a lesser extent, ammonia. Magellan Midstream conducts its operations via three segments – Refined Products, Crude Oil, and Marine Storage.
The partnership plans to invest an additional $70 million to build a new 24 inch diameter pipeline from its east Houston terminal to Holland Avenue to enhance its infrastructure.
Year to date, the Zacks categorized Oil/Gas Production Pipeline-MLP Industry has registered an impressive growth of 6.8%. However, the Magellan stock has underperformed the industry by registering growth of only 5.32%.This is because, ongoing weakness in oil prices have hurt the partnership’s business big time. However, it has an attractive portfolio of energy infrastructure assets that generate stable and recurring fee- and tariff-based revenues.
As a result, the company currently carries a Zacks Rank #3 ( Hold), which implies that the stock will perform in line with the broader U.S. equity market over the next one to three months.
Some better-ranked players from the broader energy sector include Braskem S.A. (BAK - Free Report) , Ocean Rig UDW LLC and McDermott International Inc. . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last four quarters, Braskem posted an average positive earnings surprise of 105.5%.
Ocean Rig, on the other hand, delivered an average positive earnings surprise of 66.39% in the last four quarters.
In the last four quarters, McDermott posted an average positive earnings surprise of 250.00%.
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Magellan (MMP) to Invest in Expansion of Seabrook Logistics
On Dec 7, 2016, pipeline operator Magellan Midstream Partners, L.P. and LBC Tank Terminals revealed their plans to expand the infrastructure of Seabrook Logistics. The companies intend to increase the crude oil and condensate storage as well as pipeline assets of Seabrook in the Houston Gulf Coast area for this purpose.
Magellan Midstream’s subsidiary has a 50% stake in Seabrook Logistics, whereas the other half is owned by an affiliate of LBC Tank Terminals. The expansion is estimated to cost $250 million and is likely to become operational in mid-2018.
The expansion involves construction of 1.7 million barrels of additional crude oil and condensate storage adjacent to LBCTank Terminals’ existing terminal in Seabrook. Also, this extension will connect Seabrook’s facility to Magellan’s Houston crude oil distribution system. This will be made possible by the construction of a 24-inch diameter bi-directional pipeline and investment in a new cargo vessel dock with up to a 45 foot draft.
Seabrook Logistics might also be expanded further with construction of an additional 3 million barrels of storage, depending on market demand.
Tulsa, OK-based Magellan Midstream owns and operates a diversified portfolio of energy infrastructure assets. The partnership primarily transports, stores, and distributes refined petroleum products and, to a lesser extent, ammonia. Magellan Midstream conducts its operations via three segments – Refined Products, Crude Oil, and Marine Storage.
The partnership plans to invest an additional $70 million to build a new 24 inch diameter pipeline from its east Houston terminal to Holland Avenue to enhance its infrastructure.
Year to date, the Zacks categorized Oil/Gas Production Pipeline-MLP Industry has registered an impressive growth of 6.8%. However, the Magellan stock has underperformed the industry by registering growth of only 5.32%.This is because, ongoing weakness in oil prices have hurt the partnership’s business big time. However, it has an attractive portfolio of energy infrastructure assets that generate stable and recurring fee- and tariff-based revenues.
As a result, the company currently carries a Zacks Rank #3 ( Hold), which implies that the stock will perform in line with the broader U.S. equity market over the next one to three months.
Some better-ranked players from the broader energy sector include Braskem S.A. (BAK - Free Report) , Ocean Rig UDW LLC and McDermott International Inc. . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last four quarters, Braskem posted an average positive earnings surprise of 105.5%.
Ocean Rig, on the other hand, delivered an average positive earnings surprise of 66.39% in the last four quarters.
In the last four quarters, McDermott posted an average positive earnings surprise of 250.00%.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>