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Magellan Gauges Shipper Interest for West Texas Pipeline

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Magellan Midstream Partners, L.P. recently commenced the second binding open season to gauge shipping commitments for boosting transportation capacity along the western leg of its refined petroleum products pipeline system in Texas. The extended open season is for the shippers willing to carry oil through the to-be-expanded and the existing pipeline.

This 140-mile long West Texas pipeline, which currently transmits 100,000 barrels per day (bpd), will be lengthened to a capacity of 175,000 bpd. Besides New Mexico, this system generally carries gasoline and diesel to customers in Abilene, Midland/Odessa and El Paso, TX. This expansion, which is scheduled to come online by mid-2020, will likely enable the pipeline get more access to markets across Arizona and Mexico with the help of third-party pipelines.

Based on the response from the supplemental open season, Tusla-based Magellan is taking into account the addition of another 25,000 bpd of capacity on the West Texas pipeline for a total volume of up to 200,000 bpd. This extension can be effective 2021-end.

Further, the firm is building a new refined products terminal in Midland, TX and planning to complete the project in mid-2020.

Magellan is a publicly traded partnership formed to own, operate and acquire a diversified portfolio of energy assets. The firm primarily transports, stores and distributes refined petroleum products and ammonia.

Price Performance & Zacks Rank

Magellan Midstream has gained 8.9% in the year-to-date period, outperforming the 6.5% growth of the industry it belongs to. The partnership currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the energy space are CNX Resources Corporation. (CNX - Free Report) , Marathon Petroleum Corp. (MPC - Free Report) and Kosmos Energy Ltd. (KOS - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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