By June 2, 2015 Read More →

9 miles of Keystone pipeline opens door to more Houston refineries

2 million barrels a day of Houston area refining capacity now open to Keystone customers

A short addition connecting the Keystone pipeline to a Houston area hub will expose shippers to an additional two million barrels a day of refining capacity, according to TransCanada and Magellan Midstream Partners.

Keystone

Paul Miller, TransCanada Executive VP and President, Liquids Pipelines.

The companies have entered into a joint development agreement to connect TransCanada’s Houston tank terminal to Magellan’s East Houston terminal. The project would include the construction of a 9-mile, 24-inch diameter pipeline that would give TransCanada’s Keystone and Marketlink shippers access to Magellan’s Houston and Texas City crude oil distribution system.

“Customers on the Keystone Pipeline System already have great access to refineries through the Keystone Gulf Coast extension. This access will be improved with the completion of the Houston Lateral later this year,” said Paul Miller, TransCanada Executive VP and President, Liquids Pipelines.

“By accessing Magellan’s East Houston Terminal, our shippers will have access to an additional two millions barrels a day of refining capacity. That’s significant.”

The partnership is particularly strategic given Magellan’s position in the market. Magellan’s East Houston Terminal system provides unparalleled access to refinery assets.

“This connection would provide our customers with additional supply options for the Houston Gulf Coast refining region, with access to crude oil from the Cushing storage hub,” said Michael Mears, Magellan’s president and CEO.

The 50/50 joint project is estimated to cost approximately $50 million. In addition, Magellan expects to develop additional infrastructure at its East Houston terminal to accommodate movements from the new pipeline. Magellan will serve as construction manager and operator of the pipeline.

The project is subject to the parties’ entry into mutually acceptable agreements and, pending the receipt of any necessary rights-of-way, permits and regulatory or other approvals, the pipeline is expected to be operational by late 2016.

“This is the kind of project that demonstrates TransCanada’s commitment to North American solutions for this continent’s need for energy security and independence,” said Miller.

The Houston Tank Terminal, scheduled to begin service in the second half of 2015, will have an initial 700,000 barrels of crude oil storage capacity, with significant opportunities for expansion. The Keystone system has already transported more than 830 million barrels of crude oil to U.S. refineries, with the upcoming Houston Lateral portion soon to provide even more connectivity to the Houston refining market.

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