By August 2, 2016 Read More →

Magellan reports decline in Q2 BridgeTex pipeline volumes

BridgeTex pipeline

BridgeTex pipeline normally ships 300,000 b/d, however, in Q2, shipments dropped to around 210,000 b/d as shippers decided to move their minimum requirements. photo.

BridgeTex pipeline runs from West Texas to Houston

HOUSTON, Aug 2 (Reuters) – Shipments on Magellan Midstream Partners’ 300,000 barrel per day (b/d) BridgeTex pipeline from West Texas, to Houston, Texas fell to around 210,000 b/d in the second quarter, as shippers opted to move their minimum requirements, executives said on Tuesday.

The midstream operator also said it expected volumes on its 275,000 b/d Longhorn pipeline from Crane, Texas to Houston, Texas to decline for the remainder of the year as shippers take advantage of historical credits earned by shipping above minimum volume requirements in the past.

The lower volumes come as some price differentials have fallen below the cost of shipping, executives said on the company’s second-quarter earnings call, and as production has declined during a two-year oil price rout.

“Our working assumption is that there will be a year or two of over capacity in the market,” Chief Executive Officer Mike Mears said on the call.

“We don’t feel like we’ve got a long-term problem. At worst we’ve got a short-term problem.

Magellan also said it expects linefill for its new Saddlehorn pipeline to be around 1 million barrels, and that the process will be complete by the end of the month.

(Reporting by Liz Hampton, editing by G Crosse and Bernard Orr)

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