Pipeline operator Magellan Midstream Partners LP MMP declared that it has signed a letter of intent (LOI) with LBC Tank Terminals LLC which operates liquid storage facilities globally.
Per the letter, Seabrook Logistics – in which both Magellan Midstream and LBC Tank Terminals have 50% ownership – will likely expand its crude storage and marine capacity in the Houston Gulf Coast region. In detail, Seabrook Logistics intends to construct additional storage capacity of up to 4 million barrels for a facility located adjacent to the existing terminal of LBC Tank in Seabrook, TX. On top of that, this storage unit will likely be attached to the Houston crude oil distribution system of Magellan Midstream via 24-inch diameter pipelines that are likely to be constructed.
Moreover, Seabrook Logistics is anticipated to add one more ship dock following the completion of the construction of a ship dock and two barge docks. The ship dock will likely handle industry standard Aframax vessels. This will help in the outstanding loading and unloading work at the facility of Seabrook Logistics.
The boards of directors of both the partnership and the company have given permission to the expansion project but await necessary permits, the binding deal and approvals from regulators. It is to be noted that part of the expansion storage and pipeline properties are expected to come online by the end of 2017.
Tulsa, OK-based Magellan Midstream is a master limited partnership (MLP) that 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.
Currently, the partnership carries a Zacks Rank #3 (Hold), implying that it will perform in line with the broader U.S. equity market over the next one to three months.
Some better-ranked players in the energy sector include PetroChina Co. Ltd. PTR, TC PipeLines, LP TCP and North Atlantic Drilling Limited NADL. Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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