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Pasadena terminal expanded

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Hydrocarbon Engineering,

Magellan Midstream Partners and Valero Energy Corp. have announced the expansion and joint development of a marine storage facility that is currently under construction along the Houston Ship Channel in Pasadena, Texas, US. The Pasadena facility – which will handle petroleum products, including multiple grades of gasoline, diesel and jet fuel, and renewable fuels – will be owned by Magellan and Valero (50/50) and will initially include 5 million bbls of storage, truck loading facilities and two proprietary ship docks.

As announced in July 2016, phase one of this facility is already under construction. It includes approximately 1 million bbls of storage and a new marine dock that is capable of handling Panamax-sized ships or barges with up to a 40 ft draft. This first phase will now be owned by the joint company.

This facility will be expanded by an incremental 4 million bbls of storage, a three bay truck rack and a second marine dock that is capable of handling Aframax-sized vessels with up to a 45 ft draft (phase two). After completion of this expansion, the Pasadena facility will be connected via pipeline to Valero’s refineries in Houston and Texas City, Texas and the Colonial and Explorer pipelines in addition to the already planned connection to Magellan’s Galena Park terminal facility.

Combined, phases one and two of the Pasadena marine terminal are estimated to cost approximately US$820 million, which will be funded equally by Magellan and Valero. With the new arrangement, Magellan’s incremental capital spending will be approximately US$75 million more than its previous spending estimates of US$335 million for phase one alone. Both phases are fully contracted with long-term customer commitments.

Magellan currently serves as construction manager and will serve as the operator once construction is complete. Phase one of the new terminal is expected to be operational in early 2019, with phase two expected to come on-line in early 2020, subject to receipt of necessary permits and regulatory approvals.

“Magellan is pleased to join forces with Valero to combine our extensive pipeline and terminals capabilities with their world-renowned refining and marketing expertise to further expand the state-of-the-art marine facility being constructed in Pasadena,” said Michael Mears, Magellan’s chairman, president and chief executive officer. “Demand for refined products from the Gulf Coast continues to grow, and together, we are well-positioned to continue expanding our marine capabilities to meet this demand from both domestic and international markets.”

If warranted by additional demand, the new Pasadena facility could be expanded further to include an incremental 5 million bbls of storage, another 3 docks and expanded truck loading capacity, for a maximum footprint of up to 10 million bbls of total storage and up to five docks. All future expansions are expected to be owned by the jointly-owned company.

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