Magellan Midstream Partners, L.P. (MMP) announced that its purchase of substantially all of the assets of Longhorn Partners Pipeline, L.P. has been approved by the bankruptcy court. The purchase included a 700-mile common carrier pipeline system that transports refined petroleum products from Houston to El Paso and a terminal in El Paso, comprised of a 5-bay truck loading rack and 900,000 barrels of storage. The terminal serves local petroleum products demand and distributes product to connecting third-party pipelines for delivery to Arizona, New Mexico and, in the future, northern Mexico.
The purchase price for the pipeline system was $250 million plus the fair market value of line fill, which is estimated at $100 million. Magellan has indicated it intends to connect this pipeline system to the partnership’s existing terminal at East Houston to provide additional supply options for current and potential customers to transport petroleum products to southwestern markets. Magellan will complete construction of an additional 400,000 barrels of storage that is under way at the El Paso terminal. Both projects should be complete by mid-2010 at an estimated cost of $25 million.