Magellan Midstream Partnersand LBC Tank Terminals, LLC (“LBC”) announced they formed a 50/50 limited liability company. Seabrook Logistics, to own and operate crude oil storage and pipeline infrastructure in the Houston Gulf Coast area.
The assets will include more than 700,000 bbls of new crude oil storage and other distribution infrastructure located adjacent to LBC’s existing terminal in Seabrook. In addition, the JV will build an 18-inch pipeline, which will connect the new storage to an existing third-party pipeline that will transport crude oil to a Houston-area refinery.
Separately, an agreement has been executed to allow the JV to use LBC’s dock for industry standard Aframax vessels with up to a 45-foot draft and two barge docks, which will provide efficient marine access with flexible loading and unloading services at the Seabrook facility.
“We also see growth opportunities at this new facility through the potential connection and integration of this terminal into Magellan’s Houston crude oil and refined products pipeline systems,” said Michael Mears, Magellan’s president and CEO.
The $95 million project is is supported by a long-term storage and transportation commitment with a major refiner. Magellan will be responsible for constructing, maintaining and operating the new pipeline, and LBC will be responsible for constructing, maintaining and operating the new storage tanks and other terminal assets.
The storage facility and pipeline infrastructure are expected to be operational in the first quarter of 2017.