Magellan to Expand Texas Pipeline System

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V-Tex Logistics, LLC, an indirect wholly owned subsidiary of Valero Energy Corporation has signed an agreement with Magellan Pipeline Company, L.P., an indirect wholly owned subsidiary of Magellan Midstream Partners, L.P., to jointly build an approximately 135-mile, 16-inch products pipeline from Houston to Hearne, Texas. In addition, Valero will construct a terminal in Hearne, a terminal in Williamson County, Texas, and an approximately 70-mile, 12-inch pipeline connecting the two terminals.

The expected cost for the projects is $380 million, with a projected in-service date of mid 2019, subject to receipt of any necessary permits and regulatory approvals.

“These projects support our long-term strategy of expanding and extending our supply chain through organic growth projects,” said Joe Gorder, Valero Chairman, President and Chief Executive Officer. “We are very pleased to participate in the Magellan South Pipeline Expansion project. Valero and Magellan have had a long and successful working relationship and the Houston to Hearne pipeline project will build on that history.”

Magellan will own the newly-constructed pipeline, which is designed to deliver additional product to Temple, Waco and Dallas and the company’s Midcontinent markets, including Little Rock, Arkansas. As part of the project, Magellan plans to reverse an existing pipeline which will connect to the new pipeline segment, providing an incremental 85,000 barrels per day of refined products capacity originating from the Houston area.

Furthermore, Magellan will make a number of enhancements to its existing pipeline and terminal infrastructure, including the construction of 1 million barrels of refined products storage on a combined basis at its facilities in Dallas, East Houston and Hearne, and additional connections to third-party refineries, pipelines and terminals within the Houston Gulf Coast region, including the new Pasadena, Texas marine terminal currently under construction and expected to be operational in early 2019.

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