February 8, 2017 [World Pipelines] - Magellan Midstream Partners, L.P. has reported net income of US$213.3 million for 4Q16, compared to US$207.1 million for 4Q15, a rise that has been driven by record quarterly results for the partnership's crude oil and marine storage segments.
Distributable cash flow (DCF) was a record US$277.2 million for 4Q16, compared to US$256.9 million for 4Q15.
This was primarily due to continued strong performance from the partnership’s fee-based activities, including higher than expected earnings from the BridgeTex pipeline and lower operating costs.
Magellan’s crude oil operating margin was US$111.7 million, an increase of US$16.5 million and a quarterly record for this segment. Transportation and terminals revenue increased primarily due to additional leased storage contracts at Magellan’s East Houston terminal.
Project update: Magellan is focused on expansion
In 2016, the company spent a record US$736 million on organic growth construction projects. Based on the progress of expansion projects already underway, the partnership expects to spend US$550 million in 2017 and US$350 million in 2018 to complete its current slate of construction projects.
The above estimates include spending for recently announced projects, such as expansion of the Seabrook Logistics joint venture to construct an incremental 1.7 million bbls of storage and to connect the facility to Magellan’s Houston crude oil distribution system, expansion of the BridgeTex pipeline to 400 000 bpd and construction of a new pipeline segment from Magellan’s East Houston terminal to Holland Avenue.
