April 1, 2014 [Tulsa World] - Magellan Midstream Partners LP will build a $250 million condensate splitter and infrastructure at its terminal in Corpus Christi, Texas, the Tulsa-based petroleum transport and storage company announced Monday.
The splitter is part of a project to build more than 1 million barrels of storage, dock improvements and two additional truck bays at Magellan’s terminal. The work also will include pipelines connecting the terminal and Trafigura AG’s nearby facility.
“Our Corpus Christi terminal is ideally situated to receive condensate from the Eagle Ford shale, including shipments via our Double Eagle pipeline joint venture, and to offer flexible services and a variety of market options for our customer.” Magellan CEO Michael Mears said in a statement.
Magellan is building the splitter and infrastructure under a fee-based, take-or-pay agreement with Trafigura, the Dutch international commodities trading firm. The splitter will be capable of processing 50,000 barrels per day in condensate crude, with another 50,000 BPD possible if demand warranted it.
Trafigura’s director of North America oil trading, Jeff Kopp, said the agreement with Magellan will provide another outlet for producers of domestic crude and condensate.
“We believe Corpus Christi is advantaged over other locations and these investments, along with our other assets in the area, are critical to providing long-term solutions for the producers,” Kopp said.
Magellan is involved in several major pipelines either operating or under construction in south Texas. The Double Eagle is a joint venture with Kinder Morgan Energy Partners to deliver condensate crude from the Eagle Ford Shale to the Gulf Coast.
Mears told Reuters last year that the U.S. Gulf Coast may need more than a half a dozen condensate splitters in the next few years. Splitters are basic distillation towers that process condensate into exportable products.
