Magellan buys Shell pipeline for transport of Eagle Ford shale oil

15 August 2013 18:02  [Source: ICIS news]

HOUSTON (ICIS)--Magellan Midstream has acquired from Shell a southeast Texas pipeline to help transfer crude oil from the Eagle Ford shale play for storage or delivery, the US pipeline company announced on Thursday.

The 15-mile West Columbia pipeline originates at Genoa Junction in south Houston and extends northward through Speed Junction and various refinery plants in Pasadena before terminated at Magellan’s east Houston terminal, where the oil would either be stored or delivered into Shell’s recently reversed “Ho-Ho” pipeline.

The “Ho-Ho” was originally named for its Houma, Louisiana-to-Houston route but has been reversed due to the advent of shale oil to send crude from Houston to facilities in Houma.

The West Columbia line has a capacity of 150,000 bbl/day and is bi-directional, allowing Magellan to reverse its flow should the market needs of customers change, the company said.

“The acquisition of the West Columbia pipeline expands our current distribution system by providing additional capacity and also creates opportunities for future connections to third-party terminals in the Houston area,” Magellan said in a news release.

Financial details of the acquisition were not disclosed.

Magellan has been active in recent months in capitalising on the shale boom. In July, it and the Netherlands-based Royal Vopak announced they were jointly looking into developing a deepwater storage and handling facility along the Houston Ship Channel for crude oil, refined products and ethanol.

Also in July, Magellan closed on its $57m (€43m) acquisition of Plains All American Pipeline’s assets in Texas and New Mexico.

In April, Magellan began reversing its Longhorn Pipeline to transport west Texas crude oil to Houston. Transportation volume is expected to reach the full commercial service level of 225,000 bbl/day by the third quarter of this year, the company has said.

($1 = €0.75)

By: Jeremy Pafford
+1 713 525 2653

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