TULSA, Okla. and HOUSTON, Feb. 27,
2015 /PRNewswire/ -- Magellan Midstream Partners, L.P.
(NYSE: MMP) ("Magellan") and Plains All American Pipeline, L.P.
(NYSE: PAA) ("Plains") announced today that they have formed
Saddlehorn Pipeline Company, a 50/50 limited liability company, to
construct, own and operate the Saddlehorn pipeline, an
approximately 550-mile pipeline that will transport various grades
of crude oil from the DJ Basin, and potentially the broader Rocky
Mountain area resource plays, to storage facilities in Cushing, OK owned by Magellan and Plains. An
extension to Carr, CO is also
under consideration for connection to existing crude oil assets
owned by Plains in that region.
"Magellan is pleased to work with Plains on the Saddlehorn
pipeline," said Michael Mears,
Magellan's Chief Executive Officer. "Aligning with Plains makes
strategic sense due to their significant marketing and pipeline
presence in this region, adding further value to the pipeline
project to deliver crude oil to the Cushing hub."
"Plains is excited to partner with Magellan on the Saddlehorn
pipeline project," said Greg L.
Armstrong, Chairman and CEO of Plains All American. "The
project is underpinned by ship-or-pay contracts with major
producers in the area that protect our investment. Moreover,
this arrangement provides us the opportunity to realize meaningful
upside to base level returns by shipping additional volumes
associated with PAA's marketing activities in the region."
The project is currently estimated to cost between $800 million and $850 million. Magellan will
serve as construction manager and pipeline operator. Subject to
receipt of necessary permits and regulatory approvals, the
Saddlehorn pipeline is expected to be operational during
mid-2016.
The open season for the Saddlehorn pipeline is set to expire
today, Feb. 27 at 5:00 p.m. Central Time. As previously announced,
binding commitments have been received from Noble Energy, Inc. and
a wholly owned subsidiary of Anadarko Petroleum Corporation
("Anadarko"). In addition,
Anadarko has an option to
participate in equity ownership up to 20% in Saddlehorn Pipeline
Company. Anadarko's option expires
approximately two weeks after the closing of the open season.
About Magellan Midstream Partners, L.P.
Magellan Midstream Partners, L.P. (NYSE: MMP) is a publicly traded
partnership that primarily transports, stores and distributes
refined petroleum products and crude oil. Magellan owns the longest
refined petroleum products pipeline system in the country, with
access to nearly 50% of the nation's refining capacity, and can
store more than 95 million barrels of petroleum products such as
gasoline, diesel fuel and crude oil. More information is available
at www.magellanlp.com.
About Plains All American Pipeline, L.P.
Plains All
American Pipeline, L.P. (NYSE: PAA) is a publicly traded
partnership that owns and operates midstream energy infrastructure
and provides logistics services for crude oil, natural gas liquids
("NGL"), natural gas and refined products. Plains owns an extensive
network of pipeline transportation, terminalling, storage and
gathering assets in key crude oil and NGL producing basins and
transportation corridors and at major market hubs in the United States and Canada. On average, Plains handles over 4.1
million barrels per day of crude oil and NGL on its pipelines. More
information is available at www.plainsallamerican.com.
Portions of this document constitute forward-looking
statements as defined by federal law. Although management of
Magellan Midstream Partners, L.P. and Plains All American Pipeline,
L.P. believe any such statements are based on reasonable
assumptions, there is no assurance that actual outcomes will not be
materially different. Among the key risk factors associated with
the project that may have a direct impact on the partnerships'
results of operations and financial condition are: (1) the ability
to obtain all required rights-of-way, permits and other
governmental approvals on a timely basis; (2) the ability to
complete construction of the project on time and at expected costs;
(3) price fluctuations and overall demand for crude oil; (4)
changes in Saddlehorn Pipeline's tariff rates or other terms
imposed by state or federal regulatory agencies; (5) the occurrence
of an operational hazard or unforeseen interruption; (6) disruption
in the debt and equity markets that negatively impacts the
partnerships' abilities to finance capital spending and (7)
willingness to incur or failure of customers or vendors to meet or
continue contractual obligations related to the project. Additional
information about issues that could lead to material changes in
performance is contained in filings with the Securities and
Exchange Commission for both companies. The companies undertake no
obligation to revise these forward-looking statements to reflect
events or circumstances occurring after today's date.
Contacts:
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Magellan:
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Paula Farrell,
Investor Relations (918) 574-7650,
paula.farrell@magellanlp.com
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Bruce Heine, Media
Relations (918) 574-7010,
bruce.heine@magellanlp.com
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Plains:
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Ryan Smith, Investor
Relations (866) 809-1291
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Brad Leone, Media
Relations (866) 809-1290
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To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/magellan-midstream-and-plains-all-american-to-build-saddlehorn-pipeline-300042722.html
SOURCE Magellan Midstream Partners, L.P.; Plains All American
Pipeline, L.P.