Magellan Midstream Partners LP (MMP) entered into a long-term, fee-based, take-or-pay agreement with Trafigura Trading LLC for the exclusive use of Magellan’s new condensate splitter in Corpus Christi, Texas, as part of resolution of a lawsuit it brought against Trafigura.
Magellan also reaffirmed its annual distributable cash flow guidance of $1 billion for 2017. The partnership originally assumed that the splitter would generate no revenue this year, but that was before recent contractions in commodity margins.
Magellan said in a statement that it remains committed to increasing annual cash distributions by 8% in both 2017 and 2018, which would result in an expected distribution coverage of 1.2x the amount needed to pay cash distributions each year.
The splitter, with capacity of 50,000 barrels per day (Mbbl/d) is on schedule to begin commercial operations during late second-quarter 2017.
The company will build storage to handle an additional 300 Mbbl for a total of 1.5 MMbbl and make other minor modifications that will push anticipated capital spending from $300 million to $330 million. Based on these new estimates, the company expects to generate 7x EBITDA on its investment.
Recommended Reading
CorEnergy Infrastructure to Reorganize in Pre-packaged Bankruptcy
2024-02-26 - CorEnergy, coming off a January sale of its MoGas and Omega pipeline and gathering systems, filed for bankruptcy protect after reaching an agreement with most of its debtors.
Baytex Prices Upsized Private Placement of Senior Notes
2024-03-15 - Baytex intends to use the proceeds to pay a portion of outstanding debt on its credit facilities and general corporate purposes.
Jerry Jones Invests Another $100MM in Comstock Resources
2024-03-20 - Dallas Cowboys owner and Comstock Resources majority shareholder Jerry Jones is investing another $100 million in the company.
M4E Lithium Closes Funding for Brazilian Lithium Exploration
2024-03-15 - M4E’s financing package includes an equity investment, a royalty purchase and an option for a strategic offtake agreement.
California Resources Corp. Nominates Christian Kendall to Board of Directors
2024-03-21 - California Resources Corp. has nominated Christian Kendall, former president and CEO of Denbury, to serve on its board.