Magellan’s new proposal: connect Permian, Eagle Ford to TX coast

By Luke Geiver | December 05, 2017

Magellan Midstream has proposed a new pipeline project that would connect Permian and Eagle Ford crude production with export and refining locations in Corpus Christi and Houston, Texas. Based on shipper demand, the pipeline could be capable of transporting both crude and condensates. The capacity of the line will range from 350,000 barrels per day to a maximum of 600,000 bpd.

In exchange for incentive tariff rates for use of the pipeline, Magellan is seeking either long-term revenue or acreage dedications from producers in the Permian and Eagle Ford.

The project, if completed, could include a combination of newly built assets and leased or existing assets, according to Magellan.

In Corpus Christi, Magellan said it can give producers the ability to move crude to deep water export docks or get the crude to more than 800,000 bpd of refining and fractionation capacity. In Houston, producers would have access to more than 2.8 million bpd of refining or fractionation capacity. Magellan is open to expanding its footprint in either Corpus Christi or Houston to meet the needs of Permian and Eagle Ford producers.

The pipeline system could also necessitate line expansions in Midland, Orla, Gardendale or Helena, Texas, all of which are cities located in either the Permian or Eagle Ford. Depending on shipper commitment, the pipeline could be completed by the end of 2019.

Oil production in both the Permian Basin and the Eagle Ford shale play is expected to increase in 2018.