Magellan Midstream Partners, L.P. MMP recently extended its ongoing open season to see if it can obtain enough committed contracts for the possible extension of the partnership's refined petroleum products pipeline in New Mexico. Potential shippers already showed a keen interest, and the expansion gives them more time to review their commitments.
Pipeline construction involves huge capital investments, which are allocated to laying down new pipelines, expansion and maintenance of existing operations. An open season offers better visibility of demand for the new pipeline pertaining to long-term transportation.
Magellan Midstream’s open season, which began on Feb 16, and was expected to close on Mar 19, 2021, is now scheduled to be concluded on Mar 31. The 250-mile long pipeline facility provides gasoline and diesel fuel transportation service, which runs from Magellan Midstream’s terminal in El Paso, TX to Albuquerque, NM.
The firm’s cost-effective growth will boost the pipeline's capacity by more than 5,000 barrels per day (bpd), bringing the overall capacity to above 30,000 bpd. Following the addition of incremental pumping capabilities, the higher capacity is expected to be available from the second half of next year.
Further, the firm's vast pipeline system will offer the New Mexico market an increased access to refined products from the El Paso-area and the Gulf Coast refineries if the pipeline segment is expanded.
About Magellan Midstream
Tulsa, OK-based Magellan Midstream is a master limited partnership (MLP) that owns and operates a diversified portfolio of energy infrastructure assets. The firm primarily transports, stores and distributes refined petroleum products and to a lesser extent, ammonia.
Zacks Rank & Key Picks
Magellan Midstream currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked players in the energy space are Matador Resources Co. MTDR, Diamondback Energy, Inc. FANG and Denbury Inc. DEN, each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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