Magellan in JV with Copano - Analyst Blog
21 12월 2011 - 10:45PM
Zacks
Pipeline operator Magellan
Midstream Partners L.P. (MMP) has co-partnered with
natural gas service provider Copano Energy L.L.C.
(CPNO) to form a 50:50 joint venture, named Double Eagle Pipeline
LLC. Copano will act as the operator of the venture.
The joint venture will set up a 140
miles long pipeline, connecting the existing 50-mile pipeline
segment owned by Copano. The network will extend to Live Oak,
McMullen and LaSalle Counties of Texas. Double Eagle will also
build a new truck unloading unit along the pipeline near Three
Rivers.
The set of pipelines, with an
initial capacity of 100,000 barrels of oil per day, will be engaged
in transporting condensate from the resource-rich Eagle Ford Shale
to Magellan’s terminal in Corpus Christi, Texas. Magellan will
upgrade the terminal with 500,000 barrels of new dedicated
condensate storage and a new dedicated dock delivery pipeline.
The estimated expenditure of the
project is approximately $150 million that will be equally shared
by Magellan and Copano. The joint venture has received long-term
customer commitments from two major companies having strong acreage
in Eagle Ford Shale – Talisman Energy Inc. (TLM)
and Statoil Marketing and Trading (US) Inc, an affiliate of
Statoil ASA (STO).
The joint venture will start
providing limited services by the end of 2012 and full service is
expected to begin in the first quarter of 2013.
Tulsa, Oklahoma-based Magellan
Midstream is a master limited partnership (MLP) that owns and
operates a portfolio of diverse energy infrastructure assets. The
partnership primarily transports, stores and distributes refined
petroleum products and, to a lesser extent, ammonia. The oil
distributor conducts its operations in three segments: Petroleum
Products Pipeline System, Petroleum Products Terminals and Ammonia
Pipeline System.
Magellan management remains upbeat
about this collaboration that is expected to generate high
strategic value for the company and its customers. The company also
aims to expand its operations in the Eagle Ford Shale play and
looks for more attractive opportunities in the region.
Magellan units currently retain a
Zacks #3 Rank, which translates into a short-term Hold rating. We
are also maintaining our long-term Neutral recommendation on the
stock.
COPANO EGY LLC (CPNO): Free Stock Analysis Report
MAGELLAN MDSTRM (MMP): Free Stock Analysis Report
STATOIL ASA-ADR (STO): Free Stock Analysis Report
TALISMAN ENERGY (TLM): Free Stock Analysis Report
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