NEW YORK, July 28 (Reuters) - Magellan Midstream Partners LP
on Thursday reported declining volumes in the last
quarter on the Longhorn and Bridgetex pipelines that carry crude
from the Permian Basin to Houston as shippers likely moved
barrels to the international market, while refined product
volumes rose on pandemic demand recovery.
Shippers on the long-haul crude oil lines took volumes
elsewhere, likely to be exported from Corpus Christi, Texas, -
the top port for oil exports https://www.reuters.com/business/energy/can-us-port-infrastructure-handle-more-crude-exports-2022-07-20/#:~:text=Corpus%20Christi%20is%20the%20largest,for%20the%20Americas%20at%20Kpler
- and to the broader international market, executives said on
an investor call, as Europe's demand for barrels increased
following Russia's invasion of Ukraine.
The port of Corpus Christi is the largest U.S. crude export
"That's an example of potential decisions that our shippers
could be making," said Magellan Chief Executive Aaron Milford,
adding that he expected the moves to be temporary. "We don't
expect that to continue forever, but there are moments where
they may be making those decisions for sure."
Shippers that did not fulfill their commitments would still
have pay what are known as deficiency payments, which are
penalties for not shipping oil, Milford said.
Volumes on the 450-mile (724-km) Magellan's wholly-owned
Longhorn crude oil pipeline from West Texas to Houston averaged
about 200,000 barrels per day in the three months ended June 30
compared with 260,000 bpd in the same period last year.
The Bridgetex crude pipeline from the Permian to Magellan's
East Houston terminal, which is a joint venture, dropped to
215,000 bpd from nearly 315,000 bpd in the year ago period.
The Tulsa, Oklahoma-based company said in December https://www.reuters.com/markets/deals/magellan-exploring-options-its-permian-longhorn-crude-pipe-2021-12-08
that it expected relatively flat volumes for a few years on the
Longhorn and the Bridgetex crude pipelines.
On the Saddlehorn pipeline in Colorado, another joint
venture, volumes were about flat, while levels on the company's
south Texas systems increased.
Meanwhile, volumes on the largest common carrier refined
products pipeline system in the United States increased 3%
partly due to pandemic demand recovery, Magellan said.
Revenue from oil storage decline as a steeply backwardated
market made holding barrels less attractive and following
contract expirations, while operating expenses increased $28
Magellan is a significant owner of tanks at the Cushing,
Oklahoma, storage hub, where levels have held closely above the
operational lows of 20 million barrels in recent weeks.
(Reporting by Laila Kearney in New York
Editing by Marguerita Choy)