Magellan Midstream to add gas condensate splitter
Magellan Midstream Partners (MMP or Magellan) from Oklahoma in USA signed export agreement with the Dutch trading company Trafigura Beheer BV (Trafigura) to expand the Corpus Christi Terminal in Texas with a condensate splitter.
As a midstream company, Magellan is owning and operating the longest pipeline system for the transportation and storage of crude oil and petroleum products in the USA.
With more than 90 million barrels capacity to store crude oil, diesel, fuel and gasoline Magellan is covering 50% of USA with its pipeline system.
Established in 1993, Trafigura emerged in few years as the second largest privately owned trading company for the crude oil and non-ferrous commodities.
This gas condensate splitter project comes into a context where the US regulation considers the still mixed condensate as crude oil and therefore is submitted as the crude oil to the export ban.
Instead, the same condensate after separation are classified as as many natural gas liquids (NGL) and in this case are allowed to be traded and exported as such.
On the supply side, these condensate are sourced from the shale gas fields such as Eagle Ford in pretty competitive conditions due to the current and lasting glut of production.
On the demand side, the global market stands at rather high level for the different NGL that can be extracted from the mixed gas condensate.
In this context any transformation process between the local gas market and the global condensate market is promising to be attractive.
Magellan condensate splitter to tap in Double Eagle
In 2012 Magellan had made a first critical step in that direction with the Double Eagle Pipeline.
Established in joint venture with Copano Energy (Copano), Magellan decided to link Copano pipeline system in Texas shale gas fields to its Corpus Christi Terminal through 225 kilometers pipeline.
In order to store all the condensate coming from Eagle Ford through the Double Eagle Pipeline, Magellan increased capacity by 500,000 barrels.
Therefore the condensate splitter comes as the last ring of the supply chain to Magellan Corpus Christi Terminal and Trafigura overseas export.
This Corpus Christi Terminal condensate splitter project should have a capacity of 50,000 barrels per day (b/d) and should include:
– NGL separation units
– Additional storage capacities of 1 million barrels
– Addition truck bays
– Pipeline connections between Magellan and adjacent Trafigura facilities
In line with their respective midstream and trading core business activities, Magellan and Trafigura will operate the Corpus Christi Terminal Condensate splitter on a fee-based, take-or-pay agreement.
In this Corpus Christi Terminal condensate splitter project, Magellan Midstream Partners (MMP or Magellan) will invest $250 million capital expenditure while Trafigura can expect to benefit from this shale gas-based source of NGL by 2016.
