Magellan nets record profits on pipeline revenues
BY ROD WALTON World Staff Writer
Tuesday, February 05, 2013
Record pipeline margins drove Magellan Midstream Partners LP to all-time profits for 2012’s fourth quarter, the Tulsa-based refined and crude petroleum mover reported Tuesday.
Net income totaled $153.8 million for the three months ending Dec. 31, a record that was $40 million higher than the same period in 2011. The pipeline operating margin topped $193 million for the quarter, an increase of $43.2 million.
Crude volumes rose 54 percent on deliveries from new locations connected to Magellan’s pipeline system. Gasoline shipments also increased 7 percent.
“Magellan produced exceptional returns during 2012, generating record operating and financial results from our current assets, launching new crude oil opportunities that solidify our position as a key storage and logistics provider in the crude oil space and increasing cash distributions to our investors by 18 percent for the year,” CEO Michael Mears said in a statement.
For the year, Magellan produced a $435.7 million profit, compared with $413.6 million in the previous 12 months. The annual distributable cashflow accrued a record $539.8 million, or 1.3 times the amount need to pay unitholder distributions, in 2012.
Magellan may spend about $700 million on capital projects this year. The company has started work on its BridgeTex crude oil pipeline in south Texas, a joint venture with Occidental Petroleum due for completion by mid-2014, and also plans to finish the Crane-to-Houston pipeline, formerly known as the Longhorn, by this spring.
Magellan owns and operates about 9,500 miles in refined petroleum and crude oil pipelines, as well as 80 million barrels in storage capacity.