Magellan Midstream has signed a joint development agreement with TransCanada to pursue a project to connect TransCanada’s Houston tank terminal to Magellan’s East Houston terminal.
The two companies will have a 50/50 ownership interest in the project, which will include the construction of a 9-mile, 24-inch diameter pipeline.
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The project will provide access to Magellan’s Houston and Texas City crude oil distribution system for TransCanada’s Keystone and Marketlink shippers.
Magellan president and chief executive officer Michael Mears said: "Magellan is excited about the prospect of further enhancing our crude oil connectivity in the Houston market.
"This connection would provide our customers with additional supply options for the Houston Gulf Coast refining region, with access to crude oil from the Cushing storage hub."
Magellan will be responsible for construction and operation of the $50m pipeline project, which is scheduled to be operational by late 2016.
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By GlobalDataTransCanada president and chief executive officer Russ Girling said: "TransCanada is committed to developing energy infrastructure solutions for our customers in Canada and the U.S., and this project would allow us to directly connect to key refineries in the Houston and Texas City area.
"This is another great example of a project that would help to bolster North American energy security and independence."
TransCanada plans to complete the construction of Houston tank terminal in 2015.
The joint pipeline project is subject to the parties’ entry into mutually acceptable agreements and, pending the receipt of any necessary rights-of-way, permits and regulatory or other approvals.
Magellan is also planning to develop additional infrastructure at its East Houston terminal aimed to accommodate movements from the new pipeline.
