Tulsa’s Magellan Midstream Partners, L.P. joined with Houston-based Enterprise Products Partners L.P. in an agreement to jointly develop a futures contract to deliver West Texas Intermediate crude oil from the Permian Basin to terminals in Houston.
The two explained the project was in response to market interest for a Houston-based index with what it said would be “greater scale, flow assurance and price transparency.”
The WTI would be delivered to either Magellan’s East Houston terminal or Enterprise’s ECHO terminal in Houston.
“The industry-recognized quality and consistency of Midland WTI crude oil at Magellan’s East Houston terminal, combined with flexible and reliable market access offered by both Magellan and Enterprise, make this joint effort a logical advancement for crude oil futures,” said Michael Mears, Magellan’s chief executive officer.
A.J. “Jim” Teague, co-chief executive officer of Enterprise’s general partner said the project will feature five pipelines serving the Permian Basin and they are capable of delivering 2 million barrels of crude oil a day into the Houston market.
Magellan owns the longest refined petroleum products pipeline system in the country, with access to nearly 50% of the nation’s refining capacity, and can store more than 100 million barrels of petroleum products such as gasoline, diesel fuel and crude oil.
Enterprise Products Partners L.P. is one of the largest publicly traded partnerships and a leading North American provider of midstream energy services to producers and consumers of natural gas, NGLs, crude oil, refined products and petrochemicals. The partnership’s assets include approximately 50,000 miles of pipelines; 260 million barrels of storage capacity for NGLs, crude oil, refined products and petrochemicals; and 14 Bcf of natural gas storage capacity.