Magellan to sell half its US marine terminal assets to Buckeye Partners, exit USAC

New York — Magellan Midstream Partners will sell three of its six US marine terminals for $250 million to fellow pipeline operator Buckeye Partners as it sheds its US Atlantic Coast assets to focus on Texas marine operations.

Magellan said Tuesday it plans to complete the sale of its terminals in New Haven, Connecticut; Wilmington, Delaware; and Marrero, Louisiana, late in the first quarter or early in the second quarter 2020, subject to regulatory approval.

Combined storage capacity of the three terminals is roughly 9.9 million barrels.

With the sale of its two US East Coast Marine Storage terminals in Connecticut and Delaware, Magellan exits the US Atlantic Coast market, while keeping their terminal assets concentrated along the Texas Gulf Coast, located at Galena Park, Pasadena and Corpus Christi. Total capacity of the three Texas terminals was 21 million barrels at the end of 2019, with plans to expand Pasadena this year.

"Optimization of our asset portfolio, including divestiture of facilities outside our strategic footprint, is an important element to maximize unitholder value and our strong financial position," Magellan CEO Michael Mears said in a statement.

Buckeye's purchase of the terminals will complement existing US Atlantic Coast assets, giving the company a bigger footprint on the USGC.

The New Haven and Wilmington acquisition adds to Buckeye's East Coast marine terminal network, with 15.7 million barrels of storage currently in New York Harbor at Perth Amboy, Port Reading and Raritan Bay.

Marrero will be Buckeye's first Gulf Coast marine terminal outside of Texas, supplementing current assets at Corpus Christi.

A Buckeye representative was not immediately available for comment.