Magellan Midstream Partners LP teamed up with exchange operator Intercontinental Exchange Inc. to auction dock-capacity rights to its Texas terminals for holders of ICE Permian West Texas Intermediate crude oil futures contracts.
The monthly auction process will give customers who buy an ICE Permian West Texas Intermediate crude futures contract the option to load the product directly onto a vessel at Magellan's Galena Park and Seabrook dock facilities in Texas, according to an Aug. 14 news release. The contract is deliverable at Magellan's East Houston terminal.
Magellan plans to begin the auction Sept. 10 through ICE's WebICE platform for physical delivery in November, according to the release. The capacity offered will be enough to fill Panamax- and Aframax-size vessels, with Suezmax-size vessels to be added in the future.
"We believe this new program will offer our customers the ability to seamlessly enhance their crude oil export capabilities at Houston area facilities, now including Galena Park and Seabrook," Robb Barnes, senior vice president of commercial crude oil at Magellan, said in the release.
Magellan mainly transports, stores and distributes refined petroleum products and crude oil. It also owns the longest refined-products pipeline system in the U.S.