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Magellan Midstream takes legal action against Trafigura over splitter contract

Feb. 02, 2017 5:48 PM ETMagellan Midstream Partners, L.P. (MMP) StockMMPBy: Carl Surran, SA News Editor
  • Magellan Midstream Partners (NYSE:MMP) says it will begin legal action against Trafigura after the commodity trader said it would terminate a contract to use MMP's $300M condensate splitter in Corpus Christi, Tex.
  • Trafigura is the only customer that uses the 50K bbl/day splitter, under a contract it signed in 2014 a fee-based, take-or-pay contract it signed in 2014.
  • Midstream companies built condensate splitters, which break light oil into products such as naphtha and unfinished distillates, during the shale boom because the products could be exported or sold domestically, but the splitters became less necessary after the U.S. began allowing exports of light condensate in 2014 and then lifting the decades-long ban on exporting crude oil.

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