(Reuters) Pipeline operator Magellan Midstream Partners said it expects exports of U.S. crude and refined products to grow on increasing global demand for U.S. energy.
Magellan Midstream Partners
U.S. exports of crude and petroleum products touched a record 11.27 million barrels per day in March and this year is likely to top the record 9.58 million touched in 2022, Energy Information Administration data shows, thanks to its competitive pricing.
"We just see world demand pulling those resources into that market. It needs them," CEO Aaron Milford said on a post-earnings call.
While Corpus Christi in south Texas will remain the predominant U.S. crude export hub, a lack of capacity in pipelines to Corpus Christi will push more crude to flow to Houston, Milford added.
Crude oil volumes shipped on Magellan's fully owned pipeline rose 14% to 70 million barrels, while volumes moved on refined products pipelines fell 1%.
Transportation revenue per barrel of refined products shipped rose 17.5%, as more refinery outages in the quarter increased the proportion of long-haul shipments, which move at higher tariffs.
Transportation revenue per barrel of crude shipped eased 8%, Magellan said.
U.S. oil producer Occidental Petroleum Inc. said earlier in the day that crude oil shipping increased its pipeline cost by about $2.55 a barrel, lowering margins on shipping crude from Midland to the U.S. Gulf Coast, after the federal energy regulator increased pipeline shipping tariffs by about 13%.
Magellan's earnings of $1.18 per share was 7 cents above analysts' estimate, and the better-than-expected quarter helped the company raise its full-year distributable cash flow outlook by $40 million to $1.26 billion.
Magellan, which is being acquired by rival ONEOK OKE.N, reiterated that it was confident the merger will close before year-end.
Energy Income Partners, the fourth-largest unit holder in Magellan with a 3.1% stake, has said it intends to vote against the proposed deal, citing concern about the loss of tax benefits.
