Under the deal, the companies will form a limited liability firm to expand and develop marine storage facility currently under development along the Houston Ship Channel in Pasadena, Texas.
Each firm will share 50% stake in the new firm, which will own Pasadena facility that can handle petroleum products such as multiple grades of gasoline, diesel and jet fuel, and renewable fuels.
Initially, the facility will include five million barrels of storage capacity, truck loading facilities and two advanced ship docks.
The company has already started construction on the phase 1 of the facility, which includes around one million barrels of storage capacity and new marine dock that can handle Panamax-sized ships or barges with up to a 40ft draft.
The storage capacity at the facility will be increased to 4 million barrels, as well as new three-bay truck rack and second marine dock that can handle Aframax-sized vessels with up to a 45ft will be developed under the second phase.
Once the construction completes, Pasadena facility will be linked to Valero’s refineries in Houston and Texas City through pipeline.
It will also be connected to Colonial and Explorer pipelines, in addition to the already planned connection to Magellan’s Galena Park terminal facility.
Around $820m is expected to be invested for the development of the two phases of Pasadena marine terminal.
Magellan chairman, president and CEO Michael Mears said: “Magellan is pleased to join forces with Valero to combine our extensive pipeline and terminals capabilities with their world-renowned refining and marketing expertise to further expand the state-of-the-art marine facility being constructed in Pasadena.”
