Intercontinental Exchange and Magellan Midstream Partners, L.P. have launched a new auction for a portion of multi-month Permian West Texas Intermediate (WTI) storage capacity at the Magellan East Houston Terminal. The auctions are designed to help bring additional transparency and efficiencies to the storage and transportation of crude oil in the US Gulf Coast. They are being hosted on the ICE trading platform to automate the process and improve transparency and efficiencies.
Magellan owns and operates the East Houston crude oil terminal, one of the largest storage terminals in the area. The facility has 8 million bbls of active capacity and the ability to further expand storage at the terminal. Recently, 1.5 million bbls of Permian WTI storage at the Magellan East Houston Terminal were leased on the ICE trading platform, with an average of 400 000 bbls leased per month.
“We believe this initial storage auction on the ICE trading platform will lead the way for many more successful auctions and other creative options at our East Houston crude oil hub in the future. We are excited about the efficiencies and flexible options this new service brings to our Gulf Coast customers,” said Robb Barnes, Magellan’s Senior Vice President of Commercial Crude Oil.
“At a time when North America is producing and exporting record amounts of crude oil, this opportunity brings together the trading technology and risk management capabilities of ICE’s auction model and futures markets with Magellan’s extensive oil storage and transportation operations in the Gulf region. This is a solid first step towards developing new contracts in the US Gulf Coast region through our alliance with Magellan,” said Jeff Barbuto, Global Head of Oil Sales at ICE.
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