Magellan Midstream Partners is exploring a sale of a 35% stake in its Longhorn crude oil pipeline in Texas, according to sources familiar with the matter. The evaluation could be as much as $2 billion, and the source spoke on the condition to remain anonymous as the information is confidential.
The operator is working with investment banks to sell the 35% stake in a new business unit containing the Longhorn pipeline in addition to some storage assets on the coast of the Gulf of Mexico.
Magellan would continue to own the remainder, the sources added. The final bids are expected to be lodged next month.
A spokesman for Magellan said: “We are pleased with our existing assets and our strong financial profile. While we are always open to opportunities to optimize our portfolio, we can’t speak to any particular rumors that may be in the marketplace.”
The 275,000-barrel-per-day Longhorn pipeline transports crude from the West Texas part of the Permian Basin to refining and export facilities in Houston.