Magellan adds ethanol storage at Texas terminal

By Kris Bevill | February 22, 2012

Magellan Midstream Partners LP is nearing completion on a $2 million expansion project that will add ethanol storage and distribution services to the regular and premium gasoline and diesel services already offered at its Mt. Pleasant, Texas, terminal.  The company is converting a 17,000 barrel tank and installing a state-of-the-art sequential blending system in order to meet increasing demand for renewable fuels, according to a news release. The terminal is expected to begin receiving ethanol via truck in March.

“We are pleased to increase our renewable fuel-related service options for our customers in northeast Texas,” Jeff Selvidge, Magellan senior vice president of transportation and terminals said in a news release. “We now offer ethanol storage and blending services at 71 of our terminals throughout 22 states.”

Weakening demand for ethanol combined with an oversupply has reportedly placed pressure on some ethanol terminals in recent weeks. Casey Carmody, director of logistics and business development at M-Pact Biofuels LLC, said ethanol tanks at several terminals were full in early February, leading to at least one instance of a railroad company placing an embargo on ethanol shipments until the terminal’s stockpile was reduced. The embargo has since been lifted at that terminal, but Carmody expects those types of issues will be ongoing concerns as long as there is an oversupply of ethanol. Bruce Heine, director of government and media affairs at Magellan, said that Magellan’s ethanol inventory remains at “average” seasonal levels.