Locator: 49048ONEOK.
Strong demand for refined products (especially jet fuel) in Arizona and refinery closures in Southern California have spurred the development of a new refined products pipeline from West Texas to the Phoenix area. ONEOK, whose acquisition of Magellan Midstream Partners made it a player in refined products, has announced an open season for the proposed Sun Belt Connector pipeline, which would expand PADD 2 and PADD 3 refiners’ access to premium markets out West. In today’s RBN blog, we discuss ONEOK’s plan and how it could impact refined products markets.
ONEOK’s $18.8 billion purchase of Magellan Midstream Partners in September 2023 was transformational. For years, ONEOK had focused solely on the gas-and-NGLs side of things, with gas gathering systems, processing plants, storage, long-haul gas and NGL pipelines, and fractionators. Acquiring Magellan gave the company an equally impressive set of crude oil and refined products assets, including (on the crude oil side) the Longhorn Pipeline from the Permian to the Houston area; 30% stakes in the BridgeTex Pipeline (also from the Permian to Houston; ONEOK recently increased its stake to 60%) and Saddlehorn Pipeline (from the Denver-Julesburg Basin to the Cushing, OK, crude oil hub); and full or partial ownership interests in several major terminals, some of which handle refined products as well as crude.
