April 14, 2015 / 8:54 PM / 3 years ago

UPDATE 1-Magellan Midstream, TransCanada to develop Houston pipeline

(Adds details on the partnership, and the pipeline’s cost and makeup)

April 14 (Reuters) - Magellan Midstream Partners LP and TransCanada Corp , Canada’s second-largest pipeline company, said on Tuesday they will develop a pipeline to connect TransCanada’s Houston tank terminal to Magellan’s East Houston terminal.

The project will give shippers on TransCanada’s Keystone and MarketLink lines access to Magellan’s Houston and Texas City crude oil distribution system, the companies said on Tuesday.

The move will provide more transportation and infrastructure options within Houston’s refinery row, market participants say.

The project includes construction of a nine-mile, 24-inch diameter pipeline, in which Magellan and TransCanada would have a 50/50 ownership interest. The project is estimated to cost about $50 million, and the pipeline is expected to be in operation by late 2016, pending certain agreements and approvals.

Construction of TransCanada’s Houston tank terminal is expected to be completed in 2015.

Reporting by Sneha Banerjee in Bengaluru and Catherine Ngai in New York; Editing by Saumyadeb Chakrabarty and Peter Galloway

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