Intercontinental Exchange (NYSE: ICE), operator of global exchanges and clearing houses and provider of data and listings services, and Magellan Midstream Partners, L.P. (NYSE: MMP) have announced the launch of a new auction for a portion of multi-month Permian WTI storage capacity at the Magellan East Houston Terminal. Recently, a total of 1.5 million barrels of Permian WTI storage at the Magellan East Houston Terminal were leased on the ICE trading platform, with an average of 400,000 barrels leased per month. The auctions are designed to help bring additional transparency and efficiencies to the storage and transportation of crude oil in the U.S. Gulf Coast.
Magellan is a crude oil pipeline, storage and transportation company and owns and operates the East Houston crude oil terminal, one of the largest storage terminals in the area. The facility has 8 million barrels of active capacity and the ability to further expand storage at the terminal. The auctions are being hosted on the ICE trading platform to automate the process and improve transparency and efficiencies.
“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 U.S. Gulf Coast region through our alliance with Magellan,” said Jeff Barbuto, Global Head of Oil Sales at ICE.
ICE is home to the world’s global crude and refined oil markets. Around half of the world’s oil futures are traded on ICE’s markets, including futures and options on the global benchmark ICE Brent crude, the U.S. benchmark West Texas Intermediate (WTI) crude, Gasoil, Heating Oil and RBOB Gasoline, as well as hundreds of additional grades and oil products.