Magellan says pipeline on track to shift to sub-octane by September 15

Houston (Platts)--19Jul2013/232 pm EDT/1832 GMT


Magellan Midstream Partners is on track to convert its pipeline system in the Midwest to 84 sub-octane by September 15, a company spokesman said Friday.

The conversion was first announced in December, when the pipeline company said it planned to halt shipments of conventional 87 octane gasoline, and replace it with a 84 octane blendstock, to be called "V" grade for deliveries into Tulsa, Oklahoma and the wider Midwest.

"Since that time, Magellan representatives have been actively working to prepare our transportation and distribution system for the conversion," spokesman Bruce Heine said in an email.

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The introduction of a sub-octane or a CBOB-type blendstock reflects the growing adoption of ethanol in the overall US gasoline pool.

The expansion of ethanol terminals with easy access to the pipeline means shippers will be able to add ethanol to V grade to make it ready for retail use.

An 84-octane blendstock would require ethanol added at 10% volume to achieve a final rating of 87 octane.

The company added it plans to allow V grade shipments under certain circumstances between September 12 and 15, in order to replace 10 RVP and 11.5 RVP conventional gasoline grades.

These shipments will remain segregated from the 9 RVP V grade pool, and will only be released beginning September 16.

Magellan announced it would transition all storage along the pipeline to V grade between September 12 and 18.

The company also expects to clear conventional gasoline from terminal racks by September 20, once all remaining inventory is depleted.

Magellan's refined products pipeline system runs from Houston through northern Minnesota, with a major injection point located in Tulsa, Oklahoma.

--Subhan Usmani, subhan.usmani@platts.com  
--Edited by Richard Rubin, richard.rubin@platts.com

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