Magellan Midstream Partners, L.P. 



 †††††††††† Magellan Midstream Partners, L.P. went public in February 2001 as Williams Energy Partners L.P. (NYSE:  WEG), changing its name to Magellan Midstream Partners in September 2003.  The partnership is engaged in the storage, transportation, and distribution of refined petroleum products and ammonia.  Its asset portfolio currently consists of:



 Pipeline Systems


Magellan's refined petroleum products system is the fifth largest common carrier pipeline of refined petroleum products and LPGs in the United States based on barrel miles shipped. Through direct refinery connections, and interconnections with other interstate pipelines, the system can access approximately 44% of the refinery capacity in the continental United States.  The system generates approximately 80% of its revenue, excluding product sales revenue, through transportation tariffs for the volumes it ships.


Magellan's refined petroleum products system covers an 11-state area extending from Oklahoma through the Midwest to North Dakota, Minnesota and Illinois. It consists of 6,700 miles of pipe and 25.6 million barrels of aggregate storage capacity at 38 terminals and at various pump stations. The products transported on the system are largely transportation fuels, and in 2002 were comprised of 59% gasoline, 31% distillates (which includes diesel fuels and heating oil) and 10% LPGs and aviation fuel.  Product originates on the system from direct connections to refineries and interconnections with other interstate pipelines for transportation and ultimate distribution to retail gasoline stations, truck stops, railroads, airlines and other end-users.  Magellan's refined petroleum products system has experienced increased shipments over the last three years, with total shipments increasing by 2.4% from 2000 to 2002. The volume increases have come partly as a result of development projects on the system and from incentive agreements with shippers utilizing the system. In 2002, demand growth for refined petroleum products in the markets served by the system was slowed largely by generally less favorable economic conditions in those markets.


 †††††††††† Magellan's ammonia pipeline, which is the worldís first ammonia common carrier pipeline, has a maximum annual delivery capacity of approximately 900,000 tons.The 1,100-mile system originates at production facilities in Borger, Texas, Verdigris, Oklahoma and Enid, Oklahoma and terminates in Mankato, Minnesota.  It transports ammonia to 13 delivery points along the pipeline system. The facilities at these points provide customers with the ability to deliver ammonia to distributors who sell the ammonia to farmers and to store ammonia for future us; ad also provide our customers with the ability to remove ammonia from the pipeline for distribution to upgrade facilities that produce complex nitrogen compounds such as urea, ammonium nitrate, ammonium phosphate and ammonium sulfate.


Petroleum Products Terminals


Terminals play a key role in moving petroleum products from refineries to the end-user market by providing storage, distribution, blending and other ancillary services. Products stored in and distributed through Magellan's terminal network include:



Because these terminals are unregulated, the marketplace determines the prices the companies can charge for its services.


Magellanís marine terminal facilities are located in close proximity to refineries and are large storage and distribution facilities that handle refined petroleum products, blendstocks and heavy oils and feedstocks.These facilities provide inventory management, storage and distribution services for refiners and other large end-users of petroleum products. They include four terminal facilities in the Gulf Coast region (two each in Louisiana and Texas), which is a major hub for petroleum refining, and one in New Haven, Connecticut near the New York Harbor.Magellanís marine terminal facilities have an aggregate storage capacity of approximately 17.6 million barrels.


The marine terminal facilities primarily receive petroleum products by ship and barge, short-haul pipeline connections to neighboring refineries and common carrier pipelines.Petroleum products are distributed from the marine terminals by all of those means, as well as by truck and rail. Once the product has reached the terminal facilities, it is stored for a period of time ranging from a few days to several months.The marine terminal facilities also provide ancillary services including heating, blending, and mixing of stored products and injection services.


Magellanís 23 inland terminals are located in the southeastern United States.   Customers utilize these facilities to take delivery of refined petroleum products transported on major common-carrier interstate pipelines.The majority of inland terminals connect to the Colonial, TEPPCO, Explorer and Plantation pipelines; some have multiple pipeline connections.  In addition, the Dallas terminal connects to Dallas Love Field airport via a 6-inch pipeline.


The inland terminal facilities typically consist of multiple storage tanks connected by a third-party pipeline system.  Products are loaded and unloaded through an automated system that allows them to move directly from the common carrier pipeline to Magellanís storage tanks and directly from the storage tanks to a truck or rail car loading rack.  Because Magellan does not own the products moving through the terminals, it is not exposed to the risks of product ownership. The inland terminals are operated as distribution terminals, primarily serving the retail, industrial and commercial sales markets.  Services provided include inventory and supply management through Magellan's virtual supply network and ATLAS 2000 software system; distribution; and other services such as injection of gasoline additives.


†††††††††† Additional information about Magellan Midstream Partners can be found on the companyís website at or by contacting Paula Farrell at 918-573-9233; email [email protected].


Financial Information from 2003 10-K

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*As of June 30, 2003 and June 28, 2002



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