Magellan Midstream Partners Revamps Port Arthur Pipeline Project

TULSA, Okla., Dec. 29 /PRNewswire-FirstCall/ — Magellan Midstream
Partners, L.P. (NYSE: MMP) announced today that it will join forces with
Explorer Pipeline to transport product from Motiva Enterprises LLC’s Port
Arthur, Texas refinery to markets in East Texas. Rather than building an
80-mile pipeline between Port Arthur and Houston as initially announced in May
2008, Magellan will build a 9-mile, 20-inch diameter pipeline to connect its
East Houston terminal, which serves as an origin point for Magellan’s
8,500-mile pipeline system, to Explorer’s existing 28-inch diameter pipeline
that transports petroleum products from Port Arthur to Fauna, Texas, which is
just east of the Houston area. Magellan will also add a pipeline connection
between its East Houston terminal and Motiva’s existing Pasadena terminal.
These projects are expected to be operational by 2011.

Magellan still plans to increase its capabilities to handle additional
transportation volumes at its existing locations including construction of
900,000 barrels of storage and three additional truck rack lanes at its East
Houston terminal and 200,000 barrels of storage at its Frost, Texas facility.
These enhancements are expected to be fully operational by 2010.

These projects continue to be supported by a 15-year agreement with
Motiva.

Further, the partnership has already added ethanol blending capabilities
and a third truck rack lane at its West Fort Worth terminal and is expanding
loading capabilities at its Odessa terminal with the addition of two truck
rack lanes expected by early 2009, both consistent with the original
announcement.

Magellan expects the cost of the revamped project to be $120 million, or
half of the initial project cost of $240 million. Based on current
projections, these growth projects are expected to generate an average annual
operating profit of approximately $9 million during the first three years of
full operation, including about $3 million of depreciation.

“Since we announced this project in mid 2008, we have worked to reduce the
capital required to meet Motiva’s needs,” said Don Wellendorf, chief executive
officer. “By utilizing existing infrastructure, the revised scope
significantly lessens our execution risk while providing a slightly improved
initial return. Importantly, the project continues to provide opportunity for
future growth, which we are pursuing to further improve project returns.”

Based on the progress of expansion projects already underway, including
this project revision, management currently expects to spend about $270
million in 2008, with additional spending of $190 million primarily in 2009 to
complete these projects. In addition, the partnership continues to analyze
more than $500 million of other potential growth projects in earlier stages of
development, which have been excluded from these spending estimates.

About Magellan Midstream Partners, L.P.

Magellan Midstream Partners, L.P. (NYSE: MMP) is a publicly traded
partnership formed to own, operate and acquire a diversified portfolio of
energy assets. The partnership primarily transports, stores and distributes
refined petroleum products. More information is available at
http://www.magellanlp.com. MMP’s general partner interest and related
incentive distribution rights are owned by Magellan Midstream Holdings, L.P.
(NYSE: MGG).

Portions of this document may constitute forward-looking statements as
defined by federal law. Although management believes any such statements are
based on reasonable assumptions, there is no assurance that actual outcomes
will not be materially different. Additional information about issues that
could lead to material changes in performance is contained in the
partnership’s filings with the Securities and Exchange Commission.

     Contact:  Investors:                      Media:
               Paula Farrell                   Bruce Heine
               (918) 574-7650                  (918) 645-8989
               paula.farrell@magellanlp.com    bruce.heine@magellanlp.com

SOURCE Magellan Midstream Partners, L.P.