The $820 million project will be jointly paid for by Valero and Tulsa, Oklahoma-based Magellan Midstream Partners. The project will be jointly owned by Valero and Magellan through a limited liability company.

The terminal is expected to be complete in early 2020 and will include 5 million barrels of gasoline and other fuels storage, two marine docks and truck loading facilities.

“Demand for refined products from the Gulf Coast continues to grow, and together, we are well-positioned to continue expanding our marine capabilities to meet this demand from both domestic and international markets,” said Magellan Chairman and CEO Michael Mears in a press release.

Magellan will serve as the construction manager and will operate the facility when it is complete.

The deal is the second in eight days struck between the two companies after a Sept. 6 agreement to jointly build a 135 mile, 16-inch pipeline from Houston to Hearne, northwest of Bryan-College Station.

Valero will separately build a terminal and spend $180 million on the entire project, which will connect to a proposed $200 million pipeline and terminal project Valero intends to build in Williamson County near Hutto.

The first phase of the Pasadena facility is already under construction by Magellan Midstream Partners, which announced in July that it was building 1 million barrels of storage and a marine dock on 200 acres of land. The dock will be able to handle vessels with up to a 40-foot draft, and the first phase is planned to be operational in early 2019.

The second phase, planned for completion in early 2020, will add 4 million barrels of storage capacity and an additional dock with a 45-foot draft.

Valero and Magellan said the terminal could be expanded by another 5 million barrels of storage and three more docks, all of which would be jointly owned.

After the second phase is complete, Magellan says the new terminal will be connected by pipeline to Valero’s refineries in Houston and Texas City, according to a Magellan news release. It will also tie into the Colonial Pipeline, which supplies much of the South and ends in New Jersey, and the Explorer Pipeline, which sends fuels from Houston to North Texas, Oklahoma, and the Midwest up to Chicago.

The terminal will also connect to Magellan’s Galena Park storage terminal through a new 36-inch pipeline, which according to SEC filings has 13 million barrels of storage capacity for refined products, crude oil and other petroleum products. An existing 18-inch Magellan pipeline from Texas City to Pasadena will also connect to the new terminal.

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