Magellan Midstream Partners, L.P. (MMP): Business Model Canvas

Key Partnerships

Oil and gas producers: Magellan Midstream Partners, L.P. (MMP) relies on partnerships with oil and gas producers to secure the necessary supply of crude oil and other products for transportation through its pipelines. By working closely with producers, MMP is able to maintain a consistent flow of products through its infrastructure. Refiners and marketers: Another key partnership for MMP is with refiners and marketers who use its pipelines to transport refined products to various markets. These partnerships are crucial in ensuring that products reach their intended destinations in a timely and efficient manner. Other pipeline operators: Collaboration with other pipeline operators is essential for MMP to expand its network and reach new markets. By forming partnerships with other companies in the industry, MMP can leverage their expertise and resources to enhance its own operations. Regulatory bodies and agencies: As a pipeline operator, MMP works closely with regulatory bodies and agencies to ensure compliance with laws and regulations governing the transportation of oil and gas. These partnerships are critical for maintaining the safety and reliability of MMP's operations. Technology providers: Technology providers play a vital role in helping MMP enhance its operations and efficiency. By partnering with companies that offer cutting-edge technology solutions, MMP can continue to innovate and improve its infrastructure for the benefit of its customers.

• Oil and gas producers
• Refiners and marketers
• Other pipeline operators
• Regulatory bodies and agencies
• Technology providers

Overall, these key partnerships form the foundation of Magellan Midstream Partners, L.P.'s business model, enabling the company to operate efficiently and effectively in the highly competitive oil and gas industry.

Key Activities

Magellan Midstream Partners, L.P. (MMP) engages in several key activities that are essential to its business model:

• Pipeline transportation of petroleum products: One of the primary activities of MMP is the transportation of petroleum products through its extensive network of pipelines. This involves the safe and efficient movement of crude oil, refined products, and other liquids to various destinations.
• Storage and terminal services: MMP operates numerous storage terminals where petroleum products are stored before being transported to their final destinations. These terminals also provide services such as blending and distribution.
• Logistics and distribution management: MMP manages the logistics and distribution of petroleum products, ensuring that they are delivered to customers in a timely and cost-effective manner. This includes coordination with refineries, suppliers, and customers.
• Maintenance and safety operations: Maintaining the integrity of its pipelines and facilities is crucial for MMP's operations. The company invests in regular maintenance and safety measures to prevent leaks, spills, and other incidents.
• Compliance and regulatory management: MMP complies with various regulations and standards governing the transportation and storage of petroleum products. The company has a dedicated team that ensures compliance with environmental, safety, and other regulatory requirements.

These key activities are interconnected and integral to MMP's overall business model, allowing the company to provide reliable and efficient services to its customers while upholding high safety and environmental standards.

Key Resources

Magellan Midstream Partners, L.P. (MMP) has several key resources that enable the company to successfully operate and maintain its business model. These resources include:

• Pipeline infrastructure: MMP owns and operates a vast network of pipelines that transport crude oil, refined petroleum products, and other liquid commodities. This infrastructure allows the company to efficiently move products from production sites to distribution terminals and end-users.
• Storage facilities: MMP has storage tanks strategically located throughout key markets, providing customers with access to secure and reliable storage options. These facilities allow MMP to store large quantities of product and respond quickly to fluctuations in demand.
• Transportation equipment: The company utilizes a fleet of trucks, railcars, and marine vessels to supplement its pipeline operations. This diverse transportation portfolio ensures that MMP can meet the unique needs of each customer and respond to changing market conditions.
• Skilled workforce: MMP employs a team of highly skilled professionals with expertise in areas such as engineering, operations, finance, and environmental compliance. This workforce is critical to the company's success in delivering safe and efficient energy solutions to its customers.
• Proprietary technology systems: MMP leverages advanced technology systems to monitor and optimize its operations. These systems track product movements, detect potential issues, and help the company make data-driven decisions to improve performance and efficiency.

Value Propositions

Magellan Midstream Partners, L.P. (MMP) offers several key value propositions that set it apart in the oil and gas transportation industry:

• Reliable and efficient transport of oil and gas: MMP's extensive pipeline network and storage facilities ensure that oil and gas products are transported safely and efficiently from production sites to key markets.
• Extensive pipeline and storage network: With over 9,600 miles of pipeline and 54 storage terminals, MMP has a vast network that allows for seamless transportation and storage of oil and gas products across the United States.
• Safety and environmental compliance: MMP places a high emphasis on safety and environmental stewardship, implementing stringent measures to ensure that its operations adhere to all regulations and minimize impact on the environment.
• Integrated service offerings: MMP provides a comprehensive suite of services, including transportation, storage, blending, and distribution, offering clients a one-stop solution for their oil and gas logistics needs.
• Strategic geographic locations: MMP's pipelines and terminals are strategically located in key production and consumption regions, enabling efficient transport of oil and gas products to areas of high demand.

Customer Relationships

At Magellan Midstream Partners, L.P. (MMP), we prioritize building strong customer relationships to ensure satisfaction and loyalty. Our approach is centered around long-term service agreements that provide consistency and reliability for our clients. These agreements outline the terms of service and set expectations for both parties, fostering trust and dependability.

We understand that each client has unique needs and challenges, which is why we assign dedicated support teams to work closely with them. Our team members are knowledgeable and experienced in the industry, providing expert guidance and assistance every step of the way. This personalized approach allows us to address any issues promptly and effectively, ensuring a smooth and seamless experience for our clients.

Additionally, we offer real-time monitoring and reporting capabilities to keep our clients informed about their operations. By providing them with access to critical data and insights, they can make informed decisions and optimize their processes for greater efficiency. This transparency in operations builds trust and instills confidence in our clients, demonstrating our commitment to their success.

Our client-focused approach is evident in everything we do, from our communication to our service delivery. We strive to understand our clients' businesses and goals to tailor our solutions to meet their specific needs. By putting their needs first and prioritizing their satisfaction, we aim to build long-lasting relationships that are mutually beneficial.

In conclusion, our emphasis on customer relationships sets us apart in the industry and reinforces our reputation as a trusted partner. We are committed to providing exceptional service and support to our clients, ensuring their success and driving mutual growth.

Channels

Magellan Midstream Partners, L.P. (MMP) utilizes a variety of channels to reach its target customers and create awareness about its services and solutions. These channels include:

• Direct sales team: MMP has a dedicated sales team that reaches out to potential customers, educates them about the company's offerings, and closes deals.
• Company website: The company's website serves as a central hub for information about its services, solutions, and industry expertise. Customers can easily access resources, request quotes, and contact the company through the website.
• Industry conferences and trade shows: MMP actively participates in industry events, conferences, and trade shows to network with potential customers, showcase its capabilities, and stay up-to-date with industry trends and developments.
• B2B partnerships: The company forms strategic partnerships with other businesses in the industry to expand its reach, create new opportunities, and leverage existing relationships to drive growth and profitability.
• Public and government relations: MMP engages in public and government relations activities to build relationships with key stakeholders, gain support for its initiatives, and navigate regulatory challenges and opportunities.

Customer Segments

Magellan Midstream Partners, L.P. (MMP) serves a diverse range of customer segments, each with unique needs and requirements. The following are the primary customer segments that MMP caters to:

• Refineries: Refineries rely on MMP for the efficient transportation of crude oil and refined petroleum products through its extensive pipeline network. MMP's services help refineries streamline their operations and ensure the timely delivery of products to market.
• Oil and gas producers: Oil and gas producers partner with MMP to transport their products from production sites to refineries and other end-users. MMP's pipelines provide a cost-effective and reliable solution for producers to get their products to market.
• Industrial and commercial users: Industrial and commercial users depend on MMP for the transportation of various petroleum products, chemicals, and other liquids essential for their operations. MMP's infrastructure ensures a safe and secure delivery of these products to customer facilities.
• Utility companies: Utility companies rely on MMP for the transportation of natural gas liquids (NGLs) to support their operations. MMP's pipelines help utility companies maintain a consistent supply of NGLs to meet the energy needs of their customers.
• Government and municipalities: Government agencies and municipalities partner with MMP for the transportation of fuels, waterborne products, and other liquids critical for public services. MMP's infrastructure plays a vital role in ensuring the smooth operation of essential services in communities across the country.

Cost Structure

As a company in the midstream sector of the oil and gas industry, Magellan Midstream Partners, L.P. (MMP) incurs a variety of costs to maintain and operate its business. Below is a breakdown of its cost structure:

Operation and maintenance of pipelines:

• Regular inspections, maintenance, and repairs of pipelines are necessary to ensure the safe and efficient transportation of crude oil and refined petroleum products. This includes costs associated with monitoring and controlling the flow of products, as well as managing any potential leaks or spills.
• Costs related to ensuring compliance with industry standards, regulations, and best practices are also included in this category.

Capital expenditure on infrastructure:

• MMP invests heavily in the development, expansion, and maintenance of its pipeline and storage assets. This includes constructing new pipelines, terminals, and storage facilities, as well as upgrading existing infrastructure to meet the growing demands of its customers.

Regulatory compliance costs:

• Compliance with federal, state, and local regulations is a significant cost for MMP. This includes costs associated with obtaining permits, licenses, and approvals, as well as conducting environmental assessments and impact studies.

Workforce expenses:

• Employee salaries, benefits, and training are essential costs for MMP. A skilled workforce is needed to operate and maintain its pipeline network, manage its assets, and ensure the safe and efficient transportation of products.

Technology and IT investment:

• Investments in technology and IT systems are necessary to optimize the efficiency and effectiveness of MMP's operations. This includes costs associated with implementing advanced monitoring and control systems, as well as cybersecurity measures to protect its data and assets.

Revenue Streams

Magellan Midstream Partners, L.P. (MMP) generates revenue through multiple channels within its business model, including:

Fees from transportation services:

• MMP charges fees to customers for transporting various petroleum products through its extensive network of pipelines. These fees are typically based on the volume of product moved and the distance traveled.

Storage and terminal fees:

• MMP also earns revenue by providing storage and terminal services to customers. These fees are typically charged based on the amount of product stored and the duration of storage.

Capacity reservation charges:

• Customers can reserve capacity in MMP's pipelines or storage facilities for future use by paying a fee. This provides customers with guaranteed access to MMP's infrastructure when needed.

Long-term contractual agreements:

• MMP enters into long-term contracts with customers for the transportation and storage of petroleum products. These agreements provide a steady stream of revenue for MMP over an extended period of time.

Ancillary services revenue:

• In addition to its core transportation and storage services, MMP also offers ancillary services such as product quality testing, blending, and additive injection. These services generate additional revenue for the company.