Magellan Provides Status of Mereenie Gas Sales

In prior communications, December 15, 2009 was noted as the Blacktip startup date which could cause significant gas flow reductions at Magellan's Mereenie gas and oil field west of Alice Springs, NT, Australia. December 15th has passed and Magellan continues to sell natural gas volumes at or slightly below historical volume levels to Power and Water Corporation (PWC) under the "reasonable endeavors" provision of the higher-priced Mereenie Sales Agreement 4 (MSA4). MSA4 extends to December 31, 2010 (unless amended or further extended) and is intended to supplement Blacktip volumes.

Magellan is not currently holding gas supply discussions with PWC. However, gas flow is continuing under MSA4 and further reviews to sort through the status of Blacktip and Darwin supply diversity could occur.