Kinder Morgan Energy Partners, L.P. KMP today announced it has entered
into a long-term, fee-based agreement with BP North America to underwrite an
additional 50,000 barrels per day (bpd) of throughput capacity at the
petroleum condensate processing facility Kinder Morgan is constructing near
its Galena Park terminal on the Houston Ship Channel. With the new agreement,
Kinder Morgan will invest an additional $170 million to add a second unit to
its previously announced $200 million condensate processing facility and
increase the facility's total capacity to 100,000 bpd. The investment also
includes the company building an additional 700,000 barrels of storage
capacity for product being split at the facility.
“We are pleased to secure long-term contracts for all of the throughput
capacity at our facility, and provide BP with the processing needed for Eagle
Ford Shale production and other condensates,” said KMP Products Pipelines
President Ron McClain. “Combined with our recently completed Kinder Morgan
Crude Condensate (KMCC) pipeline, we are able to provide unparalleled
connectivity to crude oil and clean products markets on the Texas Gulf Coast.”
The transaction is expected to be immediately accretive to cash distributable
to KMP unitholders upon the project's completion in the second quarter of
2015.
Kinder Morgan's processing facility will split condensate into its various
components, such as light and heavy naphtha, kerosene, diesel and gas oil, and
can be further expanded pending additional market interest. Kinder Morgan
previously announced the first phase of its processing facility when it
secured the initial commitment of 25,000 bpd of capacity. The company expects
to place the first unit in service in the first quarter of 2014.
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