Kinder Morgan Energy Partners LP (KMP) and BP North America have struck a long-term, fee-based agreement supporting an additional 50,000 b/d of throughput capacity at a condensate processing facility KMP is constructing on the Houston Ship Channel.
With the new agreement, Kinder Morgan will invest an additional $170 million to add a second unit to its $200 million condensate processing facility at its Galena Park terminal and increase total capacity to 100,000 b/d. The investment includes an additional 700,000 bbl 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.”
KMCC is a 180-mile pipeline that transports crude and condensate from the Eagle Ford to the Houston Ship Channel (see Shale Daily, June 15, 2012).
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 announced the first phase of the facility when it secured the initial commitment of 25,000 b/d of capacity. The company expects to place the first unit in service in the first quarter of 2014.
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