December 12, 2012 [OPIS] - Kinder Morgan Energy Partners LP said on Tuesday that its new Battleground Oil Specialty Terminal Company (BOSTCO) project on the Houston Ship Channel is on schedule for a startup in the third quarter of 2013 and it is also on budget at $430 million.
“Kinder Morgan will look to develop any additional unused space at the facility for additional black oil and/or distillates,” a company spokesman told OPIS.
Industry sources noted that Kinder Morgan, like other terminal owners, will consider storage expansion or tank conversion to accommodate the surging distillates exports out of the U.S. Gulf Coast. The export push could accelerate after Motiva’s 600,000-b/d Port Arthur refinery returns to full capacity in the first quarter of 2013.
KMP now owns 98% of BOSTCO project after purchasing TransMontaigne Partners LP’s 50% interest in January. The remaining 2% will be held by a customer at the BOSTCO facility.
The BOSTCO project began construction Dec. 14, 2011. The first phase of the project currently includes construction of 52 storage tanks that will have a capacity of 6.6 million barrels for handling residual fuel, feedstocks, distillates and other black oils. Terminal service agreements and/or letters of intent have been executed with customers for almost all of the capacity.
BOSTCO is expected to be accretive to cash distributable to KMP unitholders when the first phase of the project comes online in the third quarter of 2013. The first phase of the project is expected to be completed by the first quarter of 2014.
